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LinnCo shares rise in market debut

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

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

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

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

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

Linn Energy's sales nearly doubled to about $1.2 billion in2011 from $690 million in 2010.

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

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

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

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

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

(Reporting by Neha Dimri in Bangalore; Editing by SreejirajEluvangal)

((Neha.Dimri@thomsonreuters.com)(within U.S. +1 646 2238780)(outside U.S. +91 80 4135 5800)(Reuters Messaging:neha.dimri.thomsonreuters.com@reuters.net))

Keywords: LINNCOLLC IPO/