LNC - Linc Energy

[Mickel]

Thanks Doggie. Good story. Certainly seems Adani is intent on making it's LNC coal investment effective and profitable. Making sure that no one else takes shark size chunks out of the deal along the way is excellent business sense. And it emphasizes the long term nature of the project VS shorter term issues

From LNC shareholder POV it strengthens the certainty and value of the residual royalties - around $100m + a year for 20 years at 2010 prices. That is not small potatoes.

Be interesting to see if this encourages participants in the sale of the Teresa coal mine to jump into the project with a similar long term perspective. Nothing like someone else leading the way to encourage others to follow !

Yes. Great story Doggie ! That's $2.00 per ton royalty (in 2010 AUD adjusted for inflation) and the article states they are planning for 60M tons pa from 2020. That could be $150M in 2020.
Of course LNC are said to be in the process of selling the royalty stream so we may see some $$$$ much earlier. Refer this analyst report Feb 2011-
http://www.austock.com/pdf/LNC180211.pdf

 

[Brian Acheson]

The following is to a link on the Technology of EOR using CO2.
It sites one of the main factors as the availability and cost of CO2
http://www.globalccsinstitute.com/c...-available-download-co2-eor-and-transition-ca

 

[dogeatdog]

This is another article relevant to Linc energy.
It perhaps highlights a reason the next coal tenement sale is taking longer than anticipated.
http://www.couriermail.com.au/business/costs-may-mar-high-hopes-for-galilee-basin/story-e6freqmx-1226073945951

LNC Holder.

 

[basilio]

This is another article relevant to Linc energy.
It perhaps highlights a reason the next coal tenement sale is taking longer than anticipated.
http://www.couriermail.com.au/business/costs-may-mar-high-hopes-for-galilee-basin/story-e6freqmx-1226073945951

LNC Holder.

Could be. LINC said they had 4 bidders and were now trying to get the best value from these players Perhaps the general market fragility as well as the cost factors the article is referring to are reducing the estimated value LNC might get from the sale. I seem to remember figures of $500m plus being thrown around earlier but the last ones mentioned were in the $450m band.

Peter Bond has always wanted to achieve best value results for his sales. Maybe however the Bird in the Hand proverb is most apt here.

It's also interesting that LNC is not recovering in any significant way from the steep falls of early August. One would think that institutional analysis of LNC's oil plays, current cash reserves as well as the impending coal sale would bring out bargain hunters. But there hasn't been any sustained rally.

 

[Jonathan111]

Is LNC going into Russia? they have lots of coal... so does Africa..

Shale oil prospects in SA? interesting... I wonder if the basin is gas charged like the cooper basin, sands, shale, oil..

Beta fuel cell coming soon to chinchilla?

More drilling in Alaska? Has it started already?

Anything to report at Cloncurry\Richmond?

Gulf of Mexico sale completion anticipated soon. Same price?

Has oil production at the Ranch increased yet?

UCG Generator 5 commission at Chinchilla?

UCG permiting in America for a demo plant? Will this turn into commerical plant?

When will they start injecting C02 for EOR and sequestration? Will it take about a year of pumping C02 before significant increases in production are seen?

Exciting news to come...

http://docs.google.com/viewer?a=v&q...DWrcSB&sig=AHIEtbQG4-mcFVkfAu7475k41d7R-a6CLQ

 

[basilio]

Interesting Jonothan Did you hear a whisper on Firestone.?

Linc just announced a 9.6% stake in Firestone. The company has just had approvals for a coal development in South Africa and LNC wants the UCG and oil rights. Only cost them peanuts ( $1.8m ) and assuming it all goes according to Hoyle there should be some big bucks in the deal.

Naturally the SP has slumped yet again and now sub $2.00. (I'm wondering when it will fall below cash in bank value...)

http://newsstore.fairfax.com.au/app...te.ac?get_prices=Get+prices+&+charts&code=lnc

 

[Jonathan111]

Hi Basilio,

Its a great time to be buying into South African energy assets, they are at bargain basement prices, with Malema running his rein of terror scaring the hebbie gebbies out of investors.

Looking at Ann "Becoming a substantial holder from LNC" it looks as though they were buying in since 20th May 11?

I wish could hear whispers, there has been a bit of talk about South Africa from Linc and jobs advertised.

In regards to Teresa. The outlook for PCI coal is good.

Shenhua's board secretary, Huang Qing also told the newspaper that Shenhua was seeking to acquire overseas coking coal assets to meet China's rapidly growing steel demand, adding that it was currently looking at coking coal projects in Russia and Australia.
http://af.reuters.com/article/energyOilNews/idAFL3E7K501Y20110905





Cheers Jonathan

Rice Mills in China use Rice Husk Gasification.

