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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: carl a. mehr who wrote (96806)	2/14/2008 3:43:05 PM
From: GVTucker	Read Replies (1) \| Respond to of 206325

Pretty clear that another large shareholder is bailing.

To: carl a. mehr who wrote (96806)	2/14/2008 7:15:31 PM
From: Ed Ajootian	Read Replies (1) \| Respond to of 206325

Carl, Linn Energy (LINE) -- Looks like I was off a few days in determining when the last tranche of PP shares became free-trading, I now understand that that occurred today. The shares were bought at prices well above the current quote so you would think that the PP investors would show a bit more patience to see if they can recoup more of their investment, but that was not evident today. Regarding GVTucker's point, Linn has distributed for 4Q what appears to be, if they met the midpoint of guidance, a few pennies more per share than they generated in distributable cash flow. Thus it could be accurate to say that, using figures for management guidance, they borrowed to make the latest distribution. This I totally agree is a warning sign, indicating that, unless the future is different from what happened in 4Q, they would always have to borrow to maintain this level of distributions, which would make them unsustainable. Thankfully, upon a review of the facts, it is clear that things are very different going forward. The major difference is an acquisition that just closed a few weeks ago, which, per management, will be accretive to distributable cash flow to the tune of about $.15/share. Another difference, starting in May, is the fact that an obligation under a volumetric production payment that they assumed in an earlier acquisition will expire at the end of April, giving them about 16 mmcfd of additional production. Also, given how high oil prices were last quarter I believe that there is a good chance that the actual amount of distributable cash flow generated for that quarter exceeded the midpoint of management guidance. Although much of Linn's oil production was hedged for 4Q, a lot of the hedges were in the form of puts, which allows Linn to benefit from higher oil prices. I don't think many folks thought that so many PP investors would show so little patience with this stock. This has created a tremendous buying opportunity IMO.