lots of talk on the debt. They now have less then 10billion but lets call it 10. Their bonds are trading at 50 to 65% of face so true payoff is 5 - 6.5 billion. Let say they spend another 500mm this qtr to buy back another 1 BB in debt...The longer they can do that the less leverage better terms they will get with any lender. HUGE ROE for buying back the 8.65 of 2020 Don't count this company out...Ellis is a sharp guy...They can get down to 7 - 8 billion deb in 2 - 3 qtrs.
If LNCO were the only energy co. that had fallen from lofty levels I would have to agree with you.
Sadly that is not the case. Every MLP and e&p has been slaughtered. When the price of oil
stabilizes so will this sector. I believe LINE will survive and start a slow move up. Will it reach
it's previous levels, probably not. Remember when something falls eventually it hits bottom.
There are many who believe we have hit the bottom.
It is no longer a dividend play but it is a value stock.
Sentiment: Strong Buy
You know, now I'm thinking that this whole situation was a clever ploy to allow LINE/LNCO to buy back their debt REAL CHEAP ? Suspend the div., destroy the stock price, scare the bond mkt--- BUY BACK as much debt as possible. Keep pumping OIL as the price recovers, and become leaner & meaner. Works for me !
Patience! We have plenty of time before the oil prices matter!
Double down and squeeze a short!
Sentiment: Strong Buy
They saved 500 million from the Divvy and the oil is hedged at around 75 dollars. The Braindead bashers don't understand how much the company spent of acquisitions , infrastructure and growing the business. The company added all those cost to the company . The bashers feel their cost for bringing the oil from the ground is much larger then the true cost. The company has a true cash flow.
I am glad people are understanding the great deal they are getting to retire debt. They are saving more then 35% on the dollar. The company will be in a stronger position and the stock PPS will appreciate from these devastating over sold lows.
Now what: From a practical standpoint suspending the distribution makes a lot of sense because LINN can use the cash to buy back more bonds at a discount. That being said, the company has completely lost the respect of investors and analyst- The PPS has suffered and could rebound hard. The price appreciation alone could be a triple return on money...... Blackstone is no fool.... They know debt , lead in bonds, and KNOW the business. Most stocks don't even pay a dividend. YOU CANT BE serious !!!!! The debt goes much cheap on the open markets and those debt numbers are highly inflated... The markets are taking a lot less for their debt and making it easier to pay. The DIVY (((( IS ))) going a long way to retire some debt. A billion a wack !!!!! DEBT reduction – Cash flow from hedges and No DIVY Blackstone could be the next bond king- Asset allocators and wealth managers are always on the lookout for new asset classes, or beta opportunities, as a way to enhance portfolio risk and return. The ideal beta opportunities are those that offer high return, low risk, and low correlation with other assets in the portfolio. ###b Grew Q2 2015 average daily production ~1.5% compared to Q1 2015 Decreased Q2 2015 lease operating expenses by ~18% compared to Q1 2015 *** Excess of net cash after total oil and natural gas capital development costs of ~$71 million for Q2 2015, exceeding guidance by ~$90 million ### Increased FY 2015 production guidance ~4% and decreased LOE guidance by ~6% @@@ Liquidity- Completed borrowing base redetermination in May Undrawn capacity of ~$1.5 billion (as of June 30, 2015)(1) Estimated Fall 2015 undrawn capacity of ~$1 billion
The snap back will break his neck. This happens every cycle. Many feel it hasn't bottomed and are on the side lines. Most will be left behind. The whole sector has the same problems and the industry cant all go BK. The charts show a 30% jump ion many of my stocks right now. The Company highlighted the following significant accomplishments: security- HEDGE ~90% for the remainder of 2015 and ~70% in 2016 Natural gas hedged ~100% through 2017- Guaranteed-
• Successfully repurchased approximately $599 million of outstanding senior notes in July and $783 million year-to-date, resulting in annualized interest cost savings of approximately $54 million; settling ½ billion every quarter for the divy payments..
