Big Upstream LLCs LinnCo and Linn Energy Slash Distributions
By: Tim McPartland,
As we had been warning the upstream MLP’s and LLC’s would cut distributions in the 1st half of 2015 and LinnCo (ticker:LNCO) and Linn Energy (ticker:LINE) have kicked it off with a doozy–almost 60%. These cuts are a positive from our point of view. The companies also announced a reduction in capex of 53%.
It is our opinion that the wise MLP (or LLC) that steps up and cuts their distributions and capex budgets sooner, rather than later, are the wise folks to follow. Given that their share price has already been slammed down by 70% there is not much to be lost here (shares are up this morning). Additionally to burn cash because of ego seems a bit silly.
This company has reasonably good hedges and we are considering these shares a possible buy here.
The companies detailed press release is here.