Be smarter and faster with PRO Alerts on LNCO
From other sites
at CNBC.com (Oct 17, 2014)
at CNBC.com (Jul 15, 2014)
at MarketWatch.com (Apr 22, 2014)
at CNBC.com (Mar 24, 2014)
at MarketWatch.com (Nov 4, 2013)
at MarketWatch.com (Nov 4, 2013)
at MarketWatch.com (Jul 2, 2013)
at CNBC.com (Nov 19, 2012)
at CNBC.com (Oct 16, 2012)
at CNBC.com (Oct 12, 2012)
Linn Energy: Strong Buy On This Ridiculous And Short-Sighted Sell-Off
- Linn Energy's shares are down substantially over the last couple of weeks.
- Lower oil prices took a toll on Linn Energy's valuation, but they are almost sure to rebound.
- At $23, Linn Energy is an excellent contrarian purchase as Mr. Market quotes irrational prices.
- Linn Energy offers investors both capital appreciation potential AND a 13% dividend yield.
13.1% Distribution Linn Energy Had A Good Q3, But It May Be In Trouble If Oil Prices Don't Rise. Sell?
- LINE has had distribution coverages greater than 1.0x for the last two quarters.
- LINE guidance indicates that the distribution coverage will sink significantly under 1.0x for Q4 2014.
- Current low oil prices, about 65% oil hedging in 2015, a $75/barrel WTI forecast by Goldman Sachs for FY2015, etc. spell trouble ahead for LINE.
Update: Linn Energy's Earnings Show The Partnership Is Benefiting From The Change In Strategy
- The partnership announced its third quarter earnings.
- As we expected, the addition of mature assets have resulted in immediate increase in production, revenues, and cash flows.
- Linn Energy will continue to add more mature assets, which will allow the partnership to have stable revenues and cash flows in the medium-long term.
Linn Energy: Weak Guidance Overshadows Strong Q3 Results
- Linn Energy reports its Q3 2014 results.
- However, guidance for Q4 was quite weak.
- At current prices, Linn Energy yields nearly 12%.
11.4% Distribution Linn Energy Completed Its Needed 1031 Exchange Trades To Match The Devon Buy
- LINE announced the purchase of about 896,000 net acres of Devon Energy properties at the end of Q2 2014.
- On October 3, 2014 LINE announced two sales that together will form the "tax free" 1031 exchange for the Devon Energy purchase.
- LINE appears to have come out far ahead on this assets swap. The article reviews the details of the gains.
- LINE has lost revenues due to the recent oil price declines; but its savings on CapEx due to its recent "trades" should allow CapEx savings to offset oil revenues declines.
LINN Energy: Recent Correction Closes Valuation Gap
- LINN lost over $3 billion in market capitalization since early July.
- The units’ re-pricing largely addressed the wide gap that existed earlier between the enterprise value and the PV-10 of proved reserves.
- While the recent price move is way exaggerated at this point, the correction highlights the units' vulnerability due to high debt, high G&A and dispersed, high-cost asset base.
Linn Energy: Portfolio Upgrades Bring A Distribution Increase Closer To Reality
- Linn Energy once vowed to increase its distribution to $3.08 per unit, but that never materialized.
- This year, Linn has made a series of purchases and divestments to upgrade its portfolio and acquire more mature assets with shallow decline rates.
- These moves will greatly improve near-term distributable cash flow, and along with a more advantageous cost structure, should allow for a distribution increase next year.
Why Not Go Against The Grain And Purchase This Promising 10% Yielder In The Midst Of A Sell-Off?
- Linn Energy just announced the sale of its Granite Wash and Cleveland properties.
- The deal is set to finance Linn Energy's acquisition of Devon Energy's non-core oil and gas assets announced earlier this year.
- Market sell-off and weakness of high-yield income investments have pushed Linn Energy below $29.
- Long-term income investors now have the chance to purchase a quickly transforming energy player at a 10%+ yield.
- Linn Energy agrees to sell its Granite Wash assets for $1.95 billion.
- The company also sold a portion of its Permian Basin assets for $350 million.
- These funds will be used to fund the $2.30 billion acquisition of assets from Devon Energy.
- As a result of these transactions, Linn Energy should see a large boost to its DCF per unit.
Update: Linn Energy Sells Its Granite Wash And Permian Basin Assets
- Linn Energy and LinnCo have officially exited the Granite Wash and Cleveland shale plays, raising $1.95 billion in the process.
- Linn also sold more of its Permian Basin assets for $350 million.
- The cash from these two sales will allow Linn to fund its $2.3 billion purchase from Devon without having to issue out more debt.
- Now that Linn has almost completed its divestiture program, it can focus on its crude weighted California assets to reward unitholders and shareholders.
