Linn Energy exhausts credit, considers ‘strategic alternatives’

Linn Energy LLC, Houston, said on Feb. 4 that it’s exploring “strategic and financial alternatives” to improve the firm’s capital structure and long-term outlook in the midst of the prolonged crude oil price slump.

The company recently borrowed the remaining undrawn amount from its credit facility, using $919 million for general corporate purposes.

Total borrowings under the facility now total $3.6 billion. The credit facility of Berry Petroleum Co. LLC, acquired by Linn in 2013 for $4.3 billion (OGJ Online, Dec. 17, 2013), remains fully utilized at $900 million, including $250 million of restricted cash posted as collateral.

“By proactively undertaking this process now with the help of our advisors, we believe we can implement a comprehensive solution that will position Linn for long-term success," said Mark E. Ellis, Linn Energy chairman, president, and chief executive officer.

“We currently have adequate resources to continue the efficient operations of our assets with the support of all our vendors, suppliers, and partners while we work through these strategic alternatives,” he affirmed.

In Linn’s most recent quarterly update, the firm posted a third-quarter 2015 net loss of $1.6 billion, including a noncash impairment of $2.3 billion primarily driven by lower commodity prices and its estimates of proved reserves.