LinnCo (NASDAQ:LNCO) has two important jobs. It was created to be used as an acquisition currency for its parent, as well as to fuel income to investors. I think LinnCo can accomplish both jobs by acquiring Denbury Resources (NYSE:DNR).
LinnCo is intended to acquire C-Corps that own low-decline oil-and-gas properties that can then be dropped down to its parent, LINN Energy. It made its first such deal last year, which took much longer and cost more than expected. But with one deal in the bag LinnCo is likely itching to make its next move.
While other companies meet LinnCo's criteria, few offer the same strategic fit as Denbury Resources. As a company focused on using carbon dioxide in enhanced oil recovery, Denbury is a near perfect fit for the low-decline oil assets its parent wants to add to its portfolio. The following slideshow will help investors better understand why a LinnCo-led acquisition of Denbury Resources would make so much sense. It details why low-decline assets like those owned by Denbury Resources are exactly the type of assets LinnCo's MLP parent would love to acquire.
Do you know this energy tax "loophole"?
The best way to fuel extra income into your portfolio is actually found in a tax "loophole". It's actually the loophole that LinnCo's parent uses to fuel so much income into LinnCo. If you want to learn how to take full advantage of this profitable opportunity then you need to grab our brand-new special report, "The IRS Is Daring You to Make This Investment Now!," and you'll learn about the simple strategy to take advantage of a little-known IRS rule. Don't miss out on advice that could help you cut taxes for decades to come. Click here to learn more.
Matt DiLallo owns shares of Denbury Resources, Linn Co, LLC, and Linn Energy, LLC. The Motley Fool owns shares of Denbury Resources. 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.