Linn Energy SEC inquiry sparks hedge accounting debate

Linn Energy, once fêted as a leader in risk management, is under scrutiny by US regulators for its derivatives accounting practices – something that is casting a shadow over other master limited partnerships in the upstream oil and gas business, finds Alexander Osipovich

Until recently, Houston-based oil and gas firm Linn Energy was a darling of investors. Founded in 2003, it had grown by acquisition into one of the 15 largest independent exploration and production (E&P) companies in the US, boasting an array of assets across the country, from Texas to North Dakota. Linn had also drawn attention for being the largest upstream firm organised as a master limited partnership (MLP), a structure more commonly used by midstream companies, which are in the business of