Here we go again. Listen up folks, January 15, 2014 press release from LinnCo announcing the estimated tax characteristics of the 2013 cash distribution: 100% nondividend distribution (in other words, a return of capital, so your brokerage reduces your basis by that amount.) Now, my brokerage misreported it as a regular dividend up until the April corrected 1099. Word to the wise, do not file early, wait for the final corrected 1099. It will likely show the entire distribution characterized the same as last year as a return of capital [ROC]. Note: it is pretty easy to understand how energy companies that have no taxable earnings because of depletion, amortization, depreciation and such; when they pay out distributions it is as a ROC.
Now let me see some 'thumbs up' from those who get it.
If you look at 'earnings' yes, the payout ratio is high, but if you look at funds flow it is not. Many energy companies cut back on capital spending when oil drops. ERF has a choice, cut capital spending or cut the div. Much depends on how long lived the existing producing wells are doing. Those numbers are difficult to see.
Allowing export of 'refined' oil is a game changer for pricing in the USA. We'll see 1,000,000 bod exported by end of 2015 from the USA. This bodes well for pricing in 2015, and competes with Nigerian oil for EU contracts. Hang on to your shares for the ride up.
The host mentioned an outlying prediction @$14 and Jim Cramer shook his head in disbelief, "Then we all go bust" he said. So, no he wasn't 'saying' we get $14 oil. They were debating if this oil event is demand or supply driven. They seem to think supply driven (which isn't as bad as a demand problem).
Good time to buy. Oil up nice Friday afternoon, like the money guys know something will happen this weekend. Reminds me of the days when investors were too scared NOT to be in oil. Odd things can happen over weekends.
I've seen some 'related' companies cut dividends because they were paying out 50%+ of their cash flow in divi's. This oil blood in the streets cycle has them in defense mode. ERF has held the line by paying out only 26% of its cash flow in divi so I think ERF holds up better then those others in this down cycle.
The announcement of a $195,000,000 capital spending reduction for 2015 pretty much covers the 2015 dividend, so it appears ERF wants to hold the divi steady IMHO.
Yes, LINE/LNCO up 10% at noon today. They pretty much affirmed an 11% yield for the year, now back in the normal range. It solidifies their position, so buyers are bidding it up.
PGH can still wait. But today's LINE/LNCO action and response looks good for the sector.
No, I'm Spartacus, with an MBA in finance from a top business school.
Are we done laughing yet?
The numbers mean whatever the beholder thinks they mean because PGH had a 858 million non-cash impairment write-off. No joke, because of the huge fall from the price of oil. Meanwhile, investors look at this company's CASH FLOW, which in Q4 was good. So up 2½% cheers this morning.
Glad you pointed out the same thing I saw. Not a well thought out piece. If it was written with the ending first, the headline would have been opposite.
63% hedged for 2015 @$83 . SAGD starts pumping oil soon costing ~$40. The math looks solid for sustained distribution. The yield here is crazy sounding, only because the pps selling is overdone. Don't cry when this pops and you miss the party boat. Yes, it 'feels' bad down here but listen to the facts not the feelings.
Cram recently said he "doesn't think oil will go below $68". Later he'll say he meant $58. Fastest talking con man in the world.
Yes and No. Yes they cannot 'arbitrarily determine tax treatment. But no, as a (holding) 'C' corporation LNCO passes on the tax treatment it received from LINE to LNCO shareholders. LNCO does the tax reporting that LINE holders must do and LNCO holders get a 1099 that reports the final treatment result.
A look at the one year chart shows a double bottom. This thing is going back to $4 a share. From there it could easily tread water for some time until oil demand grows up again or another catalyst moves it off the $4 plateau. Thoughts?
USO news has article about February being the low then the rally to June, traders have started getting ahead of that trade + short squeeze