Linn Energy Future

[drlink]

Dan, do you have any comments about this Seeking Alpha article? Interesting banter also in comments section. http://seekingalpha.com/article/2939646 ... -gas?ifp=0

There have been many "short attacks" against Linn over the years but this author is not one of those. That's not his DNA. So this analysis concerns me. Can you come up with good argument why he may be wrong? Thank you very much!

[dan_s]

I will take a hard look at LINE next week.

LINE and all of the upstream MLPs will be in trouble if oil & gas prices stay down forever, but I do not know anyone one in the industry that believe that will be the case. Global oil production will be on decline in 6-9 months and demand is going up. My view is that oil prices will firm up in Q2 and move steadily higher during the 2nd half of this year. Natural gas prices will stay low all year, but should improve in 2016.

[drlink]

I saw your new forecast for Linn. So you disagree that Linn will need $100 oil after 2015 for current valuation per the Seeking Alpha article? "A long-term commodity price assumption of ~$100+ per barrel for WTI and ~$4.50+ per MMBtu Henry Hub appear to be required to justify the current price.
The units' risk/reward profile appears skewed to the downside. " Where did the author Steve Z make errors in his analysis? Thanks Dan.

[dan_s]

I have way too much on my plate to try and figure out how the Seeking Alpha guys come up with their opinions.

What you must keep in mind is that Seeking Alpha authors get paid by the "hit". Negative articles get more hits. "What gets rewarded, gets done."

Over 70% of Linn's 2015 oil production is hedged at over $94/bbl. Net of interest expense, they will generate close to $1Billion in cash flow from operations this year.

Unless oil stays down for several years, LINE will make it. PLEASE take the time to go to our website and study the LINE forecast model.