LINN Energy LLC Throws in the Towel
Further, it would also have an effect on other upstream MLPs like Vanguard Natural Resources because it would have a domino effect on the sector. Like LINN, one of Vanguard Natural Resources' big problems is its credit facility. As of the end of the third-quarter the company had borrowed $1.7 billion of its $1.8 billion borrowing base, leaving it with precious little wiggle room . Needless to say, if LINN goes down it's likely dragging Vanguard Natural Resources and the rest of its peer group with it.
It doesn't look good for LINN Energy, which really doesn't have a lot of options right now. The drop in the price of oil has been much deeper and has lasted much longer than anyone in the industry could have predicted, which is really exacerbating the problem. It's growing far more likely by the day that LINN Energy isn't going to make it through the downturn in its current form.
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Matt DiLallo owns shares of Linn Energy, LLC. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
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