Energy Prospectus

Ominous news for Line & XXI. Line's CFO is being replaced as of this AM. (kf)


<<Some oil companies may be just weeks away from bankruptcy, analyst says
Aug 24 2015, 18:41 ET | By: Carl Surran, SA News Editor
The plunge in oil prices may lead to some oil companies going out of business within a few weeks, according to Energy Aspects senior oil analyst Amrita Sen, who points to Linn Energy ([LINE]], LNCO) and Energy XXI (NASDAQ:EXXI) as bankruptcy candidates after exhausting more than 75% of the credit available to them.

Several companies likely will see their borrowing bases reduced by more than 50%, Sen says, naming Midstates Petroleum (NYSE:MPO), Resolute Energy (NYSE:REN), W&T Offshore (NYSE:WTI), Breitburn Energy (NASDAQ:BBEP) and Comstock Resources (NYSE:CRK) as possibilities."The amount of money available to these U.S. producers to borrow is half, less than half in some cases, compared to a year ago," Sen writes, which "makes it very, very difficult for them to continue investing, continue drilling," but she also predicts that supplies will tighten by the end of next year, and prices could easily more than double from current levels.>>

IMO the inclusion of CRK in the list discredits the writer.

Bob

Here's a more detailed account of the Linn CFOs sins and virtues:

<<http://www.fool.com/investing/general/2 ... lnk0000001

CRK: At June 30th, Comstock was nowhere close to going bankrupt and they are having great success in their Haynesville drilling program. CRK will be ramping up production into year-end. Take a look at the presentation on their website and you will see that CRK will be in "good" shape if natural gas moves over $3.00 and they will be in "great" shape if gas moves over $4.00. I think we could see much higher gas prices this winter.

Keep in mind that people that write for Seeking Alpha get paid by the click and no one at Seeking Alpha vets the articles. This is why Yahoo Finance dropped them. There are some good SA writers, but there are also many hacks.

BBEP is now generating free cash flow and using it to pay down debt. Plus, they have $500 million in liquidity. Today, I see zero risk of BBEP needing to seek bankruptcy protection. If gas prices go up like I believe they will, BBEP should be in position to raise their distributions to unit holders early in 2016.

When you see articles like this. At least take the time to scan the most recent 10-Q.