I guess they decided to maximize value on the Marcellus shale assets while the going is hot as the company is selling them to XTO Energy for $600 million. Linn says it will use the money to reduce debt and should have no impact on distributable cash flow. XTO is bidding 64.50 x 65.95 right now...a few trades at 64.75. Linn Energy is 23.65 x 24.53. No trades yet. Judging by the chart you think somebody knew something?
I'm not so sure that this will be viewed in a good light but we'll see. Did they sell because they had to or was it a strategic decision that it was better to cut down debt and not issue any new equity as outlined in previous conference calls. Analyst day on Thursday.
E V Partners (EVEP) announced a smaller 18 million dollar deal as they are purchasing some wells in Texas.
No other news and no upgrades or downgrades so far. The MLP index close up over 1 point yesterday and continues to show relative outperformance to the overall market. I would expect that trend to continue. Need to clear 290 short term.
joseph cioffi's Source Page - Associated Content
4 comments:
explains the huge call volume at the 25 strike a few weeks ago. monetizing $5-6 per unit of NAV whie reducing capex, no change to distributions should leap us past 25 soon.
I agree. I think this will further demonstrate to the street that LINN is serious about not carrying too much debt, having dependable revenue streams, growing the distribution, etc.
Good stuff all around. I think a win-win for both cos.
i think this is a net positive since they no longer run the risk of cutting the distribution as it was getting somewhat tight in te eyes of a few. They basically proved much of the value today vs. spending money on probable and possible in hopes of getting provable flows. who knows what street will think and stock has run up past few days but makes me more comfortable owning the units
the old adage still holds, "a bird in the hand is worth....." I'm happy to sit with a 14% yielding investment which is now safer since they reduced their debt by 40% to a D/E of about 0.4. Guess they figured the cost to develope the Ma.. Shale
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