Will the Leadership of LINN Energy Continue to Pay Dividends for Investors?
LINN Energy has one of the more innovative management teams in the oil and gas industry. The company's leadership has been one of the keys to its success as they were the first to create an upstream MLP-type investment for the public market. The team has been leading its sector ever since.
LINN's management was also the first to create a vehicle, LinnCo , to access investors who wanted the lucrative tax-sheltered income of an MLP without the associated paperwork. Further, it then used that vehicle as currency to buy out a C-Corp in the soon to be completed deal for Berry Petroleum . Add it all up and LINN's management has created an acquisition machine that has integration down to a science, combined with an industry-leading hedging program.
Looking closer at the leaders
LINN was founded by Michael Linn in 2003 and he served as its CEO until January 2010. Linn continues to serve as a director of the company. He was succeeded by then COO Mark Ellis, who joined the company in 2006 from ConocoPhillips where he last served as president of Lower 48. Ellis has more than 30 years of experience in the oil and gas industry.
Ellis' experience prior to joining LINN is important because it was focused on developing ConocoPhillips' onshore oil and gas business in America. That, of course, just so happens to be the area of focus for LINN Energy today. Because of this he has firsthand knowledge of the key production basins in America, including both the pitfalls and the potential.
This history matters to investors for two reasons. First, it's important to see that the company's founder, and namesake, is still active in the company and left it in capable hands. Further, the fact that Ellis came from a well-known, top-tier oil company like ConocoPhillips suggests that he knows a thing or two about running a big oil and gas operation.
Joining Ellis in the C-Suite is CFO Koija Rockov, who has been with the company since 2005. He has more than a dozen years of industry experience as an energy-investment banker, which is key experience for a company as acquisitive as LINN. He's been instrumental in navigating LINN through the capital markets, helping the company raise billions from investors to fuel its ambitious growth plans.
Rockov is an important name for investors to know as he is ultimately responsible for LINN's accounting and hedging, which came under scrutiny earlier this year. While the informal SEC inquiry isn't yet concluded, the fact that the Berry Petroleum deal is going through without any changes to the company's historical numbers demonstrates just how strong his oversight has been.
Ellis and Rockov are just two of the many leaders of LINN Energy. Both have extensive experience in the energy industry, as well as in areas specific to what LINN Energy does now. Because of this the company has been able to navigate past all of this year's negativity and still be on track to close its complex deal with Berry Petroleum.
Bottom line, investors are in good hands as these men have led the company admirably. That's especially evident this year as the company endured a lot of negative press but has come out stronger. The team has built a well-oiled machine that can continue to acquire mature oil-and-gas assets, lock in the margin through hedging, and pay a generous distribution to investors.
Even more great dividends
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The article Will the Leadership of LINN Energy Continue to Pay Dividends for Investors? originally appeared on Fool.com.Fool contributor Matt DiLallo owns shares of ConocoPhillips, Linn Energy, LLC, and Linn Co, 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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