• Announced the sale of the remaining Permian Basin Wolfcamp acreage for approximately $281 million;
• Anticipate full-year cost reductions in lease operating expenses of approximately $100 million;
• Anticipate general and administrative expense reductions of approximately $30 million on an annualized basis;
• Estimate combined cost reductions in lease operating expenses, general and administrative expenses, interest expense and capital costs of more than $225 million on an annualized basis;
• Completed the semi-annual borrowing base redetermination in May 2015 with a liquidity position of approximately $1.5 billion as of June 30, 2015; supported- -
Current guidance--- for the full-year 2015 anticipates funding total oil and natural gas capital expenditures, along with distributions paid through September 2015, from internally generated cash flow with an excess of net cash after total oil and natural gas development costs of approximately $200 million; Total proved reserves ~7.3 Tcfe % proved developed ~80% % liquids ~42% Reserve life-index ~17 years Gross productive wells(2) ~28,000
• This is not a BK company Production increased eight percent to an average of approximately 1,219 MMcfe/d for the second quarter 2015,
• CREATIVE Partnership- Finalized the strategic alliance with GSO Capital Partners LP, the credit platform of The Blackstone Group L.P., to fund up to $500 million of oil and
Some smaller players will be squeezed out this year when their borrowing bases are redetermined. We'll start to see sales of distressed assets as companies attempt to pay down their credit lines. Given their guidance, I don't see that happening to Linn this year and they may get to put their joint venture funds to good use.
Linn's hedge book is pretty solid through the end of 2016 and NG is hedged at 100% through 2017. Since NG represents 56% of their production that's significant.
No interest over here in this? There is still a pulse in this company for the foreseeable future. I'm sure there will be a few companies in the NEAR future that won't be so fortunate and it will be interesting to see if Linn puts some of that Blackstone money to work. I also believe oil prices will be well North of $60 by the end of 2017. Either oversupply dries up or OPEC and others will cut or a combination of the two but oil will be well North of where it's at now.
I've been following and investing in and out of this stock for a year now. I'm feeling the pain now but continue to hold - my option is to buy more at "cheap" or get out now and take a big loss. That's a personal decision of course. Not to be Captain Obvious here - but these are my thoughts:
One day you see headlines and comments about LNCO going under - while the next day you see headlines about hedge funds investing in it.
Here's the bottom line - yes we are way down overall from 52 weeks ago.....a large part attributed to the price of oil - the other around fear about debt and insolvency and the div cut. If you watch the daily trend - we're following the market for the most part - at a much lower value of course - but if you compare the graphs daily to say Exxon and Chevron for the most part it follows. That tells me the daily increases / decreases are strictly attributable to the price of oil throughout the day. On days where we see a huge swing lower - its people getting scared / cutting their losses and bailing. On days with huge swings higher - its either shorts having to cover or new investment.
At the end of the day - if you eliminate the shorts and the fear - LNCO's stock will perform with the market. The only REAL question is how long can LNCO survive. It may take a long time - or overnight - but oil will be back - it always is because like most commodities it's cyclical....can LNCO survive until that day is the only question - and can you afford to continue to tie up your money and live with that risk going long? If you believe so - hold or buy! If you dont think so - get out and cut your losses. If you're out already - then stay off the message board - as what good are you doing for those of us still invested? I really cant and wont believe you are here to try to save me money - I can only assume you are a short player hoping to make an already skiddish investment group continue to bail so you can profit!
"Let say they spend another 500mm this qtr to buy back another 1 BB in debt..."
So, where are they going to get the money to buy back another 1 BB in debt? They sure don't have that kind of capital on hand, if they did they wouldn't have cancelled the dividend. So, are they going to borrow it? But, wait, that would just add more debt, borrowing from A in order to pay B.
So, Two4vollyball, where are they going to get the capital to buy back more debt?
What if they reinstate the divvy a year from now and over that time it bounces to around $5/share b/c oil runs up a little then rockets to $8-10 + divvy. And you bought it for $3 bucks. We know it's not a growing stock, it's getting it's house in order.