Thu, Jul. 30, 6:45 AM
Tue, Jul. 21, 10:47 AM
- LinnCo (LNCO +4.1%) is downgraded to Outperform from Strong Buy with a $9 price target, down from $15, by Raymond James analyst Keven Smith, a longtime supporter of LNCO and Linn Energy (LINE +4.4%).
- Smith's positive view on LNCO has been based on Linn’s strong hedging book, low decline asset base, and unique ability to acquire E&P C-corps which mitigated the weakness of the oil markets; given the YTD lack of acquisitions and the higher equity cost of capital due to a lower stock price, he is dialing back acquisition expectations for the partnership and his forecast for Linn’s sustainable distribution rate.
- Smith also drops his price target on LINE to $8 from $14 while maintaining his outperform rating, predicting LINE will need to lower its distribution in 2016 if oil remains below $60.
- Smith also downgrades Atlas Resource Partners (ARP +1%) to Underperform, saying ARP could hit its leverage covenant of 5.25x its trailing 12-month total debt/EBITDA ratio; he expects ARP and Memorial Production Partners (MEMP +1.4%) to cut their distribution rates.
Mon, Jul. 13, 3:14 PM
- Linn Energy (LINE, LNCO) is sharply lower, and the apparent reason is a negative comment from Jim Cramer, who said of the company during the lightning round of his CNBC show, “I think the company's future is hampered, and I’m not going to recommend the stock.”
- "These are small stocks and comments like his can have an impact,” says an MLP ETF portfolio manager; Cramer's comments did not seem to scare investors in Procter & Gamble or DuPont, other stocks criticized on the show.
- Last week, Linn announced new partnerships to develop properties as well as a deal to sell some assets, but analysts remain concerned about debt.
- LINE -6.4%, LNCO -7.7%.
Tue, Jul. 7, 2:59 PM
- Linn Energy's (LINE -0.8%) new partnerships to develop properties and a deal to sell some assets generally were well received by analysts, but its shares and those of sister company LinnCo (LNCO -0.7%) are lower.
- While UBS sees some improvements, the firm still rates both companies at Sell and expects Linn will need to cut its distribution in Q4, with the likelihood of increasingly unfavorable impacts to debt facilities during the fall redetermination over vs. this spring if commodity prices remain weak.
- UBS raises its earnings estimates for LINE based on the asset sale, which will help pay down debt and reduce interest costs, but it cuts its price target for LINCO to $8 from $9 due to reduced distributions.
Mon, Jul. 6, 5:45 PM
- Financial Times appreciates the creativity Linn Energy (LINE, LNCO) is showing in trying to maintain its payout to investors, potentially finding a way to keep growing so the company can support and expand its dividend at a time when preserving cash is paramount.
- In January, Linn cut its dividend by more than 50% but also announced a financing joint venture with a P-E firm which would fund $500M in drilling costs in exchange for getting a preferred return, and in March, it unveiled a $1B vehicle with another firm to fund acquisitions of oil and gas acreage; today, Linn finally closed those deals, allaying concerns that they may not get completed.
- Cash flow did not cover Linn's dividend in Q1, and fears of a repeat have persisted, but if the MLP has found a way to withstand the oil rout, look for its yield to normalize, not because its dividend will be cut, but because its share price will rise, FT writes.
Mon, Jul. 6, 8:57 AM
- Linn Energy (LINE, LNCO) agrees to sell its remaining position in the Permian Basin's Wolfcamp Shale to an undisclosed buyer for $281M.
- The properties sold under the deal include ~6,400 net acres prospective for horizontal Wolfcamp drilling and ~2K boe/day of current production from 133 gross wells.
- LINE -0.9%, LNCO -1.9% premarket.
- Earlier: Linn Energy inks $1.5B in funding agreements
Mon, Jul. 6, 8:19 AM
- Linn Energy (LINE, LNCO) says private capital investor Quantum Energy Partners agrees to initially commit up to $1B to fund selected future oil and natural gas acquisitions and the development of acquired assets.
- According to the terms, Linn will have the ability to participate in all acquisition opportunities with a direct working interest ranging from 15% to 50%.