 

[bloubul]

The company has just had approvals for a coal development in South Africa and LNC wants the UCG and oil rights. Only cost them peanuts ( $1.8m ) and assuming it all goes according to Hoyle there should be some big bucks in the deal.
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This should be interesting. I have just a few comments...
1. How will this benefit the LNC shareprice. The SARand has significantly devalued over the past 10 years.
2. How did Sasol (Linc has a few of ex-Sasol engineers) not get into this resource
3. S-African Gov is strife with corruption. Lots of talk by ANC youthleague to nationalize resources and anything that makes cash .Which one of Zuma's son's is sitting behind Sekoko.
4. I hope Firestone has done their risk assesment.

I suppose $1.8mil is small change once QLD ten is sold.

 

[basilio]

This should be interesting. I have just a few comments...
1. How will this benefit the LNC shareprice. The SARand has significantly devalued over the past 10 years.
2. How did Sasol (Linc has a few of ex-Sasol engineers) not get into this resource
3. S-African Gov is strife with corruption. Lots of talk by ANC youthleague to nationalize resources and anything that makes cash .Which one of Zuma's son's is sitting behind Sekoko.
4. I hope Firestone has done their risk assesment.

I suppose $1.8mil is small change once QLD ten is sold.

Some good points Bloubal but you summed it up with your final comment regarding the $1.8m entry cost.

The significant point I see is that approval has finally been given for the coal project. That is a big hurdle in challenging economies. That suggests the show will be on the road in the near future.

LNC's value will come from UCG, as well as oil and gas rights to the project. They see the possibility of mining the underground coal and turning it into diesel or power. So for a measly $1.8 m they get 10% of the action with the coal mine and 100% access to the underground coal and any oil or gas (I imagine they will end up paying some royalty in any deal). Local cost effective power generation and local production of diesel will be well valued in South Africa.

Not a bad deal.

 

[Mr Z]

It would be kinda hard to nationalize an operation that you can't operate. Hugo is screwing up his nationalized oil fields for lack of expertise and oil tech is widely understood, imagine what a mess the SA lot would make of Linc's operations?

 

[Smurf1976]

It would be kinda hard to nationalize an operation that you can't operate. Hugo is screwing up his nationalized oil fields for lack of expertise and oil tech is widely understood, imagine what a mess the SA lot would make of Linc's operations?

For the record, PDVSA (the Venezuela national oil company) was pretty highly regarded for its technical expertise prior to Hugo and his revolution which essentially trashed it.

There are competent operators in nationalised companies - it's just that they get fired pronto when a socialist revolution comes along.

I was not an employee, but I had a bit of involvement with PDVSA circa 1999 - 2000. They knew their stuff at the time.

 

[alexc2005]

Shouldn't the buyback have increased the value?

Seems like a good buy at the moment?

 

[skc]

Shouldn't the buyback have increased the value?

Compared to what? This is only the case if the market had it "right" before the buyback announcement.

What if LNC was over-valued by 50% last week? The buyback increases the value by 10% but it still is 40% over-valued... (hypothetical example only and all numbers fabricated out of thin air).

 

[dogeatdog]

Shouldn't the buyback have increased the value?

Seems like a good buy at the moment?

So many "under valued" stocks out there it would seem, but with investors expecting a dd recession, a Greek default, so many sovereign debt issues etc, who knows what's a "good buy".

The recent "buyback" announcement, possible from the 26th of September, offers a option for the company to buy back it's shares. It's not obligated to do so.
Could be a simple marketing tool, to try and infuse some confidence.

Linc need to start showing tangible income, from all their stranded coal. Still no news on the proposed 5000bpd modular units. (Wasn't that what the "diesel dash" was all about?

PB is obviously setting the company up for the long haul, with all the land tenements around the globe.
I'm personally fearful that going after stranded, and speculative O&G reserves, leaves the company, and it's sp, extremely susceptible to major swings.
(All IMHO)

LNC holder.

 

[dogeatdog]

To add further to my previous post, relating to UCG module:

http://uk.finance.yahoo.com/news/AFC-Energy-raises-new-cash-stockopedia-2092661111.html?x=0&.v=1

Not a AFC share holder.

 

[basilio]

I think the income LNC will make in the short medium term will come from the oil investments in Wyoming and possibly the drilling in the Arckaringa Basin South Australia. (and what has happened to that first spud ?)

The Teresa coal sale should be put to bed in quick time before the market gets any scarier. The cash will be essential to finance EOR developments in Wyoming as well as the modular UCG to diesel plants. (And again what is happening here ?)

