Linn Energy Fails To Make The Bold Decision

This article was first published by Seeking Alpha on January 20, 2015

By Sarfaraz A. Khan. Research Asst. Mohsin Khan

Several companies and MLPs operating in the energy space, such as Seadrill (NYSE:SDRL), Civeo (NYSE:CVEO) and Breitburn Energy (NASDAQ:BBEP), have been clamping down on their capital budgets as well as dividends and distributions in the wake of plunging oil prices. Linn Energy (NASDAQ:LINE), the biggest oil and gas producer that is structured like a MLP, has also slashed its dividends and capital expenditure plans. The news, however, is hardly surprising as Mr. Market has been warning about the impact of low oil prices on Linn's distributions for the last few months. 

Linn Energy Investors Face Exposure to Deteriorating Oil Prices, Analysts Warn

This article was originally published by TheStreet on Oct. 13. 2014.

By Sarfaraz A. Khan

NEW YORK (TheStreet) -- Linn Energy (LINE) is the largest oil and gas producer that's structured to resemble a master limited partnership, or MLP. But it has meaningful exposure to commodity price risks, unlike a vast majority of other MLPs. With the dropping price of oil, that could be a problem for the stock.

According to a research report emailed to TheStreet by Goldman Sachs spokesperson Leslie Shribman, most MLPs that operate in oil and gas transportation, gathering and processing have a fee-based business as well as hedged positions when there is commodity exposure. Thanks to these two factors, such companies will be insulated against commodity price declines, said the report, prepared by the investment bank's energy analysts. But Linn is not one of those companies.