TEXT - S&P affirms Linn Energy
Nov 29 - Standard & Poor's Ratings Services today affirmed its 'B' issue rating (one notch below the corporate credit rating) on Linn Energy LLC's senior unsecured debt and removed the rating from CreditWatch with negative implications. The recovery rating on the senior unsecured debt is '5', indicating our expectation that lenders would receive modest (10% to 30%) recovery in the event of a payment default. We took these ratings off CreditWatch following a review of the recovery prospects of Linn's unsecured debt using the PV-10 value of its proved reserves, including all year-to-date acquisitions, based on our revised recovery price assumptions of $50 per barrel West Texas Intermediate (WTI) crude oil and $3.50 per mmBtu natural gas. The ratings on Linn Energy LLC reflect the company's "fair" business risk and "aggressive" financial risk profiles. These assessments reflect Linn's growing midsize reserve base, elevated financial leverage, and substantial quarterly distributions to unitholders. Also, impacting ratings are the low geological risk inherent in the company's reserve base, a balanced production mix between natural gas and liquids, and substantial commodity price hedges to minimize cash flow volatility. RELATED RESEARCH AND CRITERIA -- Key Credit Factors: Global Criteria For Rating The Oil And Gas Exploration And Production Industry, Jan. 20, 2012 -- Revised Assumptions For Assigning Recovery Ratings To The Debt Of Oil And Gas Exploration and Production Companies, Sept. 14, 2012 -- Recovery Price Deck For Exploration And Production Companies Revised, Sept. 14, 2012 RATINGS LIST Linn Energy LLC Corporate credit rating B+/Stable/-- Ratings Off CreditWatch Linn Energy LLC Linn Energy Finance Corp. To From Senior Unsecured B B/Watch Neg Recovery rating 5 5
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