There's a lot of definitives that get posted on this board. I just like to call them out.

I apologize we are getting off track.

I personally believe Linn is a going concern for at least the next 14-18months.

Jake doesn't.

Linn is hedged through 2016 no matter what happens. This is coming from someone that has actually axctuvely run a hedge book.

Jake posts everything in definitives. In my personal expericence, that means he likely doesn't actually do any of the trading. He's probably an analyst.


*i don't give investment advice. Take the fundamentals and make your own decisions.

Welcome to the board friend

Whose hedge book?

Again, you are talking to someone that has actually had to deal with bank covenants. I've created millions of dollars in credit for companies to satisfy bank covenants.

That's the beauty of actually living it.

PM me

Fine, I will accept that. But, then I'd next point to the fact that you really shouldn't be making any declarative statements in those regards for companies in which you haven't done your due Diligence.

So you're admitting what you've posted up to this point is mostly bs and conjecture.

Nvm. Not over

I usually allow most things to slide but jake tends to over step his bounds on multiple boards.

I personally believe that there is interest In a company like Linn and their future. I'd hazard a guess that there are more than a handful of Aggies working for them.

We'll break it the week of Labor Day.

Yes, if we have already hit 45 up to this point, breaking 40 in turn around season is not a big jump.

I'd love to be wrong but already hit a lunch on calling 45.

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Yes I have. It's actually pretty elementary. Linn is on a 14-18 month timeline that is commodity dependent. They have made great moves to keep liquidity flowing internally and externally.

What jake2011 is espousing is not based in reality only what he read.

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Yes, but I haven't seen Michael Linn in the Houston society pages lately with his $10MM fortune, so I would guess he is not doing so well

I am guessing prelim inventories provide some relief today but let's see.

Back to the thread.......
I'm afraid that we might see sub $40 oil this fall. It all hinges on just how bad the Chinese economy really is. I spent lunch yesterday with a friend who just got back from 3 weeks in China and , as a many times traveler to the Peoples Republic, he was shocked as to how bad things have really become. Behind the scenes and in private ( remember they are still a communist totalitarian nation where the truth is exactly what the politburos tell you it is) his hosts regaled him with stories of cooked books, bankrupt industries, entire cities abandoned, massive fraud and deceit ....not that this was new but the level has become unsustainable and the economy is spinning out of control. This may become the winter of unrest over there driven by a collapsing economy. If Chinese demand continues its dive OR increases we could easily see $30 oil in our future...and THAT my friends means a 1980's magnitude bust !!!

Thanks for getting us back on topic The Original AG 76. I was worried for a minute that the thread would die a slow death over the mandate of FRCs and an old army vs new army pissing match. Should have guessed it'd be the financial guys though!

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Comeby,

I work in the space. Generally its learned on the job. I'm not going to talk specific to LINN but it's fair to say that the Fall Redetermination will be painful for many producers as the Spring was a hall pass imo.

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I do too just on the operator side. The spring bank redetermination was rough and the next ones will be tougher as the high prices roll off the TTM.
There are options for MLP's and having a public entity to be able to drop producing shallow decline assets is not a bad thing. Again, there's more than meets the eye than distributions. Remember there are many private upstream MLP's.

Anyone in here working the midstream m&a side? Deals are still going for outrageous prices. We put in a bid for an asset recently at 17x forward ebitda (before adjusting for our synergies, which were substantial) and we didn't make the 2nd round! There are still about 75 management teams with a private equity check and no assets and those guys are all desperately bidding on every deal under about $300 million making it impossible for anyone to do accretive deals.

Forward EBITDA multiples means nothing in my experience when bidding in this price environment. The last deal we bid on that had a midstream MLP in it went for more than 12x TTM. Unfortunately the winning bidding didn't look at their LOS closely enough to determine that their midstream arm chrarged their own operating arm more than 4x the going rate for compression and gathering. That multiple was not real.

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Thanks for getting us back on topic The Original AG 76. I was worried for a minute that the thread would die a slow death over the mandate of FRCs and an old army vs new army pissing match. Should have guessed it'd be the financial guys though!

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Oops you left out dueling acronyms, I can use more than you... I guess it's the latest version of "mine is bigger than yours".

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Forward EBITDA multiples means nothing in my experience when bidding in this price environment. The last deal we bid on that had a midstream MLP in it went for more than 12x TTM. Unfortunately the winning bidding didn't look at their LOS closely enough to determine that their midstream arm chrarged their own operating arm more than 4x the going rate for compression and gathering. That multiple was not real.

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Lots of truth here. EBITDA is pretty easily manipulable when shopping for debt or equity financing.

Typically for first round bids, you don't have much more to go on than EBITDA. We know the assets we were bidding on as they are adjacent to our assets and we are very familiar. There were no funny games with ebitda. It's just that others out a crazy valuation on what the assets could be instead of bidding on what they are. This has been common the last few years but I was hoping in this environment valuations would come back to earth... Not yet!

quote:

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Back to the thread.......
I'm afraid that we might see sub $40 oil this fall. It all hinges on just how bad the Chinese economy really is. I spent lunch yesterday with a friend who just got back from 3 weeks in China and , as a many times traveler to the Peoples Republic, he was shocked as to how bad things have really become. Behind the scenes and in private ( remember they are still a communist totalitarian nation where the truth is exactly what the politburos tell you it is) his hosts regaled him with stories of cooked books, bankrupt industries, entire cities abandoned, massive fraud and deceit ....not that this was new but the level has become unsustainable and the economy is spinning out of control. This may become the winter of unrest over there driven by a collapsing economy. If Chinese demand continues its dive OR increases we could easily see $30 oil in our future...and THAT my friends means a 1980's magnitude bust !!!

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I spent time in western China back in 2010. I found several things very interesting but two specific things very interesting. 1) The number of concrete high-rises sitting unfinished, looked like a giant Jenga set with the middle blocks pushed out. 2) The number of ornate detailed printed billboards lining the streets advertising western people out in the starry night dressed in elegant gowns and tuxedos in front of 5-star hotels. Then you look around at the slums, horse drawn buggies, smog, general filth and think no way this will ever be here.

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Typically for first round bids, you don't have much more to go on than EBITDA. We know the assets we were bidding on as they are adjacent to our assets and we are very familiar. There were no funny games with ebitda. It's just that others out a crazy valuation on what the assets could be instead of bidding on what they are. This has been common the last few years but I was hoping in this environment valuations would come back to earth... Not yet!

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like APC buying Nuevo for $2.2B?

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Typically for first round bids, you don't have much more to go on than EBITDA. We know the assets we were bidding on as they are adjacent to our assets and we are very familiar. There were no funny games with ebitda. It's just that others out a crazy valuation on what the assets could be instead of bidding on what they are. This has been common the last few years but I was hoping in this environment valuations would come back to earth... Not yet!

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it has been a bit surprising just how aggressive the bids are staying.