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Linn Energy, LLC Message Board

richardleeds 20 posts  |  Last Activity: Apr 19, 2016 5:08 PM Member since: Apr 1, 1999
  • Reply to

    CLMT Not Going Bankrupt

    by bubba_gumm_01 Apr 19, 2016 4:07 PM
    richardleeds richardleeds Apr 19, 2016 5:08 PM Flag

    This is not "a good solid company". It had bad management that expanded at the top of the energy boom by going into debt to make acquisitions that flopped. It now has $2 Billion in debt and very little cash and is borrowing at interest rates of 11% when "good companies" pay 5-6% for debt. There is no reason to hold this equity and lenders will be tougher and tougher on these energy companies that overspent.

  • The price and volume today indicates shorts are starting to cover.
    There is still more covering to take place. I see price jump again tomorrow.
    Also management is going to reduce drilling and sell off some acreage and production to
    have cash for 2017 debt due. There is no incentive for shorting, so question is when do all
    the shorts unravel their positions by buying. The smart money in the shorts is gone now
    and only the fools are going to keep shorting.

  • richardleeds by richardleeds Mar 2, 2016 4:54 PM Flag

    How does the board justify bonuses when the equity declines to nothing during the year?

  • Reply to

    McClendon.....farewell.......

    by boar292hog Mar 2, 2016 3:14 PM
    richardleeds richardleeds Mar 2, 2016 3:36 PM Flag

    One of the creators of the shale and resurgence of energy in the U.S. is gone. I guess he knew that he would be found guilty for price rigging and did not want to spend 5-10 years in prison. I wrote to him many years back congratulating him on his vision and he responded with a nice letter and gift. He really was an amazing individual but he was also reckless. I have taken a beating on my CHK shares and I mean big losses. It still does not change what he did. A sad day.

  • Reply to

    time to buy

    by keoo2 Feb 18, 2016 9:59 AM
    richardleeds richardleeds Feb 24, 2016 9:18 PM Flag

    Wrong. The big refinery is going to shut down again and spreads are not significant for January and February. Will not be surprised if a little or no distribution for first quarter.

  • richardleeds richardleeds Feb 24, 2016 8:50 PM Flag

    Look, unit price has declined 70% in the last year. Nine out of ten MLPs that have had that type of decline in equity values have reduced distributions. I think lenders will ask them to reduce distribution to firm up loan ratios, etc. A cut usually means a decline in equity price. It might be wise to lighten up and try to buy in at the bottom. Not sure the bottom has arrived. I expect many MLP bankruptcy filings in the next 2-3 quarters and everything in the MLP space will probably be tainted by that.

  • Reply to

    I don't Understand

    by jaxseeker Feb 23, 2016 7:24 PM
    richardleeds richardleeds Feb 24, 2016 1:44 PM Flag

    EPS dropped from 70 cents to 50 cents. Big percentage decline. Stop looking at revenue. Revenue is up 100% over the last 5 years but earnings have dropped by more than half. Management gets paid based on rent gross receipts and they have been adding buildings even if less profitable.

    Analysts and most investors want growth in EPS or for partnerships growth in distributions. Not happening here.

  • My call is that CLMT will try to dump a refinery, especially since they took on debt to buy it and now have taken on $75 million in additional debt by taking a loan from the GP.
    Selling an asset at a loss will drive down unit price. Also, how do investors react if the GP has to make another loan in the first quarter as they did last quarter. I doubt any asset put up for sale will close in one quarter. If first quarter is like the last one and they get smart and cut the dividend this is going lower. Of course all MLPs could go lower as some of them start going into bankruptcy court during the next 1-2 quarters and the entire MLP sector gets impacted by that bad news.
    How much lower is this going? It dropped 50% in a short period of time, would not be surprised to see another 25% drop.

  • richardleeds richardleeds Feb 19, 2016 2:06 PM Flag

    I believe these units came to market at around $17.50 and insiders can take this private at half that price at the present time. The smart thing to do is for the insiders to keep buying units at these prices and acquire the rest of the units at market price when they reach 80% of the units. Looks to me like they have sand-bagged the small investors.

  • Listening to the conference is sounds like management and board were asleep while expanding for expanding sake. Investors do not know if the the GP will have to do another loan if the first quarter turns out as bad as the last quarter.
    Then what happens if next quarter they finally get smart and cut the dividend.

    Prices are going to fall the rest of this quarter as the energy MLP sector continues to get killed and there is doubt about the dividend and the pricing of this equity.

