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Dan Dicker

Dan Dicker

Dan Dicker is a 25 year veteran of the New York Mercantile Exchange where he traded crude oil, natural gas, unleaded gasoline and heating oil…

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Three Ideas for Energy Investors to Look Into

I have three quick ideas for today’s column, with the hope that one of them will resonate with you.  Next week is my vacation week, so I hope that you will stay out of trouble until I can be with you again in the week of March 2nd. (We have a very interesting guest writer lined up for you though.)

First, Linn Energy (LINE), a core holding of mine, today bought Berry Energy (BRY) in an all stock deal, paying a 19% premium and more than the Reuters estimate of intrinsic value for the company.  In spite of all this, Linn shares are UP almost 5% this morning, not what you’d expect for a company that is supposedly overpaying for a target.  That’s how you know that Linn has been massively undervalued by the Street and deserves investment, even more so now. 

With the purchase Linn adds 30% of proven reserves where it counts, in liquids and crude production in California but particularly in the Permian basin, where Linn has already terrific infrastructure and Berry’s assets are a terrific fit.  Go on, add that to their very healthy and I believe extremely safe 8% dividend.  You want more?  Ok, I think Linn remains one of the best take-out targets in the patch – and anything under $40 is a gift.  Even with the jump today, it’s a buy.

SM energy proved today that the Eagle Ford and the Bakken are easily number one and number two in hot hot hot plays in domestic liquids and crude oil.  By increasing proven reserves by 40% over 2011 and decreasing their production costs…




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