You and [everyone else] will probably find the 17 comments under that article pretty interesting....feel free to post any comment you like the best.
From the looks of it some of the some of same readers from here commented about that article....with some fairly "strong" comments.
Easy to find it:
July 25, 2013, 5:50 p.m. EDT • CORRECTED
Omega Advisors’s long-term stock picks
Oh, and they did post a correction which is also worth reading.
ops, Texas is the #1 state for OIL & Gas production.
And if you may have been wondering about Linn's gas production in Texas this may be of interest.
So, here is Texas:
2013 Texas gas production
#18.......... LINN OPERATING, INC.......... 77,707,912 (MCF)
It looks like Linn moved up in rank from #25 for gas production in 2012 in Texas, to #18 in rank for 2013.
With the new BRY Permian basin acreage and production, I expect it will move up in rank again in 2014.
How about Oil?
ronharv, I think you seem to be a little worried about things that you do not need to be worried about and here is specifically why.
Specifically....Slide #33 in the last presentation should eliminate the concern about dcf....take a peek when you have time and please let us know if that is any help.
Please also keep in mind that BRY closed on Dec.16 & I think one of the notes at the bottom somewhere says that BRY is not even included in the numbers yet.....so I expect Q1 numbers to look a bit better still because of the added BRY production, as well as higher prices for NGLs (unhedged-with direct benefit as prices go up) & also the oil & gas prices both now above the 2014 hedge prices.....and....how nice the puts work at times like now?
And, the 2017 oil prices do not (now) matter.
.....as I explained several times before.
..It is not even 2015 and way before 2017 more hedges will be added and not at a time when prices are low, but when they are higher.
...and I even posted a specific example demonstrating this and how Linn adds to their hedges over time.
You can see it again by searching my message history or we can find it and re-post it and you can also check what I described in the past presentations for verification on the hedging slides or in the hedging updates.
So, try not to worry to much about 2017 right now since it is only 2014.
That is a concern you have mentioned before. I wonder why you keep repeating it?
Well, I really see no concern for 2017 now unless you can enlighten me as to why, or if you really think that sometime before 2016 that you will probably not see oil prices for delivery in 2017 way above the $79.91 that you mentioned.
ronharv, I do not know why you seem to be concerned about dcf since the last few presentations say that they have more cash than they need for distribution plus....they reaffirmed guidance and posted the percentage above. They said that Q4 excess of net cash is 5% to 10% above distributions...see slide #33.
My concern is on slide #8 in the most recent presentation.
I expect either a comment about how "robust" the M&A environment is .....now that LNCO is a proven acquisition tool to buy up c-corps.....which seems a bit like code for we are looking to buy the next one.
OR, since slide #8 shows the last 4 years of acquisition totals as:
That implies (to me) that in 2014 they will buy more than the total was for 2013 since there seems to be an increasing trend.
So, that may imply that since there are only 4 CCs.....each one of the conference calls should have some info on what they will buy....because that is a lot to buy all in one year.
So, I expect to hear something about what they will be buying next.
go5shawk, I do not agree and it seems to me that you missed the point.
What management tells you is what matters, not what you think that they should do or what they might do.
I also think that it does not matter much because it seems to be somewhat contrary to the posted Linn strategy where they state that you should expect them to be looking now to be buying more accretive acquisitions.
You will probably hear more about it during the conference call.
And on your concern about cash, in addition to the added revenue from the added BRY production & the increased prices for gas & oil since the BRY closing, ...... please see slides #36 & 37 with attention to the new cash after the BRY closing and what Linn did with some of that cash.
Now about this:
" As for your year old quote quote that Linn was intending to raise distribution in the quarter after the BRY closing, a lot has changed since that was written "
Well, there was also a $525 additional accretive acquisition in the Permian basin which added to production.
Still,....that may be true...except that there has been NO other information to support your preference and NO information that I saw anywhere that says anything other than the distribution will be raised in the quarter after the BRY closing as was stated on Feb. 21, 2013 in that news release....which is now....Q1 2014.
Please feel to post anything that you saw indicating otherwise......I would like to see it.
The reference is indeed a year old from the news release of Feb. 21, 2013....BUT there is nothing since then to indicate otherwise that I saw.....except what you posted as what you think they should do.....which may be how you feel but really does not matter.
