It's been a tumultuous year for LINN Energy (LINEQ) to say the least. An ongoing informal investigation launched by the Securities and Exchange Commission earlier this year has cast a long shadow over the company's growth. Even the company's major strategic initiatives were in doubt. As an upstream operator within the oil and gas space, acquiring new assets for development and production serves as the bloodstream for a company like LINN.

Thankfully, recent developments may finally shed light on LINN's future, and whether LINN and its investors have brighter days in store.

Progress on several fronts
Thankfully, all this time LINN has focused on its core operations, and its underlying results have shown only mild affects from the ongoing investigation. In fact, LINN's recent earnings report showed remarkable resilience in the face of so many headwinds.

LINN's third-quarter average daily production rose and net sales of oil, natural gas, and natural gas liquids increased during the quarter as well on a year-over-year perspective. Moreover, fears about LINN's ability to fund its massive distribution were likely calmed, as LINN generated $2 million of excess net cash from operating activities above its distribution requirements.

Plus, LINN is still very much active in acquiring new assets for development, which is obviously critical for an upstream oil and gas Master Limited Partnership. In September, LINN announced it would buy oil and natural gas properties in the Permian Basin for $525 million, an investment that should pay off for years to come. The assets in the region include more than 300 proven low-risk drilling opportunities, with proved reserves of approximately 30 million barrels of oil equivalents. For the first twelve months of its operation, the Permian Basin assets will produce about 4,800 barrels of oil equivalents per day.

When 'no comment' is great news
When the Securities and Exchange Commission investigates a company, informally or not, it's usually isn't the best news. It's no secret why LINN and its financial holding subsidiary LinnCo (NASDAQ: LNCO) declined so precipitously in the immediate aftermath of the SEC announcing its informal investigation. Questionable accounting practices could have dealt a serious blow to LINN's ambitious growth initiatives, including its pending buyout of Berry Petroleum (NYSE: BRY), should the regulatory agency have found LINN guilty of financial wrongdoing.

While news of the informal SEC investigation has been few and far between, LINN provided a note to investors on November 1 that the Division of Corporate Finance of the SEC has advised that has "no further comments" regarding the amended S4 document previously submitted by LINN. While that might not seem like much on the surface, it was enough to send LINN units and LinnCo shares soaring on the day of the announcement. At long last, the market appears willing to bet that the informal SEC investigation will pass without fanfare. This would be a great sign for the planned buyout of Berry, and hopefully Berry shareholders are now more comfortable with being acquired by LINN.

Indeed, it's very much in LINN's best interests to see this deal go through as planned. Berry's assets are both plentiful and high-quality. Berry's long-life and low-decline assets would provide a meaningful geographic presence in the Permian Basin, East Texas, and California, solidly complimenting LINN's U.S. operational footprint.

Moreover, Berry's proven reserves, of approximately 1.65 trillion cubic feet equivalents, would boost LINN's current production by 30%. LINN would also receive 3,200 producing wells and more than 200,000 net acres, and has already identified the potential for cost synergies and additional probable or possible reserves in the amount of 3.8 trillion cubic feet equivalents.

That being said, should the deal fall through, it's not like LINN would suddenly find itself in a state of emergency. Its continued solid production results in addition to the previously mentioned asset purchase lead me to believe LINN would do decently well in the future without Berry, just not as strongly as it could with Berry's assets in its portfolio. While we can't say with absolute certainty what will happen, I'm inclined to believe the market reaction. I maintain a positive view of both LINN and LinnCo, and would be very surprised if the informal SEC investigation and Berry acquisition don't work out in LINN's favor.