- Linn will reduce its company-wide production decline rate and will be able to reduce its annual capex budget.
- Linn Energy is swapping part of its Permian acreage for one of Exxon's California assets.
- The deal is very bullish for Linn, as the new production it acquired is 100% weighted towards crude.
- This deal is credit positive for Linn, and will help boost its distributable cash flow and allow it to shore up its coverage ratio.
Linn Energy: A Resilient, High-Yield Income Investment With Potential To Surprise Investors
- Linn Energy is a robust investment in the energy and exploration sector.
- An anticipated end to the Fed's bond buying program, which put pressure on income investments in the last week, is a good thing for stocks in the long-run.
- Plentiful events this week could lead to short-term volatility and offer investors the chance to pick up a quality energy investment for growth and income.
- Linn Energy's assets portfolio has become stronger due to the recent deals with other energy giants.
- These acquisitions have resulted in reducing undeveloped capital intensive assets from the partnership's balance sheet and increasing mature low-decline rate assets.
- The reshuffling in the assets mix will result in a substantial decline in the capital expenditure run rate.
- Focusing on mature assets will allow the partnership to have stable cash flows, which will result in stable cash distributions.
LinnCo: 10% Yield And Solid Growth Rate Hard To Resist
- After holding Linn Energy off and on over the past year and a half, I bought my first shares in LinnCo recently.
- This entity has a nice earnings trajectory and also pays an almost 10% distribution yield paid monthly.
- Why I think these shares provide a solid income opportunity with attractive valuations in what I consider a slightly overvalued market.
- Linn's upgraded 2014 guidance makes the company a significantly better income investment.
- Company is swapping out high decline acreage for lower-decline acreage.
- Linn deserves to be taken out of the penalty box.
What Investors Should Make Of Linn Energy's Recent Portfolio Reshuffling
- Linn is betting big on the Hugoton Basin.
- It's made significant acquisitions of some highly promising long-lived, low-decline assets.
- Distributable cash flow should improve going forward, to better protect its huge distribution yield.
Linn Energy And The Value Of 'Under Promise, Over Deliver'
- Production results in some areas were above expectations.
- Guidance for certain key metrics has been revised upward.
- The Berry acquisition is proving to be very beneficial.
Linn Energy And LinnCo Are Buys Now More Than Ever Before
- Linn Energy and LinnCo are strong buys after their recent earnings release.
- The great thing that happened with LINN's distribution coverage ratio makes the buy thesis much stronger.
- Both entities yield north of 9%, making them ideal income plays.
- The Hugoton Basin offers upside through lower costs..
- California is still in growth mode, offering crude weighted production upside.
- Linn reported a quarter that was better than expected but did not address longer term problems.
- Organic growth was only 2.4% while cap-ex accounts for 40% of revenue, and weak growth could lead to dilution.
- Linn also announced both a secondary and share buyback program, which is an odd financial strategy.
Mon, Oct. 13, 2:57 PM
- Linn Energy (LINE, LNCO) is the largest oil and gas producer structured to resemble an MLP, but it is vulnerable because of considerable exposure to commodity price risks, unlike the vast majority of other MLPs, Goldman Sachs says.
- Most energy MLPs have a fee-based business as well as hedged positions when there is commodity exposure, ensuring that such companies will be insulated against commodity price declines, but Linn is not one of those companies, according to Goldman's analysis.
- The deteriorating pricing environment continues to hit oil and gas producers hard; last week, Linn was among the companies with the biggest drops - more than 11%.
- LINE -6.3%, LNCO -6.5%.
Tue, Oct. 7, 11:58 AM
- More analyst praise comes in for Linn Energy's (LINE, LNCO) recent asset sale, as RBC Capital says Linn has successfully exited the majority of its high decline, unconventional assets - including its entire Granite Wash and Cleveland positions, its Wolfberry assets and a majority of its Permian properties - which have dragged on portfolio efficiency.
- RBC says the final step in the asset rationalization strategy will be the sale of the remaining Midland Basin assets, which the firm believes ultimately will fetch up to another $750M in proceeds.
- RBC sees the moves ultimately reducing Linn’s overall portfolio decline rate to a far more manageable 15% on a pro forma basis; also, estimated $300M-$400M in capex reductions for 2015 further enhances Linn’s distributable cash flow generation potential.
- Earlier: Linn Energy asset sale praised, despite lower EBITDA outlook.
Mon, Oct. 6, 3:23 PM
- Analysts are touting Linn Energy’s (LINE, LNCO) recent $2.3B asset sale as an example of the company doing what it said it would do in achieving its objectives of lowering its overall production decline rate, reducing its capital intensity, and divesting assets that don’t complement its portfolio of mature assets.
