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Linn Energy, LLC (LINE) Message Board

rrb1981 145 posts  |  Last Activity: Jul 22, 2014 11:20 AM Member since: Apr 18, 2001
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  • Reply to

    No problem, held serve

    by coochy.cooty May 1, 2014 8:44 AM
    rrb1981 rrb1981 May 1, 2014 9:08 AM Flag

    Agreed coochy.cooty.

    Coverage was better than some had predicted based on peers having issues. I think the basin diversity helped Linn whereas it likely hurt VNR.

    So coverage of essentially .98x, with 1 quarter of Berry under their belts and that Q was one of the bad weather Q's.

    I'd expect the next 2 Q's to be generally more favorable in terms of weather and hence should potentially have less impact on oil.

    For those that are disappointed, I'd remind them that this is what a "typical" E&P MLP is supposed to do, crank out steady (if not boring) results quarter after quarter, where they manage decline, commodity prices and cash flow. Linn was a little light this Q, but will likely be above 1.0x the next 2 Q's. We also have not seen the full impact of the moderating capital program, which will manifest itself in the form of reduced maintenance capex.

    If this drops much today, I'll add some more LNCO, which is still giving a very nice yield with the potential for nice capital gains when the divestment/JV happens.

  • Reply to

    Old Timers

    by plan.maestro Apr 24, 2014 7:27 PM
    rrb1981 rrb1981 Apr 29, 2014 12:06 AM Flag

    Indeed it is becoming interesting. The divestment of the minerals business was the beginning of the decline. I followed EROC because of the minerals business (i have very large holdings in DMLP and SBR) so I like to follow mineral rights holders as well as royalty trusts.

    Then the divestiture of the midstream was the second blow.

    Now, EROC will be a pure E&P, with a, as others have corroborated, less than amazing portfolio of assets.

    The only thing going for them will be the low leverage and the ability to lever back up, purchase some decent mature PDP assets. The real question is what will they be able to pay out...with them levering back up, the $.60 looks achievable but one must remember that Joe Mills runs this show, and he is a screw-up.

    It remains a very interesting opportunity.

  • Reply to


    by edlibbybysea Apr 24, 2014 3:34 PM
    rrb1981 rrb1981 Apr 24, 2014 4:10 PM Flag

    The suspension of the distribution at EROC won't help the sector, but EROC has been horribly mismanaged. I chronicled the mishaps a few months back on the EROC board. The latest divestment of the midstream pushes them back to being a pure E&P MLP. We shall see once the dust settles where they shake out in terms of debt and ebitda of base (and thus leverage).

    The conventional E&P assets they hold are not spectacular but it becomes a game of seeing whether the market will misprice them during the transaction.

  • Reply to

    What happened to Hedge Scam today?

    by lordofdoggtown Apr 24, 2014 12:00 PM
    rrb1981 rrb1981 Apr 24, 2014 3:05 PM Flag


    I believe you are correct. Until Linn announces an outcome on the Wolfcamp, we will likely trade sideways. Even then, if they choose to divest rather than develop, then we have to see if the packages are sold off piecemeal or in one or two larger packages.

    In the interim, you just have to hope for solid operation of existing base. A decent sized acquisition, especially a c-corp via LNCO could have an impact. The Goldsmith type deals don't move the needle enough at this point.

    So, it becomes a game of hurry up and wait (and collect the monthly distribution!).

  • rrb1981 rrb1981 Apr 24, 2014 12:47 PM Flag

    Actually EROC is starting to look far more attractive at $4.00. I still think ARP and LNCO are better values at this point. Norris makes a valid point about poor management at EROC (of course, I made the same comments on the EROC board months ago). I think coochy made the comment that this an opportunity for a dead cat bounce.

    I am more focused on ATLS and ARP if/when the Hedgeye report ever gets released (anyone see it yet?)

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