- Also, Blackstone's (NYSE:BX) GSO Capital Partners agrees to commit up to $500M to fund drilling programs on locations provided by Linn.
- According to these terms, GSO will fund 100% of the costs associated with the new wells drilled and will receive an 85% working interest until it achieves a 15% IRR on annual groupings of wells.
Wed, Jul. 1, 4:50 PM
Wed, Jul. 1, 11:22 AM
- Concerns about Linn Energy’s (LINE -0.9%) leverage and ability to pay its distribution are overdone, Raymond James analysts says as they reiterate an Outperform rating and $14 price target on LINE and a Strong Buy recommendation and $15 target for LinnCo (LNCO -1.9%).
- James believes the market continues to underestimate Linn’s base cash flow business, along with the impact of its multi-year hedge book and its acquisition opportunities.
- The firm cites several positive catalysts on the horizon, including the anticipated finalizing of both its acquisition alliance with Quantum Energy and drilling alliance with GSO Capital, the potential monetization of its remaining 6,600 net acres in the Permian, and well results from its Terryville field acreage in Louisiana.
Mon, Jun. 1, 4:56 PM
Tue, May 19, 9:15 AM
Mon, May 18, 7:45 PM
- Goldman Sachs had a lot to say about all corners of the energy sector today in addition to the cut in its long-term oil price forecast, its Sell recommendations for oil majors BP, Statoil (NYSE:STO) and Chevron (NYSE:CVX), and its gloomy outlook for offshore drillers Transocean (NYSE:RIG), Diamond Offshore (NYSE:DO) and Atwood Oceanics (NYSE:ATW).
- Goldman awards a Buy rating for Exxon Mobil (NYSE:XOM), "the only U.S. or European major that can generate sufficient free cash flow to cover its dividend near $60/bbl in 2016-17"; while the firm says other oil majors will be struggling to keep the dividend flat, XOM will be in a position to increase the dividend for the next several years.
- With its expectation for long-term weakness in oil and gas prices, Goldman sees risk exposure in many names that are reliant on commodity prices, suggesting selling LINE, DPM, NGLS, while predicting PAGP and NS would benefit from a removal of the U.S. crude oil export ban.
- The firm thinks many midstream MLP names now offer attractive valuations, recommending ENB, EPD, ETE, PAA, SXL, WNRL.
- Goldman sees an upturn for frac sand provider Emerge Energy (NYSE:EMES), upgrading shares to Buy from Neutral.
- Other Buys: CLR, NFX, CQP, HEP.
- Other Sells: TRP, TCP, GPOR, MUR, GTE
Mon, May 18, 5:37 PM
Mon, May 18, 4:52 PM
- Linn Energy (NASDAQ:LINE) -5.3% AH after announcing a public offering of 16M common units, with an underwriters option to purchase up to an additional 2.4M units.
- LINE says it plans to use the proceeds to repay debt under its credit facility, whose debt was incurred primarily to fund the open market repurchases of LINE and Berry's senior notes.
- LNCO -3.1% AH.
Fri, May 1, 5:07 PM
Wed, Apr. 29, 2:28 PM
- Linn Energy (LINE +1.2%) is higher despite reporting a larger than expected Q1 loss, but it increased its Q1 production by 9% Y/Y, or 97M cfe/day, even after chopping nearly $1B from its 2015 planned spending earlier this year.
- LINE says it has been able to produce more with a smaller budget thanks in part to shedding assets last year in the Granite Wash in north Texas and Oklahoma, and most of its property in the Midland Basin in west Texas.
- LINE says it also generated substantial savings through a “comprehensive cost reduction initiative,” which appears to include job cuts; LINE did not provide info about layoffs in its Q1 release, but it recently said it planned to shut its Denver office and eliminate 55 jobs there.
- After paying for development costs and distributing cash to its investors, LINE says it posted a $37M shortfall in its net cash in the quarter; LINE recently cut its monthly distribution to $0.10/unit from $0.24 in December.
- However, LINE appears to be one of the only upstream MLP companies that will be able to pay for new projects and distribute cash to its investors using its own cash flow in 2015, Raymond James says.
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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