Berry Corporation (BRY)

[Timothy Smith]

Not only does the Berry acquisition make great sense from an operational standpoint, but LINN and LinnCo LLC (NASDAQ:LNCO) investors are likely to see immediate benefits. LINN’s hefty 10% distribution will be well-covered by distributable cash flow.

And, management has long maintained its intention to increase its payout to $3.08 per unit of LINN and share of LinnCo. This has not happened yet, but it’s an exciting possibility that could materialize once the integration of Berry is under way.

As a result, investors shouldn’t be at all concerned with the market’s lackluster response to the closing of the Berry acquisition.

LINN’s production will increase substantially, its liquids exposure is enhanced, and Berry’s portfolio of long-lived assets with low depletion rates fits perfectly with LINN’s upstream exploration and production business model.