Houston-based Linn Energy's acquisition of Berry Petroleum will boost Linn's presence in lucrative liquids drilling.
? Editor's note: Linn Energy of Houston has announced the signing of an agreement to buy Denver's Berry Petroleum for $4.3 billion in an all-stock deal. (DBJ report here) Deon Daugherty, energy reporter for the Denver Business Journal's sister newspaper in Hiuston, offers this Texas take on the deal:
Analysts are greeting the news that Houston-based Linn Energy LLC is buying Berry Petroleum Co. (NYSE: BRY) with confidence.
The company said Thursday it intends to acquire the Denver-based company for $2.5 billion in stock, boosting its exposure to lucrative liquids and raising production by 30 percent.
Analysts at Raymond James & Associates in Houston reiterated their strong buy rating on Linn?s stock and noted that the company?s business model of buying mature assets and hedging out the risk exposure captures a significant cash margin to return to its shareholders as distributions.
The analysts said that Berry's long-life, low-decline reserves are an ideal fit for Linn (NYSE: LINE), and the companies have significant overlap in geographic areas such as California, the Permian Basin, East Texas and the Rockies.
> This report continues at the Houston Business Journal. Click here for more.
Deon Daugherty covers energy and law for the Houston Business Journal.
Source: http://feedproxy.google.com/~r/vertical_13/~3/aaqrk9Z5jCs/the-view-from-houston-berry-petroleum.html
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