The interesting thing about this particular partnership, however, is its pending purchase of Berry Petroleum Company (NYSE:BRY). This is the first time an exploration focused LP is purchasing a regular corporation.
Linn’s management already describes itself as having created an “acquisition machine,” buying non LPs would widen its options on that front. So increasing gas prices would propel both the top line and augment the partnership’s ability to expand via acquisition.
With a yield of around 8%, it certainly isn’t as low risk as Shell or Exxon, but for more aggressive income investors it might be an interesting income and growth play.
Chesapeake Energy Corporation
Chesapeake Energy Corporation (NYSE:CHK) has been in the news of late for less than desirable reasons, including the ouster of its CEO and co-founder. Part of what led to that event was the company’s aggressive growth in the natural gas space leading up with the precipitous fall in gas prices.
That left the company with a lot of debt and not enough money coming in. The departure of the CEO hasn’t changed that situation at all. So Chesapeake Energy Corporation (NYSE:CHK) is still trying to dig itself out of a bad situation. While higher natural gas prices won’t alleviate the problems, the problems would be much easier to deal with under the $6 gas scenario that Guiness is projecting.
Now is the time
Higher natural gas prices would be welcome relief to some companies and would bolster others with already strong businesses. With the start of a turn higher possible, now may be the time to take a look for opportunities.
Reuben Brewer has no position in any stocks mentioned. The Motley Fool has the following options:Long Jan 2014 $20 Calls on Chesapeake Energy, Long Jan 2014 $30 Calls on Chesapeake Energy, and Short Jan 2014 $15 Puts on Chesapeake Energy.