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Bryce_in_TX

Bryce_in_TX
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  • Galena Biopharma Presents GALE-401 (Anagrelide Controlled Release) Clinical Trial Data at the 56th American Society of Hematology (ASH) Annual Meeting & Exposition [View article]
    Enrollment in the Neuvax Phase III trial was supposed to be completed this year. Wonder what the status of that trial is?
    Dec 8, 2014. 07:57 AM | Likes Like |Link to Comment
  • Sell Linn Energy, The Distribution Is Unsustainable [View article]
    "Taking into account raising production, I believe that the amount of unhedged production can not substantially affect cash flows."

    My back of the envelope calculation shows LINE is getting about 60% of its revenue from oil and 40% from natural gas and NGLs, counting the effect of hedges. (See page 41 of 3rd Qtr 10-Q)

    Based on a hedged price per Mcf of natural gas of $5.12, a hedged price per barrel of oil of $94.48 and a price per barrel of NGL at $38, I get a total for revenue of $4.138 billion, based on the daily production on page 41 of the 3rd Qtr 10-Q. If 35% of the oil is sold at a price of $70, instead of $94.48 (see 3rd Qtr Supplemental Financial and Operational Results, page 2 in link. LINE shows 74,000 barrels of production on page 41 of 3rd
    qtr 10-K and about 46,000 barrels a day hedged for 2015 according to the supplemental info. That equates to 38% of production being unhedged.), I get a total for revenue of $3.906 billion, or a $232 million reduction in cash flow. That is a 5.6% reduction in cash flow.

    That isn't what I could call very significant. But then are expenses going to be equal, greater or less in 2015? Can LINE make sufficient adjustments to make up the difference? About a 25% cut in the distribution would make up the shortfall, but I would hope there would be other means to make adjustments besides cutting the distribution.

    http://bit.ly/1I2KI3B

    If the asset sales go through in 4th quarter, debt will be reduced by about $2 billion from what I see in the 3rd Qtr 10-Q. $1.3 billion of asset sales will be used to pay the VIE term loan and some of the proceeds going to pay some on the credit facility.

    But if the price of oil stays at current levels, will that reduce the borrowing base and will banks or creditors be greedy and want distributions to be cut or suspended in order to pay down or pay off debt?

    A lot of moving parts.
    Dec 4, 2014. 02:35 AM | 1 Like Like |Link to Comment
  • Linn Energy: Is The Market Pricing In A Distribution Cut? [View article]
    I agree. Sorry if I misunderstood.
    Dec 2, 2014. 11:53 PM | 4 Likes Like |Link to Comment
  • Will Linn Energy Post A Windfall Profit For Q4? [View article]
    I would add another $3 to $4 to the price of oil difference, but you make a good argument if the capex savings materialize. I think the unit price decline is overdone at this point, and maybe wayyyy over done. Unless debt covenant restrictions cause them to stop distributions all together for a period of time. Creditors come before unit holders in the food chain.
    Dec 2, 2014. 11:51 PM | Likes Like |Link to Comment
  • Linn Energy: Is The Market Pricing In A Distribution Cut? [View article]
    I also wonder if LINE will actually cut the distribution. Wouldn't surprise me if they did or didn't. 1st qtr 2015 CC is going to be very interesting.
    Dec 2, 2014. 07:57 PM | 3 Likes Like |Link to Comment
  • Linn Energy: Is The Market Pricing In A Distribution Cut? [View article]
    Good article. However, my hope is LINE doesn't have to cut the distribution.

    One thing that struck me as a bit odd:
    "While painful, that squeeze was actually a very profitable period for Linn Energy as the value of its hedges increased dramatically."

    I would question that statement. Only one side of the hedging transaction hit the income statement when the value of the derivatives increased due to a lower FMV on oil and oil reserves. The increase in the FMV of the derivatives hit the income statement, but the decrease in FMV of the oil reserves on the balance sheet remained at historical cost.

    The derivatives offset any increase or decrease in value of the oil reserves, so what happened in reality is there was basically no material gain or loss from the increase in the FMV of the derivatives. GAAP distorts economic reality in this instance. The decline in value of the oil reserves, not reported, offset the gain in FMV of the derivatives. The derivatives served their function of making up the cash flow lost when the price of oil declined so dramatically. Basically, the derivatives enabled LINE to maintain stable cash flows during a very volatile period.
    Dec 2, 2014. 07:36 PM | 8 Likes Like |Link to Comment
  • Realty Income: Don't Reach For This Yield Play [View article]
    Using Net Income or book equity in those calcs? If so, they are distorted due to GAAP not taking into consideration the property values appreciation. Instead of depreciating, according to GAAP, real estate is usually worth more as time passes.
    Dec 2, 2014. 07:10 PM | Likes Like |Link to Comment
  • Linn Energy: What To Do After Friday's Massacre [View article]
    Just realize that LINE gets twice as much revenue, about, from oil as they do from natural gas and NGL. So not being hedged for 30% of oil production in 2015 and 40% in 2016 is likely material to their cash flow and income for those years.
    Dec 2, 2014. 07:00 PM | 1 Like Like |Link to Comment
  • Linn Energy: Cutting Distributions And Capex May Be A Wise Strategy [View article]
    Dsandman999,

