LNC - Linc Energy

I am reading the announcement issued this morning once again from LInc Energy as a past time reading .

In page 2 of the attachment Peter Bond is referring of some IPO. Which basically means the share price should be attractive in early 2009 to raise further equity. See attached.

LNC bought the shares of USA Coal company for $4.08 for each share of LNC. THough it is unclear what was the fair value for Coal Company since the due diligence is now to begin. One logic could be when negotiation started the ratio of US vs Aus Dollar has changed in favour of Aussie Dollar.

But what was the price of LNC scrip at that time ?

AS PER ASX PETER BOND ON THREE SUCCESSIVE DAYS 19 TO 21 NOV SOLD 482,479 ordinary shares @$2.71 !!!

PETER BOND ON 6 NOV SOLD 151. 000 SHARES @$3.03 !!!

KEN DARK ANOTHER DIRECTOR SOLD 80.000 SHARES AT AVG PRICE OF #2.56 IN BETWEEN 27 AND 29 NOV. THIS WAS REPORTED ASX ON 2 NOV ONE DAY BEFORE THE HALT

BRIAN JOHNSON CHAIRMAN SOLD SOME 350 000 SHARES AT $3.23 ON 21 OCT 08.

I wonder if Gas Tech EMT team was so naive or desperate to pay for LNC scrip @$4 when the market price was in between $2 to 3 and only in the beginning of this year LNC was quoted less than a dollar.

Under common sense the CTG technology is less commercially viable when oil price is so low?

Don't know the answer but trying to put across before the learned audience to know and understand my gaps in understanding the LNC logic or if the good story on LNC is really too good ?

To educate myself I did some search in Google Australia and USA sites, Wyoming White and Yellow Pages etc.

Whereas we must rely on the report published in ASX but some of the USA Media has reported like this on 3 Dec 08

http://www.upstreamonline.com/live/article167460.ece :

Linc will buy 100% of coal company Gastech via the issue of Linc’s Australian shares at a pre-agreed price of A$3.76 (US$2.39) per share. The deal represents a premium of about 50% compared to Linc’s close of A$2.55 yesterday.

Some Google research on Wyoming based Gas Tech COmpany

Could not find much about this company excepting whatever being published today through Linc Energy .

Tried whitepages in USA and found the address : Gastech Inc

(307) 265-7252
139 West 2nd Street, Suite 200,
Casper, WY 82601 No website.

In the same address however there is another company Wold Oil Company's office on the same suite no with website address http://www.woldoil.com/

If you click on the link of the WOLDoil there is a page which has several defunct links !!

The only other source on Gas Tech is found in this link

http://www.trib.com/articles/2007/12/18/news/wyoming/8fe45f6c4b8444ac872573b500089e28.txt

As a prospective investor, I am getting very curious on the whereabouts of Gas Tech.

Surely there will be far more people in ASF who know more about Gas Tech and LNC

ah yes, defiately heard that before - the best brains and compters in the world (Club of Rome) predicted same in 1978 but here we are, oil trundling back to sub $40 after a manipulated trip to $100 plus.
But maybe, there is only enough oil to last the world another 6 days - maybe.

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treefrog

Well there may well be heaps of oil still around but not in Oz, US or China. It's long been considered Aust will be a net importer of Oil within 8 years (unless you know something!...if so please share it with us), so one would think, if LNC is successful in commercialisation, then PB's got the timing just about right.

And the US is in a similar position (depending on Alaska) & China. Obama declared he wants the US to be not dependent on foreign oil, so this type of project should get his support, if it is successful. Indeed any sensible govt would try to be energy self-sufficient.

FYI I think computers & sw are a bit more advanced now than in the 70's

Even the big guns (Rio Tinto) are following in Linc's footsteps with investment in the coal gasification to liquids technology.

Rio Tinto Sets Sights on Monetizing Coal With Gasification

02 December 2008 - "... Rio Tinto has recognized the important opportunity for sustainable development through the gasification of coal for energy and liquid products. Tom Albanese, Chief Investment Officer for Rio Tinto, said “Coal is a key part of Rio Tinto’s energy business and we believe it has an essential role in generating clean power in the future.”

Rio Tinto has joined with BP to form Hydrogen Energy for the purpose of accomplishing the goal of developing coal gasification plants and creating clean power. Rio Tinto made a cash investment of $32 million towards the joint venture.

The new venture, Hydrogen Energy, will be headquartered in Weybridge. Both companies will provide employees for staffing the company. The initial headcount is expected to be approximately 75 employees.

www.coalgasificationnews.com/2008/12/02/rio-tinto-sets-sights-on-monetizing-coal-with-gasification/

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ColB said:

Even the big guns (Rio Tinto) are following in Linc's footsteps with investment in the coal gasification to liquids technology.

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Rio is a great company.

Rio knows the industry and future pretty well.

Fools say that it is a top heavy company and when some one needs to be sacked they promote that person.

When they lost $45 Million in a break down at one of the WA mines they did not sack any one and rewarded the people who should be punished for poor maintenance.

The old tyre bungle was totally kept secret. It has an ocean of money so few hundreds of millions no one notices.

who wants more proof :

Being a mining company they investing in coal to gas - no synergy of brain here (I am assuming some left)

$34 billion or more in debt

Refused the deal with BHP when their share price was at $140 telling Rio price was too cheap offered by BHP and now landed the share holders at a price of $34 (may be lower tomorrow )

So it is definitely a legacy and smart move to follow Rio's foot steps and getting excited about it. I think no one hardly read the issue behind the so called US company who bought LNC share at $4 when the directors have started unloading their holdings. All smart moves

Good luck to me as I just stopped the temptation (greed) to buy LNC and RIO even the prices sunk down

I can't handle it anymore!!

Anyone found any further info on the Teresa sale?? Anyone know of concrete evidence of the Chinese govt putting a hold on purchases of foreign assets?? (did a chinese co just buy Perilya??) Whats going on??

The chinese are very strong negotiators. There is a risk that unless a deal is part of an overall long term package a chinese negotiating team may simply walk away from an agreement.( This comes from a business friend who has first hand experience with industrial negotiations in China.)

The Teresa deal is part of a package which incorporates LINC's partnership in developing UCG/GTL projects in China. It also ties in with Chinas need to be energy self sufficient as traditional oil reserves rapidly deplete and oil exporters ration their exports as a consequence.

The big picture is realising that regardless of the current low price of oil, it will rise rapidly in the next few years and that now is the time to build the partnerships, infrastructure and skills that will be essential for energy self sufficiency from 2011- 12 onwards.

Anyway that is the reality and hopefully the pitch that LINC is discussing with its Chinese counterparts in what is a terrible economic climate.

The increased demand during the resources boom led many to think that the world was running out of resources,including oil.

The World Bank has forecast that

there is little likelihood that the world will run out of natural resources (or food) in coming decades

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It has noted that the existence of ample reserves, and a history of the improvements in the technology with which resources were found and extracted, suggested that supply will continue to rise in pace with demand.

It is worth remembering that the coal gas to liquid fuel technology was pioneered in Germany during the war. After the war the availability of cheap oil made this process uneconomic. High oil prices have not been sufficientlly sustainable in the past 60 years to change this outlook.

Any company seeking to raise capital to start GTL production at this time would have it's work cut out.

Linc now has all it's eggs in one basket. So everything hinges on the China deal, which hinges on the whims of the Chinese Government

Originally posted by Calliope "...Any company seeking to raise capital to start GTL production at this time would have it's work cut out.

Linc now has all it's eggs in one basket. So everything hinges on the China deal, which hinges on the whims of the Chinese Government..."

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You losing faith Calliope? Granted that LNC does need considerable capital to build its first plant and the completion of the 'Teresa Sale' is important no matter WHO buys it.

Until such time as the company actually makes money it does make you wonder what will propel the SP over the next 6-12 months apart from the sale of other coal tenements that they are proving up.

Its not going to happen overnight but their MOU's with Vietnam, China, JV's in the US (Wyoming), etc are setting this company up for what I believe will be a prosperous future. Wouldn't it be good if they could power BHP's Olympic Dam Expansion, you never know what might be around the corner.

