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Linn Energy, LLC (LINE) Message Board

  • arfulbark arfulbark Jun 6, 2012 12:05 PM Flag

    hedges

    So I'll also ask IR, but do any of you know the more specific nature of the "price hedges" which are said to be an advantage for Linn as they purportedly "guarantee" ng prices out through 2015. I read an article that described some of them as "default swaps", and I wondered how solid the price hedges might be or if some of them might fail if prices do in fact remain low. Presumably some of the folks who hold the other side of the hedge might try to weasel out if they have to pay much more than the actual current price when the hedge comes due. Or they might have gone under for one reason or another. Comments?
    My position, just bought a few shares and might buy more, but it's hard to pay $2 more than I just paid two days ago. The yield is great though, and is there any consensus on how solid the yield will be in the next couple of years?
    Arf

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    • Ad hominem A Latin phrase that has come to mean attacking one's opponent, as opposed to attacking their arguments

      You do not know or understand enough to hold your positions so it is Ad hominem this morning.

      "Conservative" who hangs out with the anti-American William, the corn monster, The mysterious X force that claims past performance is the surest way to future stock market returns and the rest of the Obama supporting monkey troop.

      Sticks, stones and stars from a monkey army of about one? ;-)

      It is amazing that on a natural gas board 'investors' would favor Obama when natural gas would displace corn ethanol corruption in a free market and we all know he wishes to unleash his radical EPA on fracturing technology.

      Anything rational? Is this the way expert investors make money? No.

      As that great avatar Sherlock Holmes said ‘Once we eliminate the impossible, whatever remains no matter how improbable must be the truth’.
      About all which is left to explain the troop behavior is Progressive and crony capitalist; like stagg the ethanol corn monster, Obama supporters. Like the Unions in San Diego, San Jose and Wisconsin they will continue playing the misdirection game even as the average American; even in Progressive States, sees right trough it.

    • Double down on delusion for you this morning?
      The EP industry has a capital budget which exceeds operating cash flow at a now above market price of WTI at $90.
      So either the investment programs are cut or there will be asset sales.
      It is not possible to have a civilized conversation with individuals that form a mutual support clever monkey troop rather than embrace their potential to be full human beings embracing rationality and personal integrity.
      These are serious time for all Americans. The world economy hangs precariously and only American economic growth can pull it out.
      Yet you play monkey games like showing a graph of a one to one correlation of corn prices to oil prices; not matched by any other grain, and then maintain I must prove it is not due to oil input. Even
      http://fbfm.ace.uiuc.edu/pdf%20files/Farm%20Business%20Results/Cost%20of%20Production%20for%20Grain/c&s_north.pdf
      The largest cost input is soil amendments which are being met by domestic natural gas. As is drying. Planting of corn which requires massive fertilizing. The fertilizer companies are keeping the pricing due to corn over planting driving demand beyond current capacity.
      To this we can add a possible sharp pull back in domestic oil drilling due to a lack of investment capital. Now that Obama has managed to kill natural gas production and coal production it could be very devastating to our economy.
      Can mature, fair and Just Americans who believe in The Blessing of Liberty to ourselves and our Posterity afford to take winged monkeys playing with stars seriously at this time? No. You can play with stars and chatter from your trees but you will not be allowed to interfere with getting our economy on our traditional path of free market stability.

    • rp,

      You are arguing with a mad man. I honestly believe norris has some sort of chemicl imbalance or mental issues or perhaps turmoil in his life that causes him to lash out at others. He is trying to assert himself as the self proclaimed king of the message board perhaps because he has no control over things in his "real" life. I suspect norris is probably an alcoholic and bi-polar.

      To bad for him, we can see through his silliness. What is really sad is that he could be channeling all of that hostility towards something productive but instead he wastes it on his fragile ego.

      As I have said before, there is a reason he is the one star king. Even his homeboys don't come to his aid anymore (if you go back and read the messages..you can clearly see where his homeboys simply walked away from him, no longer wanting to be associated with a him - you will note it is norris who is always having to ask his homeboys questions...not the other way around. They don't interject in his prattle anymore.)

      His childish antics are stale. His name calling and attempts to manipulate are weak attempts to build himself into something he isn't. His self rightous bombastic preaching is empty and boring.

      BTW, I think he confuses you moniker, my moniker and rlp's.Oh, and you are right rp, and he is wrong in case anyone was keeping score!

    • Yes, I am sad I even try to have a reasonable discourse with you.

