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LinnCo shares rise in market debut

Friday, 12 Oct 2012 | 10:42 AM ET

Oct 12 (Reuters) - Shares of LinnCo LLC , a company set up to buy a stake in U.S. oil and gas producer Linn Energy LLC , rose as much as 3 percent on their debut, a day after the company priced its offering at $36.50 per share.

LinnCo sold all its 30.3 million outstanding shares at the low-end of its expected range, raising $1.1 billion with which it will buy a 13.2 percent stake in Linn Energy, making LinnCo the company's biggest stockholder. ()

Linn Energy said in a filing that it intends to use the money received from LinnCo to repay debt, which stood at $6 billion as of June 30. Linn Energy has a market capitalization of about $8 billion.

Linn Energy, which has seen its output rise 20-fold since its market debut in 2006, has been on an acquisition spree -- even as falling natural gas liquids prices have hit its quarterly profits.

It is looking to buy natural gas assets from BP in deals worth more than $2 billion in total.

Linn Energy's sales nearly doubled to about $1.2 billion in 2011 from $690 million in 2010.

It produced 630 million cubic feet of natural gas equivalent per day in the April-June quarter from its main existing interests in oil and gas properties in Texas, Oklahoma, Louisiana and North Dakota.

U.S. benchmark natural gas prices fell 30 percent in the third quarter from a year earlier, averaging about $2.86 per million British thermal units.

But prices have recovered a little in the past two weeks because of cool weather and some nuclear power plant outages.

Barclays, Citigroup, RBC Capital Markets, Wells Fargo Securities were lead underwriters to LinnCo's offering.

Shares of LinnCo were up 3 percent at $37.48 in early trading on Nasdaq, while those of Linn Energy rose 1 percent to $40.39.

(Reporting by Neha Dimri in Bangalore; Editing by Sreejiraj Eluvangal)

((Neha.Dimri@thomsonreuters.com)(within U.S. +1 646 223 8780)(outside U.S. +91 80 4135 5800)(Reuters Messaging: neha.dimri.thomsonreuters.com@reuters.net))

Keywords: LINNCOLLC IPO/

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