This is the relevant part of that news release:
"The recommended increase is anticipated to take effect in the quarter immediately following the closing of the transaction, "
richardleeds, you make some interesting points and here is where to see some examples.
On valuations first.
Linn paid roughly about 17,000/acre to enter the Willisoton basin/Bakken in 2011 which seemed about the highest price at that time....well, recently Oasis just paid about $40,000/acre.
Oasis & Continental are some of Linn's operating partners in ND.
Statoil paid about $8,000/acre to buy BEXP a while back.
After Linn entered North Dakota and after BEXP was bought, Continental resources discovered & published about the multiple benches of the Three forks. Then the USGS updated their 2008 recoverable reserve estimate to now also include the Three Forks.
And then Continental also published their own Williston basin oil-in-place estimate of 903 Billion barrels which exceeded the 2000 estimate by Leigh Price of 503 billion barrels,
Continental also had a recoverable reserve estimate first of up to 24 billion barrels of oil and later at up to 45 Billion barrels recoverable oil.............and they used a 5% recovery rate.
Continental shows a short video from their webpage about Ecopads and walking rigs which is very interesting.
They have info on the advances as you mention in their presentation and the cost savings with their 14-well pad.
This was posted and will also be of interest to see what may be on the way for the Bakken area:
"Forty-Eight Wells Per Spacing Unit -- Lynn Helms
Yesterday it was noted that Lynn Helms had said that in the better Bakken, it might take 48 wells per spacing unit. I had not seen the source for that statement.
Another reader was gracious enough to provide the link (see below). This is an incredible briefing provided back in January, 2013. I am amazed that the regional print media did not pick up on this. If any of them did, I missed it. Forty-eight wells/spacing unit in the better Bakken is simply staggering, and when this does not get a headline in the regional media it speaks volumes about local coverage of the Bakken."
They have lots of puts shown on the hedging info and......not adding more puts for now is very different than "would no longer use puts" as you posted...
.....which might have a different result in a rising price environment, like now, since the price of gas is over a buck higher than the 2014 average gas hedge price posted on that slide [#27].....and 41% of the gas will be of some added benefit to Linn in 2014.
......and if you do ever look at slide # 27 then you will also see the two different types of collars that were added for the oil hedges also.
So, thank you for reminding us about the changes concerning the puts.
It seems that you may need to study up a bit on Slide #27 in the last Linn presentation with specific attention to the percentage of PUTS which are now at 41% for 2014 natural gas and then also hear the detailed explanation by Mr. Rockov from his presentation at Enercom.
so you have a good fundamental understanding about just how Linn hedges "differently" and how that part of the hedging derivative mix (the puts) allows for some added profits when gas goes above the average hedge prices [see Slide #27 in the most recent Linn presentation].
you will have a pretty good understanding to then try to do a back-of-the-envelope calculation by estimating the percentage of current production that is gas and using the charts on slide #27 to help to clarify what to expect.....(the same Linn presentation has the production numbers).
Please post the numbers you use in the back-of-the-envelope calculation so we can check what you find.
then we can repeat the back-of-the-envelope process for the oil (16% puts for 2014) and try to see what that looks like too.
We all wait with anticipation to see your numbers.
I do not know what this means:
"my thoughts are were is the available cash flow going in light of bry but more important in light of all the recent price increases"
and I doubt anyone else knows....and I assume it was intentionally written that way.
what is this?
"sand at chk they have been concentrating on ngl s I don't see why linn isn't following a similar focus"
What makes you think whatever that comment is trying to say?
Is that comment some kind of soft-bash-vague- implied dig of some kind?
What specifically are you talking about?
this part is incorrect:
"They stopped using puts several quarters ago"
You really should go take a quick look at slide #27 in the latest Linn presentation to see exactly what the derivative mix is and notice the percentages and the hedge prices for the all of hedges for 2014 & the other years.
Norris, do you know (or anyone else know) about what the new percentage for Natural Gas Liquids is ....of Linn's total production.
...... back in 2011 it was at 17% but that was before some big changes like the BRY deal and the two BP deals (Hugoton & Jonah) and a few other acquisitions.
I have no idea what it is now or how much it would mean to potential added profit as NGL prices go higher since the NGLs are not hedged.
