Linn Energy Cuts Oil, Gas Budget by 53%; Slashes Dividend

By Chelsey Dulaney 

Linn Energy LLC on Friday joined the chorus of energy companies that are slashing drilling budgets in the face of plummeting oil prices.

Houston-based Linn said it cut its oil and natural-gas budget by 53% to $730 million for the new year. Linn and its sister company LinnCo LLC also slashed their annual dividends to $1.25 a share from $2.90.

Shares of Linn Energy fell 9% in premarket trading to $9.22, while shares of LinnCo fell 12% to $9.15.

Oil prices have plunged in recent months as a flood of crude from U.S. shale disrupted the global oil market, leading a host of energy companies to cut drilling, lay off workers and slash spending.

Just days ago, Denver-based American Eagle Energy Corp. said it suspended its drilling operations and likely won't resume them until oil prices improve.

Last month, Chevron Corp. told Canadian regulators that it had "indefinitely" suspended plans to drill for oil in Arctic waters. Energy giants ConocoPhillips and BP PLC, along with a number of smaller companies like Husky Energy Inc. and Penn West Petroleum Ltd., also have said they would pare capital-spending plans, while EOG Resources Inc. has said it would shed many of its Canadian oil and gas fields to refocus on the U.S.

For its part, Linn said it plans to focus its budget on lower-risk projects and expansions in California, among other areas.

Write to Chelsey Dulaney at [e-mail]

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