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Linn Energy, LLC Message Board

  • navkram navkram May 8, 2013 9:05 AM Flag

    How barron's is misrepresenting Linn

    barron's is just a mouth piece for short hedge funds that see individual investors as prey. All they need to do is is scare them out of their positions.

    The hedge issue and the capital spending (with too little growth in output to show for it) are one in the same. Linn expanded its hedging out several years in the past few qrts. Linn accounts for these hedges as capital. When oil or gas is sold, the cost of these hedges is recognized along with the benefit of owning them. Does that sound right to you? GAP says it's right. Wells says it's right. Raymond James says it's right. Barron's says hedges are expenses to be taken years before the benefit is realized and that their value disappears until it pops out of nowhere as above market price years later. That would make Linn temporarily worthless followed by a crazy windfall -just what hedge funds want!

    Barron's is just allowing the hedge funds to rewrite Linn's books for wild swings to scare out investors looking for steady income growth.

    Linn's output didn't increase as much as capital spending because Linn spent big expanding its hedge book out several years -and it has paid to do so! Linn has a higher valuation because of this output price certainty. Smart hedging of output is why Linn is bankable and able to buy E&P assets cheap from companies that can't afford to develop them due to low commodity prices.

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