............has anyone recently asked IR what the percentage of Linn's total production is made of NGLs?
coochy, It does matter and here is why it matters.
on your comment:
"I don't think it matters. The sold forward nearly 100% of scheduled production"
Mr. Rocov explained how Linn hedges differently thn most and how the puts protect against downside price moves and still allow for some added profits as prices head higher. You can hear his explanation of it in an older presentation. I think it may have been at Enercom and in 2011 0r 2012.
If you look at slide #27 in the latest Linn presentation, you will notice that 41% of the gas hedges are made of puts.......and the rest are swaps...
So, this comment: "The sold forward nearly 100% would probably be more correct if it read: sold forward 59% and not "nearly 100%" because the part of the hedges that are puts [41% for 2014 natural gas....see slide #27 ] allows for added profits on that part of the hedfes as the price goes up above the hedge prices.
And....here is Texas:
2013 Texas gas production
#18 LINN OPERATING, INC. 77,707,912 MCF
It looks like Linn moved up in rank from #25 in rank for gas production in 2012 in Texas, to #18 in rank for 2013.
It looks like Linn moved from the #3 spot in Kansas natural gas production for 2012 to the #1 spot in Kansas natural gas production in 2013.
How about Wyoming?
Wyoming Oil & Gas Commission
LINN OPERATING INC
Linn’s Gas production in Wyoming
Monthly Jan-Dec 2013
Wyoming posts the gas production monthly so if you want a total for comparison, then just add it up for the whole year (2013)
This is pretty interesting....only the top 20 of the Top 50 Gas Producers in 2013..... In Kansas
The table did not copy well but you can see the order and the numbers
for Linn in Kansas
Rank Operator .......Production (MCF).....% of total
1 Linn Operating, Inc.
2 EXXONMOBIL Oil Corp
3 OXY USA Inc.
4 SandRidge Exploration and Production LLC
5 Anadarko Petroleum Corporation
6 PostRock Midcontinent Production LLC
7 Pioneer Natural Resources USA, Inc.
8 BP America Production Company
9 XTO Energy Inc.
10 Cimarex Energy Co.
11 Woolsey Operating Company, LLC
12 Dart Cherokee Basin Operating Co., LLC
13 Chesapeake Operating, Inc.
14 Merit Energy Company, LLC
15 Layne Energy Operating, LLC
16 Chieftain Oil Co., Inc.
17 Shell Gulf of Mexico Inc.
18 Osborn Heirs Company, LTD
19 Oil Producers Inc. of Kansas
20 Val Energy, Inc.
one more point....
I had copied this direct from the Linn website for you.
Here it is again:
""LINN Energy is not a MLP or a corporation, but a publicly traded limited liability company with partnership tax status. The significant differences between LINN Energy, a MLP, and a corporation are illustrated in the chart below."
And you then ended your post with this:
" AN LLC is completely different animal but line calls itself an MLP "
"but line calls itself an MLP "
Maybe that is how you think about LINE .......but after they stated just the opposite on the LINE webpage?
how did you miss this part:
"LINN Energy is not a MLP or a corporation?"
I do not know what you think that I referred to but this is what you and ronharv should re-read:
LINN Energy’s primary business objective is to provide stability and growth of distributions for the long-term benefit of our unitholders. The company’s business strategy is comprised of the following key elements.
Grow Through Acquisitions of Long-Life,
High-Quality U.S. Assets
LINN Energy's acquisition program focuses on U.S. oil and natural gas basins that provide significant opportunities for future growth and consolidation. We target assets that are financially accretive and provide long-life, high-quality production with relatively predictable decline curves and low-risk development opportunities. We evaluate acquisitions based on decline profile, reserve life, operational efficiency, field cash flow and development costs.
Organically Grow Reserves and Production
LINN Energy maintains a large inventory of drilling and optimization projects to achieve organic growth through its capital program. We implement drilling programs and optimization projects intended to not only replace production, but also grow production and reserves. We focus on low-risk, repeatable drilling opportunities to maintain and/or grow cash flow. Many of the wells are completed in multiple producing zones with commingled production and long economic lives. The number, types and locations of wells varies, depending on our capital budget, well costs, anticipated production and estimated recoverable reserves.
