Looking at Linn's last quarter balance sheet, its oil and gas properties are valued at $7.5B as of 31 Dec 2015. This is down 25% from the 30 Sep 2015 balance sheet valuation. Is this property asset valued at the last day of the quarter, or does Linn use an average value during the reporting quarter?
This last quarter was the first one where stockholder equity turned negative.
Oil prices are currently 38% higher today than 31 Dec 2015, making Linn's oil and gas properties worth $10.35B (if the reported value was as of 31 Dec). How does that affect the bank's loan/asset coverage ratios? If this number is accurate, Linn stockholder equity has now turned positive, which makes BK a little dicey for mgmt. when stockholders could claim they had value taken from them based on the intrinsic value of the assets of the company vs debt.
This is OLD NEWS! Article posted in Houston Business Journal (available on Yahoo Financial News) on March 15 (30 days ago) states:
"In its earnings report, Linn also noted other circumstances could cause the company to be in default of debt agreements. As of the March 15 report, the company is in default of its credit facility because it had to include a paragraph regarding doubts about the company’s ability to continue as a going concern. It has a 30-day grace period to obtain a waiver or similar relief."
The only NEW NEWS is that Linn paid interest due on the preceding debt during its 30-day grace period, which is GOOD NEWS.
The last paragraph you quoted from Reuters is 30 day old news. The stock is going up because Linn made its interest payments that were deferred 30 days ago and is now in negotiations with other creditors, opting to delay those payments as it did a month ago. This is not the doom and gloom you make it appear.