LINN Will Lose More than $1 Billion in 2015 | 4Q14 Results, Guidance, and 10-K Recap

02/20/15 01:55PM EST

Link to Report: LINN Will Lose More than $1 Billion in 2015 | 4Q14 Results, Guidance, and 10-K Recap

Summary Bullets

  • We expect LINN Energy’s oil and gas business to lose $(1.2)B and generate no CFFO in 2015.  EBITDAX = interest expense.  The hedge book will generate $1.0B of “cash flow,” which is what will fund $600MM of CapEx and $417MM of distributions in 2015.
  • LINE and LNCO are worth $0.  We value LINN between $4.7B - $6.5B.  Its net debt is $10.3B.  
  • “DrillCo” and “AcquisitionCo” are unlikely to solve any of LINN’s problems.
  • We believe true maintenance CapEx to be ~$1.0B - $1.1B per year.  LINN will only spend $600MM in 2015.
  • A capital efficiency and reserve replacement analysis is included in the note.
  • A detailed review of the 10-K is included in the note.

Kevin Kaiser

Managing Director

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