    Note on in the liability section of the 3rd Qtr Balance Sheet the "Current portion of long term debt" of $1.3 billion, on page 1 of the 10-Q. That is a term loan through a VIE (variable interest entity) and it is due within one year. Go to page 14 to get the specifics. It is due Aug 28, 2015, by my calculation (364 days). Page 9 explains they intend to repay the loan with proceeds from certain properties that close in the 4th quarter of this year.
    Dec 2, 2014. 06:48 PM | Likes Like |Link to Comment
  • Sell Linn Energy, The Distribution Is Unsustainable [View article]
    "Sixty-four percent of LNCO production is natural gas and natural gas liquids. Only 34% is oil (and oil component is declining)."

    In dollars, that's about twice as much revenue from oil versus natural gas and NGL. See page 47 of 3rd Qtr 10-Q. 525 million cubic feet of nat gas per day equates to 525 thousand of Mcf per day times average price of $4.56 per Mcf equals $2.394 million per day from nat gas. 73.2 thousand barrels of oil produced per day, times an average price of $93.10 equals $6.815 million per day from oil. Factor in a little over another million a day for NGL. Even though the percentage of oil is substantially less than the percentage of natural gas and NGL produced daily, in dollars oil still represents about twice the revenue as natural gas and NGL. I doubt the hedges make much difference in that regard.

    http://1.usa.gov/1txRnJd

    The 64% and 34% numbers are deceiving.
    Dec 2, 2014. 12:19 AM | 1 Like Like |Link to Comment
  • Linn Energy: Cutting Distributions And Capex May Be A Wise Strategy [View article]
    Here is what I said, read it for yourself so you don't tell untruths about me. I said I don't see a distribution cut happening:

    "Who said I expect distributions to be cut? I certainly didn't. LIke I say, they are borrowing, issuing equity, or selling assets to keep the cash shell shuffling game going, IMO. That DOES NOT imply a distribution cut, it means more debt, more dilution and more assets sales. I said that the financials, to me, indicate corrective action needs to be taken, such as reducing the distributions. But, I don't see that happening. "

    http://bit.ly/1vDfudS

    Are we clear now on what I said, Fear and Greed Trader?

    You throw out insults. Is that the best you can do?
    Dec 1, 2014. 08:23 PM | 1 Like Like |Link to Comment
  • Linn Energy: Cutting Distributions And Capex May Be A Wise Strategy [View article]
    I asked you to back up what you said. Where is it?
    Dec 1, 2014. 08:09 PM | Likes Like |Link to Comment
  • Linn Energy: Cutting Distributions And Capex May Be A Wise Strategy [View article]
    "whilel u and the other fear mongers predicted they would HAVE to CUT when their hedging strategy was in question --
    they haven't cut as u predicted then"

    Please provide the proof I predicted a distribution cut. I am telling you that I NEVER predicted a cut.

    And I never called you a villain. Just holding you accountable for what YOU predicted.
    Dec 1, 2014. 08:03 PM | 2 Likes Like |Link to Comment
  • Linn Energy: Cutting Distributions And Capex May Be A Wise Strategy [View article]
    SA is being difficult today. I tried editing my post but it wouldn't let me.

    I meant to say: I specifically recall you predicting a distribution increase in 2014. There was no qualification as to "if market conditions permit" that I recall. Correct me if I'm wrong.
    Dec 1, 2014. 07:49 PM | Likes Like |Link to Comment
  • Linn Energy: Cutting Distributions And Capex May Be A Wise Strategy [View article]
    Oil at 90 to 100 would have kept it right where it is at, not an increase, IMO. Their cash flows have not been impacted to date, so the decline in oil prices has not yet adversely impacted them.

    I specifically recall you predicting a distribution increase in 2014.

    Rawenergy has stated that including derivatives in the DCF calculation is not a current practice. That is what I was arguing, that it should be included in the DCF calculation. I don't recall forecasting a dividend cut or anything about the hedges. I did say that LINE counts the revenues in their DCF calc, but not the costs. That is fact. I still believe, especially given the current price environment, a better and more conservative approach at calculating DCF would be to deduct the cost of derivatives in calculating DCF, recognizing that is not current practice. LINE is still a risky investment, IMO, and now even more so.
    Dec 1, 2014. 07:45 PM | Likes Like |Link to Comment
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