  • richardleeds by richardleeds Feb 18, 2016 2:57 PM Flag

    CPLP has the largest percentage of its boats chartered to a company that looks to be in great distress and priced for bankruptcy and the outlook does not look good. If five of its boats end up in bankruptcy court, CPLP spends good money on a one or two or three year court proceeding. Also, the very fact that five of their ships could be tied up in bankruptcy with the outcome uncertain is not going to result in new shareholders being attracted to CPLP as an investment. So what does this do the shares. The uncertainty and unknown is not good for CPLP. Seems to me management should have said: "we are going to reduce the dividend, buy back units at these low prices and increase dividend coverage and build a cash cushion. Instead I saw no precaution or defensive management moves so as not to be caught with their pants down in the event of further deterioration of one of their operators.

  • richardleeds richardleeds Feb 12, 2016 2:43 AM Flag

    The goodwill would be lower in the 10-K by any write off of goodwill during the last quarter. I still wonder why they did not want to disclose in the conference call the amount of the asset reduction for goodwill. I do not understand any company paying out 25% for a dividend when it is debt that can hurt you. The debt cost for the next five years is going to be be higher than the last five years especially if interest rates rise by 1/2% per year. Or even 1% per year in the later years. Having a quarter of a billion subject to rising interest rates for a small company is not wise in my opinion. I do not think they will attract new investors to drive up unit price with that 25% dividend sitting out there. Investors will be waiting for the 50% cut in the dividend and the accompanying price decline in the units with that cut. I think this is the one mistake management is makings.

  • Investors should look at the Yahoo balance sheet or the company balance sheet.
    The total Goodwill and intangible assets are quite a big number in comparison
    to the fixed assets. I really do not like to see such a high number as these two
    assets do not generate revenue, they are non-productive assets as they merely
    reflect excess acquisition prices paid to acquire other assets, etc..

    Between the debt of $700 million and the non-productive assets of $300 million,
    I would like to see them cut the dividend and strengthen the balance sheet by reducing debt.

  • richardleeds richardleeds Feb 11, 2016 1:18 PM Flag

    I liked the CEO saying he was buying shares when permitted and would consider additional purchases when allowed to. The only negative for me was the borrowing base which is close to the amount allowed by its bank covenants. Also, a caller asked what was the amount of the impairment charge to Goodwill and rather than answer the question they told the caller to look at the 10-Q fled with the SEC. I guess they did not want to disclose the magnitude of the loss in the value of Goodwill and have others jump on that issue. Personally, as a retired former accountant, I hate to see Goodwill on a balance sheet because Goodwill is so nebulous, being the excess amount paid for assets above their actual carrying value or appraised value.

    Shares are down again big time today and the market looks like it is in free fall. These corrections are nasty especially if we fall into recession after 5-6 good years with low interest rates. If the market indexes are going to fall another 10% the MLP sector could fall more than that as it is out of favor.

  • richardleeds richardleeds Feb 11, 2016 3:53 AM Flag

    Good call. Management is buying when they can. Problem as I see it with the public is they are afraid of the MLP class or sector. One issue I heard is that the borrowing base is not supposed to be 5 or greater in 2016 and it is currently at 4.8 so there is not margin for a business decline where they might be in breach of lending covenants and have to negotiate with lenders. I wish they had decided to reduce the dividend and pay down some of the debt which would be reported and potential investors would be attracted to a company that said it was going to pay down debt.

  • richardleeds richardleeds Feb 10, 2016 8:15 PM Flag

    I did not say that health care REITS depending on government revenue do not face issues. Obviously private pay health care reits are different from those depending on government funds and government audits and oversight.

  • richardleeds richardleeds Feb 9, 2016 5:47 PM Flag

    I do not think Brad Thomas is the issue regarding OHI and GEN. Nine out of ten stocks around the world have been going down. In the U.S. the market actually went up for five years and markets do not run forever. U.S. markets can easily continue to be in a bear market for 2016 and we could see another 10% or more decline. IMO

  • richardleeds richardleeds Feb 9, 2016 5:42 PM Flag

    if is a "big" word - very warm here in California compared to most winters

  • richardleeds richardleeds Feb 2, 2016 2:37 PM Flag

    next quarter this is going much lower as results will be much worse than this last one. Yeah, CEO keeps talking about being profitable at $60 oil when oil is around $30. This is going to be ugly. Why own the shares as they go down each quarter more than the 2.5% dividend. Should cancel the dividend and buy back shares and pay down debt.

    I would not be surprised if the shares do not decline another 10% by the time he goes on tv again after the first quarter. Then when the next quarter news comes out this falls another 10% that week.

  • BP had terrible results and listening to the CEO last night for about 10-15 minutes it sure sounds
    that it will be much worse this March 31. He kept talking about how they could be profitable around $60 a barrel. The problem is that he kept saying that and the interviewer kept saying oil was at $30+.

    This is going to get very ugly over the next one or two quarters. It is bad now. If earnings dropped 90% they are not going to have earnings next quarter, only a loss in my opinion. CEO said he would not cut dividend. As this gets worse he would be crazy to pay out money at 10% rate when he should take money and buy up shares or pay down debt.

    Crazy.

    Wonder how low this is going?

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