The other dark horse could be the AFC fuel cell development. It seems as if the beta fuel cell is now operational and conceivably 2012 could see the first power stations using UCG gas to produce CO2 free electricity at competitive prices. If the clean energy bill is passed then this offers an excellent opportunity for LNC to be a big player in clean energy production in Australia and overseas. And LNC can also gasify above ground coal to produce the same CO2 free electricity.

But who knows how the market will react if/when Greece falls and the chips start to crash. We could end up with LNC being valued at less than cash in the bank if the Teresa sale goes through and market continues to fall! Wouldn't be the first time this has happened.

 

[basilio]

I'm not sure if I'm reading too much into this but I think the imminent commercialization of the AFC fuel cell could be an absolute bonanza for LNC. Apart from LNC's direct 12.5% stake in the company they hold the rights to using the fuel cell in conjunction with their UCG and above ground coal gasification technology.

The fuel cell is cheap, elegant, scalable and and now operational. Coupled with UCG or above ground gasification, it can turn hydrogen into clean electricity at very competitive prices.

There is an excellent UK investment thread that discusses the AFC fuel cell. Well worth a read to get a feel for where it currently sits.

The company has just had an open day where they allowed investors to visit the plant and become familiar with the fuel cell. The discussion thread has some great reports.

http://www.iii.co.uk/investment/detail?display=discussion&code=cotn:AFC.L

 

[Jonathan111]

interesting webpage:
http://www.eser.org/

Click map to drill-down:
http://www.eser.org/unit-federal-no...eum-wyo-inc-converse-county-wyoming-34n-76w-5

Unit Federal No. 32, Cole Creek South Field, Linc Energy Petroleum Wyo Inc, Converse County, Wyoming, 34N-76W-5
Well Status: Producing Oil Well

Operator: Linc Energy Petroleum Wyo Inc

 

[basilio]

Very interesting Johnathon. Good find. In fact I counted 11 LNC wells that are currently producing oil or gas..

Certainly be interesting to know how much production is being achieved overall.

 

[luckypaul]

I have a conspiracy theory for you all! Following on from my August 15th post

In the June 30th Quarterly Report from Linc they told us 2 facts regarding their first oil/gas well at Arckaringa-

a) Page 5:-



Linc Energy spuds its first well in the Arckaringa Basin On June 9th 2011 Linc Energy announced it had spudded its first oil and gas exploration well as part of its program for the Arckaringa Basin in South Australia. Known as Haystack 1, the well will be drilled to 1,200m or 3,800 feet. b) Page 7:-



Arckaringa Basin Update Hunt Rig 3 was accepted and spud Haystack 1 oil and gas well (PEL121) during June. The well was at 468m at the end of the period with a forecast depth of 1200m. If they were at 468m on June 30th gives a drill rate of 22.3m per day. That means 1200m will take approx 54 days ("approx" as obviously the type of rock they have to drill through will change and impact the drilling speed). That means they would have hit their target drill depth on July 30th!

So I would guess that makes drill results imminent!

Although finding oil/gas, even by professional/experienced oil companies, seems to be like trying to find a needle in a Haystack (pun intended) a positive result here WOULD make this stock soar rather more than this annoyingly illusive coal sale! .

Gentlemen, place your bets please!

we are still to get news on Linc's Haystack 1 well in South Australia. Why is that, why is it taking so long??

Either they are crap at drilling holes, are using cheese for drillbits or maybe, just maybe they have actually found some black stuff!

If they did find something you would have thought that an announcement would be hot off the presses, especially as an oil find in a brand new area, over which Linc has a huge amount of tenements would be a company maker for sure. :bananasmi:holysheep:

Now what if (and all this is pure speculation on my part) by the time I made that discovery I had already suffered a hit to the stock price from global market termoil and had decided to take advantage of that with a share buy back of just over 25 million shares (5%) what would I do???? I have a dilema!

I would do the same as any stock trader would do and try to buy my shares cheap as possible price and THEN announce the oil find! That makes Linc management sound really sneaky but if they had planned and started to inform the ASX about the buy back prior to any oil find I doubt holding back on an RNS is in anyway illegal (or is it?).

Now that sounds bad for us existing shareholders but is it really? The buy back would likely support the share price (25 million shares at a daily average of just 2.11 million would either take a while - or raise the price... or both) but that plus the concentration of our holdings in the company is a good thing!

Finish the buy back then announce the oil find (and they could use the interveining time to test flow rates and estimate the reserves etc, all legit activities - which take time).

Yes I have a wild imagination :screwy: and THIS IS ALL SPECULATION but how else can you explain a 7 week delay on a project intended to be 7 weeks in duration?

We certainly need a miracle to get Linc back up to $3 let alone $5 in these markets (which are just about to fall down the toilet again in my sad reality) so I hope I am near the mark.

A long term Linc Holder (but getting a little frustrated with it to be honest) :horse: