Linn Energy's Stock Lost 55% On Friday: Here's Why

Shares of Linn Energy LLC LINE plunged more than 50 percent on Friday and hit a new 52-week low of $0.47 after the company announced on Thursday it has initiated a process to explore strategic alternatives.

Linn Energy noted in its press release that management is in the process of evaluating strategic alternatives and financial alternatives to help provide the company with "financial stability" and will not make further announcements until the company believes that disclosures are necessary or appropriate.

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The company also disclosed that it recently borrowed $919 million from its credit facility which represented the remaining undrawn amount that was available and its total borrowings stands at $3.6 billion.

"Efficient management of our stable asset base and aggressive cost management are driving meaningful value even in today's difficult commodity price environment," said Mark E. Ellis, Chairman, President and Chief Executive Officer. "However, given commodity pricing pressure and the impact that market challenges are expected to have on our industry and the long-term financial outlook of our Company, we believe it is prudent to explore opportunities to strengthen our balance sheet and ensure we have adequate financial flexibility to manage through prolonged commodity price headwinds. By proactively undertaking this process now with the help of our advisors, we believe we can implement a comprehensive solution that will position LINN for long-term success."

Ellis continued, "We have a very talented workforce, and I am proud of everything that this team has been able to accomplish. We currently have adequate resources to continue the efficient operations of our assets with the support of all our vendors, suppliers and partners while we work through these strategic alternatives."