Stock Update (NASDAQ:LINE): Linn Energy LLC Completes Borrowing Base Redetermination

Linn Energy LLC (NASDAQ:LINE) announced today that it has completed its Fall 2015 borrowing base redetermination and entered into key amendments which provide additional flexibility in the current market environment.  Following the redetermination, LINN’s maximum borrowing availability under its credit facility has been reduced to $3.6 billion and the borrowing base under the credit facility for Berry Petroleum Company, LLC (“Berry”) has been reduced to $900 million, including $250 million of restricted cash previously posted as collateral with Berry’s lenders.  The Company’s lenders have also approved a potential combination of the LINN and Berry credit facilities under certain conditions, subject to a combined borrowing base of $4.05 billion.  LINN currently has undrawn capacity of approximately $790 million, assuming borrowings outstanding as of September 30, 2015.

As part of the redetermination, LINN and Berry each entered into an amendment to their respective credit facilities.  Among other items, the amendments include the ability to incur junior lien indebtedness, a reduction in the minimum interest coverage ratio and increased ability for LINN to divest assets which do not contribute to its borrowing base.  Under the terms of the amendments, LINN and Berry may incur up to $4 billion and $500 million, respectively, of junior lien indebtedness, in each case subject to borrowing base reductions in certain circumstances.  In addition, the Company’s minimum interest coverage ratio has been reduced from 2.5x to 2.0x through December 31, 2016, increasing to 2.25x through June 30, 2017, and then returning to 2.5x on July 1, 2017.

Third Quarter 2015 Earnings Conference Call

Management will host a conference call on Thursday, November 5, 2015, at 10 a.m. Central (11 a.m. Eastern) to discuss the Company’s third quarter 2015 results.  Prepared remarks by Mark E. Ellis, Chairman, President and Chief Executive Officer, and David B. Rottino, Executive Vice President and Chief Financial Officer, will be followed by a question and answer session. (Original Source)

Shares of Linn Energy are down 2.55% to $2.68 in after-hours trading. LINE has a 1-year high of $27.00 and a 1-year low of $2.01. The stock’s 50-day moving average is $3.11 and its 200-day moving average is $6.99.

On the ratings front, Linn Energy has been the subject of a number of recent research reports. In a report issued on October 12, FBR analyst Chad Mabry downgraded LINE to Sell, with a price target of $2, which represents a potential downside of 27.3% from where the stock is currently trading. Separately, on October 6, Stifel Nicolaus’ Brian Brungardt downgraded the stock to Hold .

According to, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Chad Mabry and Brian Brungardt have a total average return of -34.9% and -61.5% respectively. Mabry has a success rate of 21.7% and is ranked #3790 out of 3795 analysts, while Brungardt has a success rate of 0.0% and is ranked #3785.

The street is mostly Neutral on LINE stock. Out of 7 analysts who cover the stock, 4 suggest a Hold rating and 3 recommend to Sell the stock. The 12-month average price target assigned to the stock is $3.88, which implies an upside of 41% from current levels.

Linn Energy LLC is an independent oil and natural gas company. The Company’s properties are located in United States in Rockies, Hugoton Basin, California, East Texas and north Louisiana, Mid-Continent, Permian Basin, Michigan/Illinois and South Texas.

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