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Linn Energy, LLC (LINE) Message Board

  • jackhiller Jan 18, 2013 4:51 AM Flag

    OT Congrats to rip and Liza on their NTI unit offering analyses

    Rip observed the action is not to raise money for NTI, but drawing money out of NTI unit to line pockets, and Liza suspected that the timing was prompted by management awareness that the refinery business was in its sweet spot and ripe to sell. Both exactly right.

    Consider that the IPO this past summer was only able to price the units at $14, but with business good now, and SA, Motley, and a few analysts rating the stock a buy, these bright sellers are getting more than 10 bucks more.

    What's happening is that the means for moving the Bakken and Canadian crudes they buy are now selling at discounts because of the transport bottlenecks, but more pipes and rail cars are coming in to play that will ease the bottleneck and raise their crude costs, and when the extra cost is passed on to their customers, it will hurt their competiveness, even though refinery competition in their immediate area is from only one other refinery.

    In contrast, the new MLP with its IPO on Thursday (CVRR, w/o an IDR) owning two refineries, some pipes and storage, seems fairly priced at $25-26. Even bought some.

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