The question is, can oil prices stay in the $40's ? I don't think so, which makes it a buying opportunity.
And what's different ? Gov't contracts have been going to contributors since Thomas Jefferson's day. Why do you think Washington DC has so many lobbyists ?
Also, I contacted Nicole, author of your piece, and she admitted she used data from April when referring to increases in production. Its just another hedge fund, short seller piece, counting on people to not do their due diligence and just accept the headline as fact.
If you had bothered to read the EIA report, you would have noticed that US imports of oil increased by 5.2 million barrels for the week while US oil production declined by 2.3 million barrels for the week. That is not my definition of "a sharp ramp up in production". Its my definition of an increase in inventories do to increased imports of oil. Probably accounted for by the Tropical Storm that moved through the oil patch recently scrambling the oil tanker fleet schedules.
Linn will announce results that will beat the market estimates and the stock will go up. Then Mark Ellis will get on the conference call and stick his foot firmly into his mouth and the stock will go down. That's the play book from the previous quarters. He can't help himself, he just does it.
I've got the distribution at closer to $0.40 based on average price of $55/barrel and costs of $27/barrel. This dividend level would make MVO worth @ $9.69 per share. Its getting pretty close to that now.
That has to be the dumbest post I've ever read. You have got to be getting all your news from FOX.
No CFO would say something like that, and I doubt if a poster had a supposed 1hour conversation withthe CFO. The poster was blowing smoke.
I doubt you spoke to the CFO. No CFO would ever admit what you said this CFO admitted. If the sheriff was at the door and the movers were taking the furniture, the CFO would not admit what you said he admitted.
Linn is a heavily leveraged oil company. When oil goes down, Linn will go down more than the rest because of their leverage. When oil goes up, Linn will recover. The big question is when will oil go up. I'm a believer in a 3 year cycle that we are 7 months into. If and when oil recovers to the $85-$90 range, Linn should recover to $25-$30 stock price. If you look at other MLP's and trusts, they are all getting hammered just as bad as Linn and there are some real opportunities in some of them when oil recovers. They would be 'A' candidates to invest in, Linn would be a 'C' candidate. Look around at other issues before committing to Linn.
The problem is that this is a 3 year cycle. We're only 7 months into this 3 year cycle. A lot of oil companies hedge their production and have not even begun to feel the real pinch from lower oil prices. 2016 is when the pinch becomes very real and a lot of deals will get made. Its also when the production declines become very real and worldwide supply/demand flips around to a supply shortage and prices begin moving up again. Unfortunately, it looks like $85 barrel may be the top for the market due to abundance of shale oil available above that price.