LINN Energy LLC and its affiliate LinnCo, parent owners of the Placerita Canyon oil field, announced late last week they’ve “initiated a process to explore strategic alternatives” and have zeroed out their $3.6 billion credit facility, withdrawing the last $919 million for “general corporate purposes.”

LINN and its shareholders have taken a kick in the pants as world oil prices tumbled in the two years since the companies purchased the local producer, Berry Petroleum Co.

LINN and LinnCo’s stock prices lost more than half of their remaining value Friday on the news, plummeting to 50 cents and 35 cents respectively.

Dating to the 1940s, the Placerita Oil Field is the oil operation west of Sierra Highway in Newhall between Placerita Canyon and Golden Valley roads, including the cogeneration facility off of Placerita.

Analysts at Raymond James Financial used the “B” word Friday when they downgraded the stock to “underperform.”

“Given the heightened risk of equity dilution through a bond restructuring and the growing potential for LINN to be forced to declare bankruptcy, we are downgrading our rating on LINN Energy and LinnCo from Market Perform to Underperform,” wrote analysts Keven Smith and Rich Eychner.

“LINN signaled to the market that its financial health is deteriorating faster than we previously expected,” they wrote. “Given the prolonged weakness in oil prices, and specifically the long dated portion of the curve, it seems that management is worried about having its borrowing base reduced to a level below its current outstandings. … However, given management’s decision to pursue strategic alternatives and fully drawdown its borrowing base, LINN’s time for an oil price recovery is shorter than expected.”

Mark E. Ellis, LINN’s CEO, said in a statement: “Efficient management of our stable asset base and aggressive cost management are driving meaningful value even in today’s difficult commodity price environment. 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…”

The company said it is working with several advisers, including Lazard, a financial management firm that specializes in mergers, acquisitions and restructurings; the law firm of Kirkland & Ellis LLP “to assist the Board of Directors and management team with the strategic review process;” and Baker Botts LLP for corporate legal representation.

“By proactively undertaking this process now with the help of our advisors,” Ellis said, “we believe we can implement a comprehensive solution that will position LINN for long-term success.”

“We have a very talented workforce,” he said, “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.”

The company said it “does not intend to make any future announcements concerning this process” unless it becomes legally necessary to do so.