LinnCo LLC (LNCO), Berry Petroleum Company (BRY): A Closer Look at One of Linn Energy LLC (LINE)’s Potential Hidden Assets

That being said, given the high costs of developing shale oil, Linn Energy LLC (NASDAQ:LINE) is likely to sell a stake in the asset rather than ever develop it. LINN has shown in the past that it would rather someone else prove up a shale play before it gets involved. For example, back in 2008 LINN sold its entire Appalachian position, including the Marcellus shale to XTO Energy which is now a subsidiary of Exxon Mobil Corporation (NYSE:XOM). LINN received $600 million for the asset, which would have required too much capital to fully develop. Meanwhile, XTO was able to get a nice toe-hold into what was then an emerging shale position. While Linn Energy LLC (NASDAQ:LINE) wouldn’t sell its California acreage, it probably would enter into a joint venture in order to get it developed.

So, while the future development of the Monterey probably won’t be a major needle mover for LINN Energy, it still does represent another reason why the Berry transaction is important to its future. The deal adds a lot of high margin oil production, as well as tremendous oil reserves. That’s why despite the delays, this is one deal that should really prove to be worth the wait.

The article A Closer Look at One of LINN Energy’s Potential Hidden Assets originally appeared on Fool.com and is written by Matt DiLallo.

Fool contributor Matt DiLallo owns shares of Linn Energy, LLC and Linn Co, LLC . Matt DiLallo has the following options: short October 2013 $25 puts on Linn Energy, LLC and short November 2013 $25 puts on Linn Co, LLC . The Motley Fool has no position in any of the stocks mentioned.

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