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Linn Energy, LLC Message Board

  • jrad52 jrad52 May 4, 2013 7:57 AM Flag

    Today's Barrons

    has another really negative article on LINE. Still referring to the accounting for hedges/puts, but also declining production even with lots of acquisitions. Barron's last article on LINE didn't have much effect. We'll see this time, but I would at least expect a hit on Monday.

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    • Linn Energy may be the country's most overpriced large energy producer. The controversial domestic oil-and-gas company, which is structured as a publicly traded partnership, has for years used aggressive accounting to prettify its financial statements, and serial acquisitions to shore up its reserves. Signs now suggest that those strategies, which are legal, may no longer be working.

      The firm's partnership units, which trade at $38.50, may be worth less than half of their current quote, based on a range of financial measures, including book value, cash flow, and the value of energy reserves. Linn's distributable cash flow looks significantly overstated. For starters, it doesn't reflect the cost of financial derivatives, mainly in-the-money put options on natural gas.

      Barron's is revisiting Linn because a bigger problem is now apparent. The company's energy production has flattened, despite heavy capital expenditures. The first-quarter financial report released on April 25 showed total energy production averaging 796 million cubic feet per day, with oil and other liquids production converted to an energy equivalent amount of natural gas. That was down from 800 million cubic feet a day in 2012's fourth quarter and little changed from the 782 million cubic feet in last year's third quarter.

      The first-quarter production was below prior Linn guidance of about 827 million cubic feet per day. It attributed the shortfall mainly to a series of one-time events, including bad weather. Linn, however, expects little change in second-quarter energy output. And the company looks for improvement in the second half of 2013.

      Based on Linn's estimated value of its proved reserves and other assets, its units are worth less than $20.

    • I imagine senior citizens will be fighting over the Barrons at the public library this morning.

    • It will be very interesting to see how much; if any, general credibility a Barron's label has.

      $20 is very silly. Actually absurd.

      Confirmation being Rlp'D starve human beings for Obama's progressive corn ethanol corruption posted it.

    • Price target still 43 according to yahoo. Will there be another statement on the LINE web site replying to the article?

      Sentiment: Hold

    • Like you said, Barron's didn't move the needle with their Feb 18th negativity (in fact the stock went UP then). I expect even less effect this time since they are not reporting anything really new on the accounting and reporting other "news" backed only by speculation and assumption. I wonder why they like spreading FUD? Can they be short LINE?

    • shorts must be very desparate in light of possible BRY deal closing. BRY stock continues to rise to even new highs. Article even admitted distribution is supposed to rise when deal with BRY is completed.

    • The dividend is going to monthly in July, not sure all is doom and gloom. Value Line has a range 50-75 3 to 5 years out. "Indeed, based on the recent quotation and on the healthy improvement in revenues and earnings we anticipate over the pull to 2016-2018, the units have worthwhile appreciation potential for the coming years." Don't see any reason to panic, Berry will help a lot also.

      • 1 Reply to phil_w40
      • I wouldn't put a lot of faith in ValueLine's forecasts.

        If you followed their recommended strategy of buying/holding only shares ranked 1 and 2 for timeliness and selling those ranked 4 & 5 you had the worst possible results last year whether you adjusted or didn’t adjust throughout that very volatile environment.

        Check out what they said about Atlantic Power last September, and then see what happened to them.

    • If at first you don't succeed.....while there may be some concern over rapid depletion of some of the fields plus accounting questions, Mr. Market has already reconciled these issues. The Barron's article has the appearance of being another shot by short sellers to drive down the price again.
      The fact that a Director just plunked down a Quarter Million $ on the stock says otherwise.


    • I read Barron,s and pick 2 to 3 buys a week, keep a while and sell The so called Barron,s Bounce has not failed , the ones I pick have been easy gains. So they do have a following. I sold LINE @ $38.89 on the fall. I doubt this "short hit piece" will have a big effect. It might add some to the usual sell off after ExDay. Will watch but not a buyer.

0.180.00(0.00%)May 23 3:59 PMEDT