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Linn Energy, LLC (LINE) Message Board

  • norrishappy norrishappy Feb 11, 2014 3:00 PM Flag

    Rationalists realize at this point we need the information on the call

    A return of 1970s weather patterns has resulted in a very cold and snowy winter. Very cold weather can reduce production. It also resulted in spot prices and nexy month prices well above the aveage put strikes.

    Good teams often find ways to produce through weather while average teams do not. Which is why ethane spiked above gas. No ones except LINE insiders know at this point.

    The BRY acquisition distribution increase was taken off the table due to the premium we all had to pay thanks to the Obama SEC which found nothing material or even worth public comment. I have to admit I do admire management sticking to their guns and not changing their reporting to give those clowns political cover. Forward free cash flow is the same no matter what it is termed. No matter how long the description becomes.

    Oil is up and so is natural gas. But both markets remain in backwardization. Which means management will not be aggressive in extending the hedge book at this time.

    So I really do think we are looking towards the end of the year for an increase. Capital plans implemented and the integration completed.

    Given the collectivist connected short attack was highlly successful, management is going to have to error on keeping the coverage ratio high with the future markets in backwardization. Especially if they take the prudent risk of taking some time to let the futures market return to normal patterns of contango pricing.

    Nothing wrong with collecting big distributions while we wait of a government stalling out a normal recovery. Then not only do we get increasing demand but also natural gas expost.

    Corn ethanol is close to being pushed over. Taking out Reid is likely the key to forcing Obama's EPA back to the law and science. That would be very good for all Americans and our shale oil pricing.

    There are many other equities which scare me more than LINE today. Further they do not pay a very large distribution which seems secure now.

    Best fortune.

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    • Remember that LINE management updated guidance for the 4th quarter on 12/3:

      LINN Energy, LLC ("LINN" or the "Company") reiterates total estimated production during the fourth quarter to be between 840 MMcfe/d and 860 MMcfe/d, which includes the impact from recent severe winter weather in the Permian and Mid-Continent operating regions. Additionally, LINN increased its fourth quarter guidance for "excess of net cash"(1) to be approximately 5-10% above the Company's current distribution, compared to prior guidance of zero percent above the Company's current distribution. Both estimates do not include the anticipated positive impact from the pending merger with Berry Petroleum Company ("Berry"). During the quarter, production has remained on-track, NGL prices have continued to increase and the Company has continued to realize lower operating expenses, all of which have contributed to this updated fourth quarter guidance.

      For the full-year 2013, LINN estimates production growth of 8-10%, which remains on-track with the previous guidance provided by the Company.

      November had been brutally cold, but there was more tough weather after this guidance was posted. Whether the improved NGL prices will make up for any cold weather production losses in the last 3 weeks of December will tell the tale.

      I am not so focused on Q4 or even whether there is an announced distribution increase, although the market will surely react one way or another, what really matters is how effectively the BRY assets can be assimilated into the mix and what efficiencies will result. We should be seeing this by late summer and I think many of us will be smiling then....

    • Explain what you mean by this statement as well.

      Oil is up and so is natural gas. But both markets remain in backwardization

      • 3 Replies to opinionsarelike33
      • Backwardization can also describe what happened to LINE this afternoon. If the Fed remains accomodatative, that keeps interest rates down, which is good for all the MLPs, REITs, etc, which pay high dividends. The selloff this afternoon is inexplicable.

      • Stag's Opie there are spot prices which are up. The current spot market price where swaps and puts are settled. Then there are out in the 'future' prices which can be seen on the CMRE or NYmEx sites.

        The forward future price for natural gas with March settlement is about $4.80. December 2015 delivery is about $4.20. The term for future prices lower than current prices is backwardization.

        Maybe if you settle down rather than being belligerent board primitive you would have learned this one of the countless times it has been explained here.

        The caliban moniker ran around and was reasonably close to understanding. But it could not get the final piece in place because it did not fit its politics as religion beliefs.

        What is depressing the natural gas markets is associated gas production from oil development. If demand picks up from a normal economic recovery or export, the dynamic can change instantly.

        If the gas rig count does not increase it is just a matter of time. Counting down to Obama's retirement.

      • The term backwardization mean shorting sellerization.

        Sentiment: Strong Buy

    • The BRY acquisition distribution increase was taken off the table due to the premium we all had to pay thanks to the Obama SEC which found nothing material or even worth public comment.

      How about explaining what this means. I didn't see where Obama said to the SEC go investigate LINE.
      And then explain this as well.
      The BRY acquisition distribution increase was taken off the table due to the premium

      • 1 Reply to opinionsarelike33
      • are repeating something that you posted before ["acquisition distribution increase was taken off the table due to the premium"]

        ........... which just seems to be where did you get that from?

        Just make it up?

        And, did you forget the other accretive Permian basin acquisition for 525M?

        How about the 9 months it took to close the BRY deal and the added production rate & BRY exit rate?

        You seem to focus on the extra $600M paid but also seem to leave out any mention of how much more BRY was producing on Dec 16, 2013 rather than 6 months earlier.

        Do you even know the new-er BRY exit rate on Dec. 16, 2013?

        It is mentioned in the Linn presentation for anyone who may be interested.

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