LINN Arm Raises $1.1B in IPO


Independent oil and natural gas firm LINN Energy LLC (LINE) recently set up a new company – LinnCo, LLC (LNCO) – that raised $1.1 billion in an initial public offering (:IPO).

LinnCo will have no operations or assets on its own but will acquire 13.2% shares in LINN Energy. LINN Energy, on the other hand, will use the proceeds for general corporate purposes, such as funding acquisition strategy, repaying debt and meeting the expenses related to the offering.

Headquartered in Houston, Texas, LINN Energy is involved in the acquisition and development of oil and gas properties that spans across Mid-Continent, Granite Wash, Permian Basin, Hugoton Basin, Rockies, Michigan, California and East Texas.

As of December 31, 2011, the company enjoyed proved reserves of 4.3 trillion cubic feet of oil equivalent and operated nearly 15,000 gross productive oil and natural gas wells.
In last week of June, 2012, LINN Energy entered into an agreement with British energy behemoth BP Plc (BP) to acquire its Jonah field properties for a cash payment of $1 billion.

The assets include more than 12,500 acres in the Jonah field – located in the Green River Basin of southwest Wyoming – and comprise approximately 750 producing wells and hold 73% gas, 23% natural gas liquids and 4% oil. The acreage has 730 billion cubic feet equivalent of proven natural gas reserves and the potential reserves of the assets could grow to 1.2 trillion of cubic feet equivalent.

LINN Energy will release its third-quarter 2012 results on October 25, Thursday, before the opening bell. The Zacks Consensus Estimate for earnings in the third quarter is 27 cents per share, on revenue of $550 million.

LINN Energy currently has a Zacks #3 Rank, which implies a short-term Hold rating for a period of one to three months.

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