      You said that if oil goes below $90 then all E&P companies will have to conduct asset sales, and Linn can jump on them due to their ability to obtain financing.

      I will ask you again.

      Where does it say that all companies are tied to the $90? ONLY EOG said that.

      I do not disagree with the premise of the article - how could I, it is correct. But YOU made an erroneous assumption in order to mislead the board. Then you made up a headline to suit your purpose, which was not the original headline at all.

      I lied about nothing. It's you who can't face the truth.

    • Yes you are a winged monkey troop member and therefore a blad face liar.

      Clearly the EP industry in general; which excludes LINE due to the full long term hedging program which is most uncommon, cannot fund their publically stated capital investment programs at current oil prices.

      After what happened to the likes of EROC in 2008/09 banks are not lending in the commodity patch. Few if any other EPs have cost effective access to the debt markets. Do management's want to issue more equity when shares prices are already down hard?

      So where do you think the capital to fill the shortfall can come from? Perhaps EPs do the logical thing and cut back their drilling programs and the one bright spot in our economy other than chemicals?

      Surveying 29 E&P companies on their projected 2013 cash flow, before hedging effects, ISI Group's Jonathan Wolff finds oil price sensitivity is greater. For example, at $100 oil and $2.50 gas, the group's cash flow totals $61.9 billion. Drop the gas price by 50 cents, or 20%, and that figure drops by $3 billion. But dropping the oil price by $10, or 10%, takes off $6.7 billion. This is compounded by steep drops in natural-gas liquids prices as logistical bottlenecks have eased.

      E&P stocks have dropped 20% since the start of May. Even so, Arun Jayaram at Credit Suisse CSGN.VX -1.93%reckons 2012 cash flow forecasts for large-cap E&P stocks using current commodity price consensus estimates are 15% too high relative to forecasts based on actual energy futures prices. Estimate revisions on the back of cuts to energy price forecasts present a risk of further falls.

      The kicker is that falling energy price expectations will likely prompt E&P companies to adjust their budgets for capital expenditure, asset sales and, by extension, production growth. Even at current consensus oil and gas price forecasts, the sector outspends its cash flow. Speaking at a conference last week, EOG Resources' EOG -1.64%chief executive said he might sell assets or cut capital spending next year if WTI averages $90.

      Look this is standard journalistic structure. Provide an accurate general picture and then a specific example.

      In monkey fashion you attempt to stand the whole structure on it's head!

      I just can not wait for the monkey see monkey do stars this morning. What a waste of life you are. You have the potential to embrace your full humanity rather than primitive emotions and scurry about in the dirt existence. YOu are truly sad.

    • SO -
      You make up a headline to prove your erroneous assumption and call ME a liar?

      Get real.
      Typical Obama ploy.

    • Look at the heading of this thread.

      This is the statement and what you dishonestly posted was the example of the industry trend. Case closed.

      A troop of chattering mawkish monkeys playing with stars will change what you just did to yourself.

      YOu know you Progressives really should stop. Look at the results of the last election. In the Bluest States.

      ALthough Obama completely discrediting the Progressive agenda for at least a generation maybe the best thing to happen to the Democratic Party post Kennedy.

      Get some real Constitutional Democracts lead the party.

    • I did nothing of the sort.

      It was just the reverse. I proved that you made an assumption that was totally incorrect, and have yet to show your proof other than obtuse conjectures, which are your M.O.

      Trying to reason with you is like trying to reason with a rock. At least we monkeys have opposable thumbs.

    • Maher’s Opinion,
      The log jam is in Harry Reid’s Senate. He does not allow votes as Democrats there would go against Obama.

      The Republcians house has been very active and sometimes bold in leadership.

      So we need to replace Obama and make sure Reid does not control the Senate to get on with priority one which is economic growth which creastes jobs.

      Given the absurd level of Obama/Progressive corruption / economic dislocation / uncertainty this will not be difficult to achieve - If Obama and Reid are out of power they will not wield like mature responsible adults.

    • I just proved you purposefully lied as to the content of the WSJ article. Also gave you the chance to correct yourself in case it was an error which you refused to do.
      So like the rest of the OLB you have no integrity and therefore character. As you have no personal character it is pointless to discuss any subject with you, per the rules of rational discussion set down by the Greeks thousands of years ago.
      So what do you think you are waiting for? The only rational course was to exposure your attempt at deception and your worthless personal character. That was done.

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