Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Linn Energy LLC (LINE), LinnCo LLC (LNCO): Is Energy M&A Activity Set to Explode?

Outlook
Looking ahead, we’ll see similar activity centered on shale ventures, with the Utica potentially seeing the most activity. Chesapeake Energy Corporation (NYSE:CHK) has already made it known that it would like to unload around 100,000 of its acres in the Utica. Meanwhile, Devon Energy Corp (NYSE:DVN) is looking to completely exit from the Utica. Devon has already packaged a portion of its Utica acreage, along with four other emerging plays, into a joint venture package with Sinopec Shanghai Petrochemical Co. (ADR) (NYSE:SHI). While these two energy giants are exiting the Utica, it still appears to be a top-tier play; it’s just not the oil-levered play those two were hoping it would become.

While those two are looking to unload assets, other companies like Linn Energy LLC (NASDAQ:LINE) are looking to continue to acquire. The difference here is that LINN is looking for mature, cash-flowing assets while those being offered by Devon Energy Corp (NYSE:DVN) and Chesapeake Energy Corporation (NYSE:CHK) still need to be developed. Linn Energy LLC (NASDAQ:LINE) sees a robust market for mature assets, and on the company’s recent conference call, it noted that while things have been slow, it appears that activity is about to pick up. Specifically, in terms of M&A activity, CEO Mark Ellis point out:

We’ve seen it pick up. Actually on the asset side, I think we mentioned in the last call it kind of got off to a slow start. We still felt like it would be a pretty robust year and that we’re actually starting to see that come to fruition where there is a number of things out there right now, and some pretty sizable things as well, that are in the marketplace, which is encouraging. And as you know, we continue to monitor the C-Corp side and look pretty hard there. So we think it’s a pretty good market.

It would appear that we’ll see a fair amount of M&A activity over the next few months. Not only will foreign buyers probably pick up additional shale assets, but we’ll probably also see a couple of large asset sales or mergers announced as the weather continues to heat up. While it’s useless to speculate as to what deals will get done, it’s still important to watch overall deal flow. However, with so many organic growth opportunities for energy companies these days, we probably won’t see too many headline-making, transformational mergers take place.

The article Is Energy Merger-and-Acquisition Activity Set to Explode? originally appeared on Fool.com is written by Matt DiLallo.

Fool contributor Matt DiLallo owns shares of Linn Energy and LinnCo. The Motley Fool owns shares of Devon Energy and has options on Chesapeake Energy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.