Lower Production From Linn Energy & Enerplus May Keep Hefty Dividends Safe

   With the markets in the midst of a correction, investors are looking at high yielding dividend plays as safe havens. Companies in the Oil & Gas sector have posted surging top lines in recent quarters, leading several explorers to begin boosting dividend payments. The Bedford Report examines the outlook for companies in the Shipping Industry and provides investment research on Linn Energy, LLC (NASDAQ: LINE) and Enerplus Corporation (NYSE: ERF) (TSX: ERF). Access to the full company reports can be found at:

www.bedfordreport.com/LINE

www.bedfordreport.com/ERF

Oil stocks have taken a tumble over the last week, as crude prices have plummeted and a report on the services industry raised new concern that the economy is faltering. The US government's Department of Energy had revealed that American crude reserves climbed by 1.0 million barrels in the week ending July 29 -- suggesting weaker demand in the world's biggest crude-consuming nation.

Greg Priddy, director of global oil at consultancy Eurasia Group, told The Wall Street Journal that "the evidence accumulating of very slow growth in the US economy and substantial demand destruction... the main risk in the crude oil market over the next quarter will be to the downside."

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The drop in oil prices has been particularly hard on oil producers, many of which boosted production in recent quarters in hopes of capitalizing on higher oil prices.

Canada's Enerplus "fortunately" was forced to cut its production guidance for the remainder of 2011 due to unusually wet weather at some of its properties. The company forecasted 2011 production of 76,000-78,000 barrels of oil equivalent per day (boe/d), down 2000 boe/d from its prior outlook. Last Friday the company announced that it earned C$268 million, or C$1.50 a share, in the second quarter, up from C$76.5 million, or 44 Canadian cents a share, a year ago. Presently Enerplus pays an annual dividend of $2.20 a share for a hefty yield of 8.2 percent.

Linn Energy pays an annual dividend of $2.76 a share for a yield of around 8 percent. Last month Linn Energy posted a quarterly profit that fell short of market expectations, hurt by lower prices and a shortfall in June production due to bad weather.

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