LINN Energy LLC (LINE)
Posted: Tue Oct 29, 2013 3:11 pm
Linn Energy LLC (LINE): An updated Net Income & Cash Flow Forecast model has been posted under the MLP Tab.
My Fair Value Estimate is now $40.00/unit (compares to First Call's Target Price of $33.08/unit).
If LINE does close on the acquisition of BRY my Fair Value Estimate will go up. Regardless of how the merger works out, LINE has more than enough cash flow to cover their cash distributions. Virtually all of their natural gas and crude oil production for the next two years is hedged at over $5.10/mcf and $90/bbl. [A lot of their oil is hedged with PUTS, so they get today's higher price on that oil.]
LINE is on-track to end 2013 with year-over-year production growth over 19%. My forecast for 2014 assumes 12% production growth. If they do merge with BRY, 2014 production will jump by more than 40%.
LINE remains one of my Top Picks in our High Yield Income Portfolio.
Take a look at my forecast and focus on Cash Flow per Unit (Row 48). Forget all the noise about their accounting for derivatives. That is all non-cash BS anyway. Cash flow is what pays the bills and keeps those dividends coming.
My Fair Value Estimate is now $40.00/unit (compares to First Call's Target Price of $33.08/unit).
If LINE does close on the acquisition of BRY my Fair Value Estimate will go up. Regardless of how the merger works out, LINE has more than enough cash flow to cover their cash distributions. Virtually all of their natural gas and crude oil production for the next two years is hedged at over $5.10/mcf and $90/bbl. [A lot of their oil is hedged with PUTS, so they get today's higher price on that oil.]
LINE is on-track to end 2013 with year-over-year production growth over 19%. My forecast for 2014 assumes 12% production growth. If they do merge with BRY, 2014 production will jump by more than 40%.
LINE remains one of my Top Picks in our High Yield Income Portfolio.
Take a look at my forecast and focus on Cash Flow per Unit (Row 48). Forget all the noise about their accounting for derivatives. That is all non-cash BS anyway. Cash flow is what pays the bills and keeps those dividends coming.