Reduce Cash Flow Volatility through Hedging
LINN Energy has attractive commodity hedge positions in place to provide long-term cash-flow predictability to pay distributions and manage its business. We hedge a significant portion of our forecasted production to reduce exposure to fluctuations in the prices of oil and natural gas. By removing a significant portion of the price volatility associated with future production, we expect to mitigate the possible effects of potential declini
ops, that was last year....BUT if you notice this part of that news release:
" The recommended increase is anticipated to take effect in the quarter immediately following the closing of the transaction, which is estimated to occur on or before June 30, 2013.
I saw NOTHING anywhere that indicates that is not still their intention..
.........so if you did....please feel free to post the info...[word for word]....with the date of the news so we can actually check to see..
......or is it just more that you think this or that, or that was last year ....or
......I wonder if they might do something else,
.... or how much will they adjust for the 1.68X instead of the 1.25X, ...on & on, etc
....so why specifically do you think they will do something different than what they clearly stated last Feb?
This is what they said:
" The recommended increase is anticipated to take effect in the quarter immediately following the closing of the transaction, which is estimated to occur on or before June 30, 2013."
See the news release of Feb. 21, 2013 for the entire text.
Norris, silly me.
they mentioned NGLs only?
Wow, and here I thought that the key was the next C-corp that Linn would buy using LNCO …and that would be the “hidden” upside catalyst.
From a recent MF article:
“Results from the 12-well program continue to meet the company's expectations, with 12 Polar area wells posting a 120-day average production rate of 618 BOE/d and 12 Smokey area wells yielding 60-day average production of 627 BOE/d.
The fact that these results are in line with production figures for previously drilled wells in the Polar and Smokey areas is encouraging because it suggests that the increased well density has not resulted in lower production, confirming results from other operators' pilot programs. For instance, Whiting Petroleum's density pilot programs in its Hidden Bench, Pronghorn, and Sanish areas also showed how companies can materially boost recovery efficiency despite drilling in higher densities.
“Whiting: A Revolution in Drilling?”
We won't pretend to know all the ins and outs of it, but basically the company's new cemented liner, with so-called plug-and-perf, has far more perforations, and that's resulting in jaw-dropping production growth.
In the firm's conference call last week, for instance, Whiting said that about a dozen test wells, at various locations, produced 40% to 60% more output than using previous completion methods.”
since Whiting is already one of the operating partners of Linn in ND (in Sanish area) for their non-operated Bakken/Three Forks production maybe Linn will apply some of the new Whiting completion methods to some other areas also?
Maybe it will be the Oklahoma Hogshooters which averaged 3,800 boe/d IP rates, which does look pretty good (for example) when compared to some Bakken wells.
cruzin is confused again?
I have no interest in pumping......and I could care less if you buy, sell or watch or don't.
But you seem to enjoy posting incorrect info and follow it by mere adhominum gibberish....and then followed by go read and article but refuse to post the part you seem concerned about or your repeated direction to "go take a nap"....the usual cruzin-post.
The real issues are not a possible slowdown in production last December.
That is just a distraction at best.
In addition to organic growth,...what/who & how much (in 2014) that Linn will buy next using Linco to acquire more c-corps is the key.
If you want to discuss what will probably be the key factor next for LINE then you should re-read the revised comments of Mr. Amos from Feb, 2013.
Do you think that you can find it here on this board or do you need some help in searching?
This was posted last year:
"it looks like Mr. Amoss of Weil updated his thoughts on 2/22/13
From his post at Weil:
"LINN Energy $37.68 (SP) / LinnCo $39.00 (SP): Takeaways from Berry Transaction Announcement / David Amoss (504) 582-2638
Quick Take: After yesterday’s earnings release and announcement that LINE has purchased BRY in an all-stock transaction, we are reviewing our thoughts on the deal and what is next for LINE. First and foremost, we think BRY’s assets are a good fit with LINE’s existing portfolio, bringing in the three-legged stool of the Permian, Uinta, and California.
We have no doubt that LINE will look to get back into the corporate M&A game as quickly as possible, but with the integration of BRY looming, we think the Company could choose to focus on asset deals in the near-term.
Once BRY is integrated, LINE could look for an even bigger corporate transaction in the $5 billion to $10 billion range, with a couple of obvious targets in the Mid Cap E&P space.