- Though forecasting the net effect of the transactions as lowering EBITDA, Raymond James believes the reductions in maintenance capital spending will result in immediate distributable cash flow accretion of ~$0.06/unit, resulting in a 2015 distribution coverage ratio of 1.17x.
- Credit Suisse expects additional moves to come as LINN looks to fully exit its Permian Midland basin position, which should facilitate further M&A.
Fri, Oct. 3, 9:00 AM
- Linn Energy (LINE, LNCO) has struck deals to sell oil production assets in the Texas panhandle and western Oklahoma for $2.3B to repay debt it took on to finance its acquisition of Devon Energy assets in August.
- Linn will sell all its Granite Wash and Cleveland properties to affiliates of investment group EnerVest (OTC:EOSOF) for $1.95B, and is selling related midstream facilities.
- Additionally, the company will sell about 7,200 net acres in the Wolfberry field in Texas's Permian Basin to Fleur de Lis Energy for $350M.
- Linn expects to close the transactions in Q4, after which it would be left with 6,600 net acres producing 8M bpd in the Midland Basin.
- Previously: Linn Energy said to tap banks for $2B oil asset sale
- LINE +1.4%; LNCO +0.5% premarket
Fri, Sep. 19, 3:40 PM
- Linn Energy (LINE, LNCO) and ExxonMobil agreed to swap assets, with XOM receiving land in the west Texas Permian Basin and Linn getting land in California, which Credit Suisse views as an "incremental positive step" toward eventually resuming distribution growth.
- While the deal was only a portion of the remaining Permian assets Line has been looking to trade or sell, it will be accretive in 2015 and will provide Linn with underdeveloped assets to develop over time in a capital-efficient manner, Credit Suisse says as it continues to watch for further steps that can strengthen the balance sheet and cash position to take distributions higher.
Thu, Sep. 18, 5:23 PM
- Linn Energy (NASDAQ:LINE) and LinnCo (NASDAQ:LNCO) agree to swap a portion of their Permian Basin properties to Exxon Mobil (NYSE:XOM) for operating interests in California's South Belridge Field.
- Linn will receive XOM's interest in its Hill Property located in the South Belridge Field, which it believes offers significant upside potential through optimization projects, increased steam injection and extensive down spacing from more than 300 future drilling locations; current production totals ~3.4K boe/day but Linn estimates total resource potential of ~67M boe.
- In exchange, XOM will receive ~17K net acres in the Midland Basin core area in west Texas that is most prospective for horizontal Wolfcamp and Spraberry development, and now produces ~4.7K boe/day, plus 800 acres in the New Mexico Delaware Basin.
- The deal is the second such asset swap this year by the companies (earlier).
- LINE +1.4% AH.
Mon, Sep. 8, 12:49 PM
- Linn Energy (LINE -0.5%) and LinnCo (LNCO -1.8%) are reinstated with Outperform ratings at Credit Suisse, which sees a 20%-plus total return outlook over the next 12 months and eventual distribution growth.
- CS believes LINN is taking the right steps toward resuming distribution growth, and moving past the challenges of last yea; while the firm does not see LINN in a position to take distributions up in this year or the next, but does forecast distribution growth by early 2016.
- Further accretive M&A dependent on upcoming Granite Wash and Permian sales could speed the timetable, the firm says.
Thu, Sep. 4, 3:23 PM
- Linn Energy (LINE -1.5%) and LinnCo (LNCO -1.2%) are poised for a great 2015, Howard Weil analyst Brian Corales believes, with Linn on track to be very close to achieve its ultimate goal of total cash inflow equaling total cash outflow, which would answer questions posed by many of its questions.
- Weil foresees a $1.2B capital budget in 2015 and, combined with distributions, would be outspending its cash inflows by only ~$300M next year and even better in 2016; the firm thinks maintenance capex questions would go away if the total corporate cash flow is essentially in line with capex plus distributions.
- The firm maintains its Outperform ratings and $37 price targets for both LINE and LNCO.
Fri, Aug. 15, 6:25 PM
- Linn Energy (LINE, LNCO) reportedly has hired banks to sell oil production assets in the Texas panhandle and western Oklahoma in an auction that could raise as much as $2B.
- Linn said in June it would sell the Granite Wash assets to pay back debt it took on to finance its $2.3B acquisition of oil and gas assets from Devon Energy.
- Sources say other oil and gas companies likely will dominate the sale process, but P-E firms also have shown interest.
Fri, Aug. 8, 3:42 PM
- Raymond James analysts clearly prefer LinnCo (LNCO +2.9%) over Linn Energy (LINE +0.5%), noting LNCO is trading at a ~$1.60 discount to LINE while also yielding ~50 bps more than LINE.
