LNC - Linc Energy

[jaffa]

This whole thing from The Australian article to the Department's claimed position is shambolic.

Dukey is spot on with his comments. Having worked in the QLD Government quite a few years ago, and in an area that dealt with the mining companies, the QLD Government will be looking for the option that gives it and the state the best returns. It goes without saying that the Environmental issues will have to be dealt with.

So if Linc can produce the goods (at a profit of course) and meet the environmental requirements it will be a goer. But clearly there are some risks for us holders. But this was always the case!!!

Disclosure - I hold

Jaffah
Not advice - do your own thing!

 

[jaffa]

More news in todays Australian. probably won't help the SP for Monday!!

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Clash over gas on the plains of western Darling Downs

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Andrew Fraser | August 09, 2008

THE hot, dry rolling plains of the western Darling Downs are dotted with gum trees and the occasional lagoon or animal in what is at best, in a good season, average grazing country.

It's not the area's agricultural potential but what's under the surface that's exciting passions among Australia's investors.

There is, put simply, coal. It has been there for millennia, and now it is mostly being mined to fire power stations such as Kogan Creek or railed to Brisbane for export.

But about 10km out of Chinchilla there's a road on the left which leads to Kummerows Road, where among the spinifex grass there's a tall, metal structure from which, at night, a gas flame often flares.

The fate of this piece of ground was fought out this week in Brisbane's Supreme Court in a battle that will continue next week as two companies have mining leases over the property under different legislation.

The flame is the only above ground sign of underground coal gasification, a process of power generation developed in the old Soviet Union, where it still operates.

It involves producing gas by setting fire to underground coal seams. In this system, air, oxygen or steam, or a combination of the three, is piped into a deep coal seam, which is set on fire to produce fuel gas. Its proponents say UGC can use deep and low-quality coal reserves that can't be used otherwise.

The company trialling the method at Chinchilla, Linc Energy, got the technology from the Soviet Union, and still operates a plant there, in the town of Angren.

Linc is one of three ASX-listed companies trialling UCG, the others being Cougar Energy and Perth-based Carbon Energy. All say it is safe and efficient and does no harm to the environment, but Linc, the most advanced, is still several months off finalising its Environmental Impact Statement, which must be cleared by the Queensland Government. The major environmental problem is that burning coal underground could harm the underground water system, which is no small concern as the ground under Chinchilla contains not only coal but the water of the Great Artesian Basin. There's a an even bigger problem on the Chinchilla holdings -- one that is being canvassed in Queensland's Supreme Court. While Linc is operating its pilot technology under the Minerals and Resources Act, Queensland Gas has tenements over the same land under the Petroleum and Natural Gas Act.

Multiple tenements have existed before, but the main issue in this instance is that production of coal seam methane and underground coal gasification technology are broadly incompatible. UCG involves burning the methane that is the basis of coal seam methane production.

It's exactly this dilemma that the Queensland Government has to confront. CSM is growing quickly in Queensland, and there is considerably more potential in it. It is a proven technology with existing infrastructure and would provide energy, in particular, for the fast-growing southeast Queensland area, about 300km to the east.

While proponents of UCG claim it is a proven technology with no environmental risk, the Queensland Government is being ultra-cautious in its approach. So much so that on Wednesday afternoon, after inquiries from this newspaper, it issued a statement that "the Department of Mines and Energy has no intention of granting production tenures for underground coal gasification for at least three years".

It was a short-term political fix, but when the ASX opened on Wednesday morning the share prices of all three UCG companies were slashed. Linc dropped 13 per cent, Carbon Energy dropped 35 per cent, while Cougar Energy dropped 11.5 per cent.

During the day, the state government's position changed subtly. It issued another statement, this time with no mention of the three-year moratorium. Instead, Queensland Mines and Energy Minister Geoff Wilson said the state Government "would only do what was best for Queensland in relation to underground coal gasification technology on trial in the state".

"These projects are in a pilot phase, which is why they have a conditional tenure and that gives no automatic right to a production tenure at a later point," he said.

"We're not about to give the green light to underground coal gasification projects, especially where any of them may affect the Great Artesian Basin, unless we're convinced it's in the best interests of Queensland.

"Any company carrying out trials of this new technology is doing so in the full knowledge of the state Government's stance. This should come as no surprise to anyone."

There was some recovery in share prices yesterday, with Linc gaining 8.5 per cent to finish at $3.20, not that far behind the $3.38 it had been before the state Government's statement.

The debate still has a long way to go. Linc managing director Peter Bond says it's obvious the two technologies can't exist on the same piece of ground -- "two people can't eat the same slice of cake" -- but they can exist close to each other.

"Just throw up a fence, we'll be 500 metres away, and that's fine with us," he said.

"We need a lot less ground. If there's 1000 acres, they could have 900."

