Linn Energy LLC (LINE): An updated Net Income & Cash Flow Forecast model has been posted under the MLP Tab.
Adjusted earnings per unit should be in the $0.20-$0.25 range for the 4th quarter and cash flow per unit from operations should be in the $1.40 to $1.50 range for the 4th quarter. Cash distributions of $0.725/quarter look safe to me.
At today's unit price the annual yield is over 12% (mostly tax deferred BTW)
LINE has a high percentage of their production hedged at very good prices, so they don't have much near-term exposure to oil prices.
My Fair Value Estimate is $32.15/unit, compared to First Call's Price Target of $31.33
Raymond James current price target is $33.00
Credit Suisse current price target is $28.00
NOTE: Sorry it took so long to get to this one. In addition to dealing with "Hackers", my top priority is the Sweet 16.
LINE for High Yield + Growth
LINE for High Yield + Growth
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: LINE for High Yield + Growth
>>>>>>>>Adjusted earnings per unit should be in the $0.20-$0.25 range for the 4th quarter and cash flow per unit from operations should be in the $1.40 to $1.50 range for the 4th quarter.<<<<<<
Dan: with regards to MLPs, particularly the upstream MLPs, when it comes to sustainability of the distribution, which figure should investors pay more attention to? adjusted earnings per unit, or cash flow per unit from operations? I thought it was cash flow/unit ... but I'm still seeing some analyst ratings being adjusted based on MLP earnings/unit.
Dan: with regards to MLPs, particularly the upstream MLPs, when it comes to sustainability of the distribution, which figure should investors pay more attention to? adjusted earnings per unit, or cash flow per unit from operations? I thought it was cash flow/unit ... but I'm still seeing some analyst ratings being adjusted based on MLP earnings/unit.
Re: LINE for High Yield + Growth
Cash flow pay the dividends, not earnings.
Earning per share for upstream MLPs include all of the same stupid accounting rules that the C-Corps have to live by, like Mark-to-Market adjustments on hedges (which are HUGE for MLPs) and impairment adjustments.
Actually, the key number is "Distributable Cash Flow" (DCF) for MLPs. In a nut shell, DCF = Cash Flow from Operations less Maintenance Capital.
Most of the MLPs show DCF in the quarterly press release. It is required in the SEC quarterly filing.
There is nothing stopping an MLP from making distributions above DCF, but it is a practice that cannot go on forever.
Earning per share for upstream MLPs include all of the same stupid accounting rules that the C-Corps have to live by, like Mark-to-Market adjustments on hedges (which are HUGE for MLPs) and impairment adjustments.
Actually, the key number is "Distributable Cash Flow" (DCF) for MLPs. In a nut shell, DCF = Cash Flow from Operations less Maintenance Capital.
Most of the MLPs show DCF in the quarterly press release. It is required in the SEC quarterly filing.
There is nothing stopping an MLP from making distributions above DCF, but it is a practice that cannot go on forever.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: LINE for High Yield + Growth
Given the thrashing most everything has taken and the collapse of spot CL, where do you think LINE is on maintaining their distributions?
My timing couldn't have been better, I bought this just before thanksgiving and have been severely punished for it.
My timing couldn't have been better, I bought this just before thanksgiving and have been severely punished for it.
Re: LINE for High Yield + Growth
same question re vnr 
Re: LINE for High Yield + Growth
Here is what Raymond James had to say in their report dated December 1, 2014.
"As shown in the following table, assuming no future acquisitions and no distribution increases and the Raymond James 2015 forecasted natural gas price of $3.65/MMBtu, our top picks in the Upstream MLP space, EV Energy Partners, Memorial Production Partners, and LinnCo all generate positive distribution coverage down to $60/bbl."
LINE has such a high percentage of their production hedged at prices well above the current strip, that low oil price have very little impact on their DCF.
Send me an e-mail (dmsteffens@comcast.net) and I will send you a copy of the RJ report. VNR and BBEP are also listed in the report.
Here is something to remember: Production taxes are paid on actual prices, not on the hedge prices. The hedge contracts are derivatives tied to the index price. Actual production is sold at market prices and cash settlements on the hedge contracts are paid based on the index. Also keep in mind that fuel costs are a big part of lease operating expenses. LOE is dropping like a rock.
"As shown in the following table, assuming no future acquisitions and no distribution increases and the Raymond James 2015 forecasted natural gas price of $3.65/MMBtu, our top picks in the Upstream MLP space, EV Energy Partners, Memorial Production Partners, and LinnCo all generate positive distribution coverage down to $60/bbl."
LINE has such a high percentage of their production hedged at prices well above the current strip, that low oil price have very little impact on their DCF.
Send me an e-mail (dmsteffens@comcast.net) and I will send you a copy of the RJ report. VNR and BBEP are also listed in the report.
Here is something to remember: Production taxes are paid on actual prices, not on the hedge prices. The hedge contracts are derivatives tied to the index price. Actual production is sold at market prices and cash settlements on the hedge contracts are paid based on the index. Also keep in mind that fuel costs are a big part of lease operating expenses. LOE is dropping like a rock.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group