Fri, Jan. 2, 10:16 AM
- Linn Energy (LINE +8.9%) has turned sharply higher despite its earlier announcement that it cut its oil and natural gas budget by 53% to $730M for the new year and that Linn and sister company LinnCo (LNCO +5.9%) also slashed their annual dividends to $1.25/share from $2.90.
- LINE/LNCO initially plunged on the news during premarket trading, but apparently the capex and dividend cuts had been priced in, and now the shorts are getting squeezed.
Fri, Jan. 2, 9:14 AM
Fri, Jan. 2, 7:19 AM
- The board approves a 2015 budget with oil and gas capital expenditures of $730M - down 53% from $1.55B in 2014 - and a 56.9% cut in the annual distribution of both LINE and LNCO.
- In other news: Linn signs a letter of intent with a Blackstone's GSO Capital Partners for $500M in funding for oil and gas development.
- A conference call is set for 11 ET
- Source: Press release
- Previously: Linn Co declares $0.10 dividend (Jan. 2)
- Previously: Linn Energy declares $0.10 dividend (Jan. 2)
- LINE -6.2%, LNCO -11.8% premarket
Fri, Jan. 2, 7:03 AM
Dec. 22, 2014, 10:45 AM
- Natural gas prices fall 9.5% to near two-year lows at $3.133/mmBtu, in the biggest one-day percentage loss since February and the lowest intraday price since January 2013, on mild weather forecasts and inventory that is above year-ago levels.
- Prices are now down more than 15% in three straight losing sessions and are 30% lower than the six-month high closing price of $4.489/mmBtu it hit just a month ago.
- Weather has been unseasonably warm for December, limiting demand for home heating and allowing relatively low stockpiles to catch up to where they were a year ago and encouraging traders to sell based on the belief that supply is relatively healthy.
- Gas producers are among the biggest early decliners: XOM -1.1%, CHK -7.3%, APC -2.6%, SWN -6%, DVN -2.2%, COP -2.3%, BP -1.5%, COG -4%, BHP -1.9%, CVX -1.3%, ECA -5.1%, EQT -4.3%, RDS.A -1.7%, UPL -12%, WPX -6.9%, EOG -1%, OXY -1.1%, RRC -6.1%, APA -2.3%, AR -3.2%, CNX -3%, QEP -4.8%, LINE -4.9%, NBL -1.6%, SM -2.6%, XEC -4.2%, PXD -2.9%, NFX -5.1%.
- ETFs: UNG, DGAZ, UGAZ, BOIL, GAZ, FCG, GASL, KOLD, UNL, NAGS, DCNG
Dec. 18, 2014, 9:14 AM| 9 Comments
Dec. 16, 2014, 12:58 PM
- Linn Energy (LINE +22.1%) will delay its 2015 budget and use proceeds from assets sold in Texas and Oklahoma to cut debt 16%, VP of investor relations Clay Jeansonne tells Bloomberg, following other energy firms in putting spending on hold and reducing debt amid investor concern about payouts.
- LINE said yesterday that it closed the sale of its holdings in the Granite Wash and Cleveland plays in Texas and Oklahoma for $1.95B, and Jeansonne says expectations that the sale wouldn’t go through had helped push down the stock.
- Shares are turning around spectacularly from earlier losses as oil prices rebound.
- Earlier (I, II): Linn Energy, LinnCo (LNCO +15.2%)slashed by Baird
Dec. 16, 2014, 12:47 PM
Dec. 16, 2014, 8:29 AM
Dec. 15, 2014, 12:52 PM
Dec. 10, 2014, 11:49 AM
- Stifel maintains its Buy ratings for Linn Energy (LINE -6.2%)and LinnCo (LNCO -9.9%) but cuts its target prices for both to $22 (from $27 for LINE and $33 for LNCO), as the companies trade sharply lower amid today's oil price skid.
- On LINE, Stifel believes distribution coverage will be challenged should the current commodity environment persist during FY 2015, but that management is committed to maintain the distribution; investors should benefit from LINE’s moves to lower the corporate decline rate which lowers the maintenance capex needs.
- With ~$2.5B in liquidity, the firm thinks LINE could pursue $1B in acquisitions without being forced to access the capital markets.
Dec. 5, 2014, 10:38 AM
- Indebted U.S. shale companies are facing financial pressure from falling oil prices, raising fears that liquidity could dry up for companies with the greatest debt burdens, but Fitch thinks they may find their lenders are inclined to go easy on them.
- The rating agency believes that, as in the previous oil price crash of 2008-09, banks are likely to show forbearance rather than pushing many companies towards restructuring or bankruptcy.
- Fitch identifies Kodiak Oil and Gas (KOG -2.9%), which has already accepted a takeover offer from Whiting Petroleum (WLL -2.6%), as showing the most warning signs.
- Linn Energy (LINE -0.9%), Breitburn Energy (BBEP -2.6%) and Energy XXI (EXXI -2.8%) are among the companies that have less than half of their revolving credit facilities still unused and available, while Clayton Williams (CWEI -3.5%) had hedged less than half its production for next year, according to Fitch.
Dec. 2, 2014, 5:44 PM
- Oil producers with the most debt are the most at risk in a ~$70/bbl oil price environment, since they have more relative cash flow directed toward interest payments rather than drilling, so they’re most likely to see production declines.
- For investors looking to limit risk, MarketWatch's Philip Van Doorn provides a list of U.S. shale oil producers with market values of at least $50M and share prices above $1 with the highest ratios of debt to equity, in order: UPL, MPO, MRD, ISRL, JONE, XCO, PQ, GDP, LINE, HK.
Dec. 1, 2014, 4:15 PM
Dec. 1, 2014, 3:32 PM
- Prices of bonds issued by low-rated energy companies are falling sharply despite today's rebound in oil prices, amid worries that this year’s slump in oil markets will lead to a cash crunch.
- The most actively traded junk bonds at midday were Linn Energy’s (LINE -5.8%) two B-rated notes due 2019, which fell 9% to $0.82 on the dollar, pushing yields up to ~11.5%; Halcon Resources' (HK -1.3%) 2021 bond, which started weakening Friday, has dropped 10% today to $0.69 on the dollar, pushing up the yield to 17%.
- Energy XXI’s (EXXI -15.8%) debt which matures in 2017 fell 5.5% to $0.85 on the dollar and yielding 15.5%; Quicksilver Resources' (KWK +38.3%) bonds due 2016 have rebounded slightly but still trade ~$0.22 on the dollar.
- Should oil prices fall below $65/bbl and stay there for the next three years, J.P. Morgan high-yield energy analyst Tarek Hamid estimates that up to 40% of all energy junk bonds could default over the next several years.
Nov. 5, 2014, 11:59 AM
- Linn Energy (LINE +3%) rebounds after plunging yesterday following its Q3 earnings report; today, Raymond James analyst Kevin Smith reiterates an Outperform rating with a $33 target price, nearly $10 above the current share price.
- The market continues to underestimate LINE’s base cash flow business and the impact of its multiyear hedge book, the firm says, adding that LINE is only a quarter away from achieving its goal of significantly reducing its drilling capital intensity and its production decline rates, resulting in a much more stable distribution.
- Credit Suisse is not as impressed, as it downgrades both LINE and LinnCo to Neutral and dropping its price targets following yesterday’s earnings conference call.
LINE vs. ETF Alternatives
Linn Energy LLC is an independent oil and natural gas company. The Company's properties are located in United States in Rockies, Hugoton Basin, California, East Texas and north Louisiana, Mid-Continent, Permian Basin, Michigan/Illinois and South Texas.
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