Seems to me that yesterday's 8K announcement after the market close should have a positive effect on Linn's price. It's a complex 1031 arrangement that gets Linn off the hook for taxes from the Devon deal, opening the door for a cash sale of the Granite Wash and Midland Basin properties. Possibly a sale of the properties could be fairly close now. Am I interpreting it all correctly?
Well . . . it's not positive. What is means is they couldn't close on the sales necessary to make this a whole heck of a lot easier, that is a "normal" deferred exchange, where the sale occurs first. They also couldn't get Devon to agree to extend the closing to give them more time. Now they have to scramble to get the sales done, yeah, they have time limits running. But that's not positive either.
My takeaway is that maybe they're having some difficulties with the sales? Or not, maybe this was intended all along. It's a bloody complicated arrangement, that's for sure, the attorneys can retire on the paperwork alone. I notice the lease agreement isn't included, where LINE pays the accommodation holder for use of the properties in order to collect the income and service the interim debt.
There are some financials for the properties acquired included, audited I note.
I also note that Kaiser said "disclosed in 8-K: YE13 PV-10 of $DVN assets that $LINE bought = $1.27B. $LINE paid $2.24B for them" Which is true, but of course he doesn't point out that only includes proved reserves, and that the assumptions for future prices were based on $3.37 gas, $88.04 oil and $21.69 NGL's, a tad conservative to say the least! I don't think the banks would have handed LINE double the worth of the properties.