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Hard hit Linn Energy LLC (NASDAQ:LINE) today - Oct. 28, 2013 - released what I view as moderately positive quarterly results, but included barely a mention of the company's pending merger with Berry Petroleum Co. (BRY). More on the merger in a moment, but it seems that the troubles faced by Linn Energy over the last 6 months have forced the company to refocus on what it needs to do to profitably produce oil and gas.

Note: LP companies such as Linn Energy have units and pay distributions. The words stock, shares and dividends may be used here with the understanding that the rules of MLP units apply including the tax consequences of investing in MLP units.

Earnings Press Release Notes

Here are a few of the points out of the earnings press release that I found to be of interest.

Oil and gas production of 823 MMcfe per day was up 5% from 782 MMcfe/d for Q3 of 2012, up 5.5% from 780 MMcfe/d for Q2 of 2013 and above previous guidance for the quarter of 820 MMcfe/d. All indicate that the company is getting a handle on production and growing the same.

An announced $525 million of oil and gas production properties in September shows that Linn is back to focusing on the company's business model of accretive acquisitions to offset the natural production decline from currently operating wells.

The start of a slightly more useful allocation of cash from operating activities to show whether or not the dividends actually come from operating results after expenses.

For that last item, Linn Energy shows on what I would call a cash flow report several items to show what the company does with the operating cash that is generated each month. The largest item after distributions is labeled as "Discretionary reductions for a portion of oil and natural gas development costs." In the footnotes this number is further described as:

"an estimated component of total development costs, which are amounts established by the Board of Directors at the end of each year for the following year, allocated across four quarters, that are intended to fully offset declines in production and proved developed producing reserves during the year as compared to the prior year. The portion of oil and natural gas development costs includes estimated drilling and development costs associated with projects to convert a portion of non-producing reserves to producing status."

For the third quarter, the cash from operating activities covered the distributions, allocation to development costs and a few other items with $2.2 million left over. For the first 3 quarters of 2013, this cash flow reconciliation shows a $36.2 million shortfall, compared to a $75.7 million excess for the first 9 months of 2012.

Will the Merger Announcement Come Soon?

The most interesting part of the earnings release concerns what did not happen. For as long as I have been watching Linn Energy, the company has had an earnings related conference call simultaneously with the dropping of the earnings press release. For this earnings report, all the company had to say was:

"Management plans on hosting a conference call at a later date to discuss the company's third quarter 2013 operational and financial results."

To me this statement indicates that the company could desire to be able to announce the approval of the Berry Petroleum merger when the conference call takes place. Any lengthy delay in the call would be viewed as a negative, so I expect that the conference call and merger approval will both be announced very soon.

Final note: Everything discussed here applies to sister company Linn Co LLC (NASDAQ:LNCO). LINE and LNCO are monthly distribution limited partnership companies with current yields of 10.8% and 9.7%, respectively. My previous article on the Linn companies can be found here.

Source: Between The Lines: Will Linn Energy Make Merger Announcement Soon?