The case is continuing in Queensland's Supreme Court, but this is only the start of the debate. At some stage in the next few years, the Government will have to decide which technology to back, or at the very least, how to allocate land between the two.
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[unit]

>>the Government will have to decide which technology to back, or at the very least, how to allocate land between the two.

It wont have to decide that at all imo. It will just have to allocate tenements to the best submissions and insure environmental standards are met. That's a bit like saying this is cattle country, can't keep sheep on this land.
What a joke. I feel embarassed for The Australian.

 

[mexican]

Spot on Unit!
If both industries are going to be worth billions+ and enviro is to standard, well what do you think? Pick one over the other. I don't think so.
Three different journo's have had a go now. What next?
Just another very poor article from The Australian!

 

[Santoro]

Giving the tenement rights a bit of thought (3 minutes) : ..... I must disclose that I have minimal legal knowledge.....but if a judge would have to decide...which came first the chicken or the egg...he/she may be in trouble...but not so dificult in this case which came first the coal or the gas?

 

[namrog]

In this case both QGC and Lnc want it for the same thing IE - GAS, whichever type, gas is gas.

Does anyone know, who was granted the tennements first, as I'm thinking this might have an influence on any legal decision, not that I know anything about the legal system.

It's the end product that's different though, and diesel is essential for the production of food,among many other things and a governments failure to plan ahead , and have some sort of safety net in place to counter an oil shortage for whatever reasons , which will affect food production, won't be tollerated.
It's why I believe Canberra have such a big interest in Linc, and if they can, will put pressure on ??????? to secure Lincs future.
Federal and state labour ?????

My oppinion only and dyodd.
Re Joe.

 

[ColB]

"..Cash problem solved

It isn't easy to fund a $US850 million ($970 million) project these days, even if it involves a lucrative business model like turning coal gas into liquid diesel fuel. But Linc Energy's foresight in picking up a coal tenement in the Bowen Basin should go some way towards helping it solve the funding problem.

Linc Energy owns the German Creek coking coal measures and is hoping to prove a resource of 500 million tonnes -- by November. It will then sell the project to the highest bidder, since it is not a part of the company's core alternative energy business. BHP Billiton and Mitsubishi recently paid $2.5 billion for New Hope's New Saraji coal project, which had 690 million tonnes of coking coal resources. The closest operations to Linc's coal project, near Emerald, are BHP and Mitsubishi's Gregory Crinum mine, and Rio Tinto's Kestrel mine.

Linc expects to start producing diesel from a $12 million pilot plant at Chinchilla in southern Queensland in a few weeks before building the larger-scale project, which will produce 20,000 barrels of fuel a day. Linc has brushed aside recent concerns coal-seam gas producers had been granted the rights to the same coal measures it is using for coal-gasification. It has noted that its project has been deemed to be of "state significance" in Queensland and enjoys strong support from the Federal industry minister, Martin Ferguson. Source: Sydney Morning Herald 12 August 2008

While the SP of this one is getting hammered by the doomsayers just as Carbon Energy has over the past few days why would you sell out of a project with so much potential unless of course you bought in at 25c and are taking profits.

 

[grace]

While the SP of this one is getting hammered by the doomsayers just as Carbon Energy has over the past few days why would you sell out of a project with so much potential unless of course you bought in at 25c and are taking profits.

I think Linc is holding up pretty well compared to the rest of the market. It is trading above key resistance, and let's hope it stays that way. As Col mentions, has plenty of coking coal behind its name, so it's more than just a pilot plant, and the market seems to be giving credit for that.

 

[jast28]

Hi all, not sure if anyone has seen this yet but I received this via email from Janeele van de Velde (Manager Investor Relations & Corporate Communications - Linc Energy).
Good reading and great news.

The latest BBY Analyst Report which was released 12/8/08

 

[Calliope]

Hi Jast28. Did you say "good news"? This analysis in not very different from the last one, which was also good news. You have probably noticed lately that the market is not very interested in good news...only bad news. One of the positives that I am hanging my hat on is the marketability of the coking coal tenement (Theresa) at German Creek referred to yesterday by ColB. I feel that this will be a winner.

 

[grace]

ABC Radio Southern QLD received its nearlly weekly call about how Linc was going to the waiting broker yesterday (program every Saturday morning 8.30 to 9.00am finance).

Comments were

1. Qld govt departments not talking to each other had caused some pain for the csg vs ctl argument, and some pain to Linc's share price.

2. Long-term view, in relation to energy production, ctl extract 80% of the available energy, and csg extract only 8%, from the coal seams. What do you think might be better for QLD? (was the brokers comment)

Linc tour on Thursday 21/8/08 as part of the Surat Basin Energy conference. Wonder if we'll have liquids by then?

 

[cartel31]

There was an announcement today! The testing has been completed and the plant handed over to the operations team.

Didn't really affect the price that much. I think there is a lot of people that got hurt by LNC lately. They are trying to offload and get out. See what tm brings.

