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February 22, 2006 Stock Pick: Linn Energy, LLC (LINE)

Stock Price: $19.79

"Linn Energy was the first IPO of 2006, trading as high as $22.95 on January 13th. The company acquires mom and pop natural gas interests in the natural gas filled Applachian Basin - Pennsylvania, New York, West Virginia, and Virginia."

Industry: Independent Oil & Gas

Market Cap: $550.40 million

Shares Outstanding: 27.8 million

LINE News Stories
February 22, 2006: Coverage initiated on Linn Energy by RBC Capital Mkts
February 7, 2006: Linn Energy Announces Acquisitions of Additional Working Interests
January 13, 2006: Stocks in Motion: Linn Energy
January 13, 2006: IPO Report: Linn Energy rises as first IPO of 2006

Linn Energy is similar to Superior Well Services in its geographics, both LINE and SWSI are headquartered and operate mainly in Western Pennsylvania. The difference is that Linn Energy is a natural gas producer while Super Well Services provide natural gas well maintenance, down-hole, and pumping services to companies like Linn Energy. Linn Energy acquires interests in gas wells as mom and pop operations around PA, NY, WV, and VA look to sure up retirement. Linn Energy has made a total of 12 natural gas well acquisitions since the company's inception in March 2003. Note that, this company will turn three years old this March. In three years, they have become a $550.40 million company.

LINE does not have a strong balance sheet, but they plan to use $122 million in proceeds from the IPO to pay their debt. This will make LINE much more attractive to the investment community. We have no doubt that this company plans to grow even more aggressively as they just acquired three more natural gas operations for a total of $12.7 million.

Linn Energy is a major player in one of the best natural gas markets in the United States. LINN was just rated as an "outperform" by RBC Capital Markets.

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