Houston-based Linn Energy's acquisition of Berry Petroleum will boost Linn's presence in lucrative liquids drilling.
Analysts are greeting the news that Houston-based Linn Energy LLC is buying Berry Petroleum Co. (NYSE: BRY) with confidence.
The company said Thursday it intends to acquire the Denver-based company for $2.5 billion in stock, boosting its exposure to lucrative liquids and raising production by 30 percent.
Analysts at Raymond James & Associates in Houston reiterated their strong buy rating on Linn?s stock and noted that the company?s business model of buying mature assets and hedging out the risk exposure captures a significant cash margin to return to its shareholders as distributions.
The analysts said that Berry's long-life, low-decline reserves are an ideal fit for Linn (NYSE: LINE), and the companies have significant overlap in geographic areas such as California, the Permian Basin, East Texas and the Rockies.
Analysts at Tudor Pickering Holt & Co. in Houston agreed the buy makes sense given the desire of a master limited partnership to own long-loved, shallow-decline assets.
Linn's Q4 earnings reported Thursday of 41 cents per unit beat Raymond James? forecast of 18 cents and the consensus 39 cents.
Linn reported a net loss of $187 million for the fourth quarter; excluding special items, with adjusted net income of $94 million, compared to the year-earlier adjusted net income of $89 million.
Raymond James said better-than-expected price realizations and lower-than-expected general and administrative costs were partially offset by lower-than-expected production. Also, the company has drilled its first Hogshooter well in Mayfield, Okla., which is producing at a rate of 5,406 barrels of oil equivalent each day, 73 percent of it being liquids.
Deon Daugherty covers energy and law for the Houston Business Journal.
sag aftra merger dj am bully bohemian rhapsody bohemian rhapsody spike lee carson daly
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.