Its sitting on whats looking like nice and strong support. The indicators are not bad, and looking like there is a bull run even though it may be short on its way IMO.

The XEJ also is looking nice and seems to be on the beginning of a uptrend. I think with the reporting season and the fact that the energy sector has done very well this year due high energy prices people are channeling money back into the sector to ride these stocks due to increased earnings. Even though oil has dropped so much in price the sector has just started moving in a upward direction in my opinion.

Out of all the sectors at the moment the chart for the energy sector seems to be the most inviting. Looking like its at the beginning of a bullrun IMO.

I actually bought in today and I hope I done the right move, God Willing!

I'm still a newbie so no body take me seriously at all!

 

[Goldmann]

More LNC comentary from the DR... just an excerpt... subscribe to their newsletter if you havent already...

--What about the Black Leaf project you read about here and in Money Morning recently? Has it been badly compromised by bureaucratic dithering and sleight of hand?

--Our view is short and simple: if Queensland misses the boat on turning stranded coal seams into liquid fuel through underground coal gasification (UCG) and gas-to-liquids (GTL), it will be Queensland's (and Australia's) loss. But the business plan of the share we tipped to our small-cap readers, though unsettled by the ambiguity of the government's positions, does not depend on operating commercially in Queensland.

--In fact, the plan goes beyond that, to coal in Indonesia, China, and Wyoming in the U.S. These are all places that are more than willing to look at a technology that turns coal into transportation fuel. Like it or loathe it, you at least know you can get energy from coal. Australia might not pursue this course. But plenty of others will.

----------------------------------------

certainly not as strong as the "buy this stock and you will be rich by June 2009" claims of last month, but still positive, and from someone who seems to call a spade a spade...

Qld (where i live) Govt appears to be turning back the clock to the Sir Joh era of late... bumbling fools.

 

[Calliope]

Hi Goldman. Bumbling fools may be right. As for Sir Joh, he certainly had a lot of short-comings, but the failure to recognise a good business opportunity was not one of them. Under his regime a Linc CTG/GTL project would have been fast-tracked to get the jump on the other states. Of course he would have given the Greenies short shrift.

 

[Goldmann]

hahahaha yeah your right... i meant more the perception from others that Qld was a backwards state...

but yeah - Joh was king of the "knock them down while they sleep" development theory hahaha... he was the one who made the Greenies turn into a 24 hour 7 days a week cause...

As a side note, got the new LNC newsletter in the post... Geez they are ramping it up, Bond in particular could not be more positive - no mention of the QGC debacle though... JORC later this month from Chinchilla if i read correctly, and aiming for a 1 billion tonne resource JORC'd by year end??? might be time to buy some more.

 

[ColB]

Originally posted by Goldman

As a side note, got the new LNC newsletter in the post... Geez they are ramping it up, Bond in particular could not be more positive - no mention of the QGC debacle though... JORC later this month from Chinchilla if i read correctly, and aiming for a 1 billion tonne resource JORC'd by year end??? might be time to buy some more.

LNC does seem to be gathering some momentum in the last couple of days. The buy/sell ratio is also slowly turning in our favour.

Any technical analysts out there wish to provide their thoughts on this one (please)

I tend to think the announcements due out soon relating to successful commissioning of the pilot plant and coking coal deposits at Emerald will obviously kick it along but am wondering in the abscence of those reports what a technical analyst sees in the next couple of weeks.

 

[grace]

Not a techno Col, but it is sitting on key support. Holding up well. Noone really selling too many at these levels though. Just seem to be awaiting news I would think.

 

[korrupt_1]

Not much a chartist... but I'll give it a go...

Can see a descending triangle forming... with the base sitting around $2.60-$270. This is the first line of defence againts downward pressure. With 50% Fib line here aswell, we're at an important price level. If we want to see higher price, this line MUST hold.

Can see heavy resistance on the way up. 38% Fib line at $3.23 and the gap ($3.26-$3.40) will need to be filled before any higher prices can be seen. The red downard trendline will also contain prices.

Stochastics and MACDs are turning higher which is a good sign.

Still the prevailing trend is down - but it is forming a bottoming pattern in the last few days so perhaps this could be a key turning point.

I can't see any bullish pattern forming yet and volume is not inspiring.

Disclosure: I am a LNC shareholder.

 

[eric35]

It seems to have formed a solid base, is still above the 150 day EMA and has formed a nice triangle. I would like to see it break out up from the triangle, if possible with a bit of volume, before I buy.

However overall I like the chart, although the RSI is still below 50 and the parabolics are still not good.

 

[basilio]

Nice to see LINC start to move and or course I also saw the newsletter.

Very colourful.... I was a bit concerned to see the great graph showing the upward movement of LINC shares but not tracking the falls in the last couple of months. Are we supposed to not notice what has happened or is this simply marketing 101 and par for the course. Any thoughts?