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Linn Energy, LLC (LINE) Message Board

  • thomasturner999 thomasturner999 Dec 18, 2013 10:24 AM Flag

    A 10% Yield for LINE is not unreasonable

    I'm very long LINE and will hang around for a while after getting in during the July fireworks, but I can't make sense of the expectations of high thirties and $40/unit. Today the distribution is $2.90, and we're around a 10% yield. Not at all unusual for an E&P MLP. LINE has certainly traded at lower yields, but that was back when they could do no wrong and had years of smooth sailing behind them. After a year like 2013, I would expect them to trade at a higher yield, at least for a while. Even if they bump up the distribution to $3.08 as was once discussed, a 10% yield still has us in the $30s. Over time I believe LINE can earn back trust and get a lower yield from the market, but I think it will be months if not years. I feel like it's too simplistic to say it's the same LINE as before but with Permian and Berry so the price should be higher than it was before. That ignores any assets that did not meet expectations and any assets that were unable to replace reserves via drilling (because every well's volumes decrease every year). Remember that because of LINE's size they either NEED outstanding drilling results to remain in the same place OR really big acquisitions just to remain in the same place. Would love to be shown what I'm missing, but that's how I read the tea leaves.

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    • It IS unusual for an upstream. Just not this year!

    • better yet, get a 17% yield (annualized) by selling 28 strike puts! The Jan 15 28's put bid is 4.70-

    • correction....of a missing word "not"

      thomasturner999,

      okay, you are missing a few things. I will mention just two.

      You should review the strategy posted at the website as a start.....part of it is below.

      And, you should LISTEN very carefully to the LINE conference call.....the last part just before the Q&A.

      The last few sentences of Mr Rockov's comments where he mentions that the use of LNCO as in the BRY deal is repeatable and more C-corps will follow....etc.

      You seem to be missing the big picture.

      Which company will they buy next is what the question then becomes.

      I think Whiting would be a great next C-corp choice but I am NOT doing the buying for Linn.

    • thomasturner999,

      okay, you are missing a few things. I will mention just two.

      You should review the strategy posted at the website as a start.....part of it is below.

      And, you should LISTEN very carefully to the LINE conference call.....the last part just before the Q&A.

      The last few sentences of Mr Rockov's comments where he mentions that the use of LNCO as in the BRY deal is repeatable and more C-corps will follow....etc.

      You seem to be missing the big picture.

      Which company will they buy next is what the question then becomes.

      I think Whiting would be a great next C-corp choice but I am doing the buying for Linn.

      .

      Here:

      "Grow Through Acquisitions of Long-Life,
      High-Quality U.S. Assets

      LINN Energy's acquisition program focuses on U.S. oil and natural gas basins that provide significant opportunities for future growth and consolidation. We target assets that are financially accretive and provide long-life, high-quality production with relatively predictable decline curves and low-risk development opportunities. We evaluate acquisitions based on decline profile, reserve life, operational efficiency, field cash flow and development costs.

      Organically Grow Reserves and Production

      LINN Energy maintains a large inventory of drilling and optimization projects to achieve organic growth through its capital program. We implement drilling programs and optimization projects intended to not only replace production, but also grow production and reserves. We focus on low-risk, repeatable drilling opportunities to maintain and/or grow cash flow. Many of the wells are completed in multiple producing zones with commingled production and long economic lives. The number, types and locations of wells varies, depending on our capital budget, well costs, anticipated production and estimated recoverable reserves.

      Reduce Cash Flow Volatility through Hedging

      LINN Energy has attractive commodity hedge positions in place to provide long-term cash-flow predictab

    • I agree with 80 percent of what you say I esp agree with the beg part of your statement

 
LINE
31.15+0.17(+0.55%)Jul 22 4:00 PMEDT

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