Linn Energy LLC (LINE), LinnCo LLC (LNCO): What BreitBurn Energy Partners L.P. (BBEP) Investors Simply Must Know

Again, that value doesn’t account for the company’s prospective properties nor does it account for any future upside in commodity prices. It also doesn’t account for the company’s ability to acquire future reserves at a discount. It is simply the basic value that BreitBurn investors could expect to see if the company’s management did nothing. I’d be very surprised to see that happen.

Here’s what you might not know about BreitBurn’s management team: They are very good at what they do. Not only that, but they tend to see things that most others miss. Just take a look at the following quote from CEO and co-founder Hal Washburn about the time when he and his partner started the company:

[We] had a theory, a thesis, that technology was going to allow us to increase recoveries of oil and gas and we thought that, it would work very well in the United States and that the exodus from United States by all the major oil companies in late 80’s was a mistake. We felt that new technologies would allow us to continue to grow production here in United States and so we built the business on the back of that. We acquired interest in large oil and gas fields, embracing technology to increase the reserves, the production, the cash flow and therefore the value.

That’s something that you simply cannot put a price tag on. However, I’ll go out on a limb here and say that BreitBurn’s worth a whole heck of a lot more than $2 per unit and likely worth a great deal more than the baseline $10.50 per unit in oil and gas reserves.

Unfortunately, as investors in both Linn Energy LLC (NASDAQ:LINE) and LinnCo LLC (NASDAQ:LNCO) have realized, the accusations that are being made are compelling enough to scare many investors. Given the double-digit loss that BreitBurn investors endured this week, the allegations against it are making investors sell first and ask questions later. That’s really a shame because this is a great company with a great asset base that’s worth far more than two bucks, and I’d venture to say its also worth far more than it’s currently trading. That’s not to say the company won’t endure a rocky future, but those reserves are its solid ground.

The article 1 Number BreitBurn Investors Simply Must Know originally appeared on Fool.com is written by Matt DiLallo.

Fool contributor Matt DiLallo owns shares of LINN Energy, LLC and LinnCo, LLC. The Motley Fool recommends BreitBurn Energy Partners L.P. (NASDAQ:BBEP)

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