- The firm says it is not clear what's keeping LNCO's valuation suppressed, other than it is taking an extended period of time to place the incremental ~95M shares issued in the Berry acquisition into a more stable investor base.
- LNCO reported solid Q2 results, with production and cash flow coming in above guidance; the firm believes it should ultimately trade at a ~7% premium over LINE, given its improving distribution coverage and potential to unlock further value from its Permian Basin acreage.
Tue, Jul. 1, 2:52 PM
- Linn Energy’s (LINE +0.8%) $2.3B asset purchase from Devon Energy (DVN -0.1%) earns the praise of Raymond James analysts, who note that LINE plans to sell its high-decline Granite Wash assets to fund the deal, meaning the company is not likely to need to tap debt or equity markets for related funding.
- The firm estimates LINN may need to reserve only 20% of EBITDA to maintain the cash flow from the new assets vs. ~40% of EBITDA likely need to maintain the Granite Wash; through this transaction and the Permian divestiture program, LINN could reduce its overall capital budget by ~$400M.
- LNCO -0.3%.
Mon, Jun. 30, 12:17 PM
- Devon Energy (DVN +0.2%) received a better than expected price in its $2.3B deal to sell non-essential U.S. assets to Linn Energy (LINE +1.6%), Wells Fargo analyst David Tameron says.
- DVN brought in well above the high end of expectations, which the firm presumes was $1.2B-$1.4B; the divestment helps further delever DVN’s balance sheet, and management expects to reduce net debt by ~$4B by year-end.
- LNCO +2.6%.
Mon, Jun. 30, 9:12 AM
- Linn Energy (LINE, LNCO) agrees to acquire U.S. oil and gas properties from Devon Energy (DVN) for $2.3B.
- The assets currently produce ~275M cfe/day (~80% gas), with total proved reserves of 1.3T-1.5T cfe and total resource potential of ~3T cfe.
- The asset package is comprised of ~900K net acres across the Rockies, Mid-Continent, east Texas, north Louisiana and south Texas regions with ~4,500 total wells; LINN says it has identified 1K-plus future drilling locations and ~600 recompletion opportunities.
- LINN says the acquisition will be financed ultimately through the sale of its Granite Wash assets and other non-producing acreage in its portfolio.
- DVN says the deal covers remaining U.S. assets it had targeted for divestiture, and that the sale of Canadian and U.S. non-core properties over the past few months has generated $5B-plus in proceeds at an accretive multiple of nearly 7x 2013 EBITDA.
- LINE +0.3%, DVN +0.4% premarket.
Mon, Jun. 2, 11:47 AM
- J.P. Morgan believes a potential asset sale or swap of Linn Energy's (LINE -0.2%) Midland Basin assets could add as much as $9/unit to the current price.
- JPM says an outright asset sale plus a 1031 like-kind exchange would yield a $31-$35/unit valuation, and would benefit distributable cash flow from a potential ~$70M uplift due to the lower capital intensity of the developed Hugoton assets relative to the undeveloped Permian assets.
- An asset swap would yield a $34-$38/unit valuation, the firm says, noting its analysis shows this approach to be the more lucrative of the two scenarios initially, but Linn may be giving up long-lived reserves for current production and lower capital intensity.
- LNCO -0.4%.
Tue, May. 27, 2:58 PM
- Oppenheimer reiterates its Underperform rating and $26 price target on Linn Energy (LINE +0.3%) after company's announced asset swap with Exxon Mobil (Briefing.com).
- The low decline, mature assets acquired by Linn will likely slightly lower the overall decline rate and capital intensity, but the anticipated accretion is only about half of what had been expected, Oppenheimer says; as a result, it is lowering its earnings estimates.
- In addition, the deal does little to reduce elevated leverage, which the firm forecasts at 4.5x in 2015; it also continue to believes maintenance capital spending is significantly understated.
- LNCO +0.8%.
Thu, May. 22, 3:52 PM
- Opinions are mixed on Linn Energy's (LINE +0.4%; LNCO +0.4%) acreage swap with a unit of Exxon Mobil (XOM -0.5%) that adds production of ~85M cfe/day for Linn.
- Raymond James analysts call it "quantitatively, an ideal swap," since Linn is essentially trading production that is declining at ~35%/year for gas properties that are declining at 6%, resulting in much more stable cash flow; also, the deal allows Linn to lever its already large Hugoton position to help deliver more operating synergies.
- Citigroup’s Faisel Khan is not so sure Linn got the better of the deal: Linn estimates net accretion to distributable cash flows of $0.09-$0.12 per unit on an annualized basis, but Linn is giving up upside from the Midland basin assets resulting from additional capital spending later this year.
LNCO vs. ETF Alternatives
Other News & PR