And it is interesting that BP and RIO have put 32 Million into a Coal to liquids venture.

The current SP over the past 2-3 weeks seems to have found reasonable support around the $2.40 - $2.60 mark although has closed a little bearish today for my liking.

Any technical analyst care to give their view on the chart at todays close. I would appreciate it. Is it a triangle formation about to break up or down? Not qualified to say but would appreciate any comment. Thanks CB

am a holder of this stock

re the proposed Chinese purchase of the coal tenement.

it occurs to me that why would they pay $1B+ for it, when the market Cap of LNC is now only about $993M?

I have dealt with Chinese businessmen before.

my answer would be, they wont.

I wouldnt

so what next?

build a stake? takeover offer?

awg said:

am a holder of this stock

re the proposed Chinese purchase of the coal tenement.

it occurs to me that why would they pay $1B+ for it, when the market Cap of LNC is now only about $993M?

I have dealt with Chinese businessmen before.

my answer would be, they wont.

I wouldnt

so what next?

build a stake? takeover offer?

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A takeover may not be politically possible whereas purchasing assets piecemeal might be acceptable as Sinopec did with 60% of the Puffin oilfield.

Just a thought. I don't hold LNC.

Originally posted by AWG "...re the proposed Chinese purchase of the coal tenement. it occurs to me that why would they pay $1B+ for it, when the market Cap of LNC is now only about $993M? I have dealt with Chinese businessmen before. my answer would be, they wont.
I wouldnt. so what next? build a stake? takeover offer?

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As a holder also, I understand your frustration AWG especially when our market goes up and this slowly is going down. But I don't think LNC's market cap of $933 million has anything to do with Teresa Coal sale. The Chinese are not buying LNC, they're buying one of LNC's assets. The irony is that the $1.5 billion heads of agreement with Xinwan regarding the sale is actually cheaper now than it would have been had they progressed the sale at the time it was announced.

You need to remember that LNC was trading around the $4 mark before this potential sale was announced to the market. I can't remember exactly what LNC rose as a result but I think it was around 60-90 cents or so.

Peter Bond stated that he expects the SP to head back to around $4 when and if this sale is finalised in the short term. In this market I think he is too optimistic for that to happen.

For what it is worth I really can't see this thing moving much until it gets closer to production which will be at least 12 months or some mind boggling joint ventures are announced where investors will see the huge potential that this company has to make a bucket load of money.

The only problem at the moment is they can't do that while oil is selling at the ridiculously low price that it is but we all know that that is a short term scenario anyway.

Regards CB

May anyone suggest a reason(s) why the chinese would actually go through with the purchase, given the current conditions? Seems like its going to be a no go..

Disclosure: I continue to hold LNC.

Anyone know what's going on today? (down 20% at one point) Is this something to do with them issuing shares?

xscape said:

May anyone suggest a reason(s) why the chinese would actually go through with the purchase, given the current conditions? Seems like its going to be a no go..

Disclosure: I continue to hold LNC.

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It is difficult for us to understand the workings of the oriental business mind. However an interview with an unnamed high ranking official as reported in the Nanjing English language Daily Bugle may cast a little light on this matter.

When we offer Link Bond $1.5(A) billion for theresa coke mine it was big steal. Now that Aussie dollar has gone pearshaped it is real bargain. However our steel industry also go pearshaped. We have more coke coal than need

But we always look to future. If we buy mine by time we dig up coal, steel boom again.

Political picture in Australia not so pretty. Barbarians ruling party dominated by Green terrorists. They have Rudd by short and curly. Greens say all coal must stay in ground. Unlike Chinese, Mr Rudd talk in riddles. Nobody understand what he say and tonal nuances no help, Our expert on Aussie lingo say he trying to bet two way, He want China to remain rich and prosperous with big need for Australian coke coal and iron. As Confucious would say, Rudd thinking and green terrorist thinking not compatiable. Big danger Rudd to save face might say no more new coal mine.

We put problem in too hard basket for another time. We in no hurry. It took thousand year to get where we are. Mr Link Bond go nowhere without our money. We have him by short and curly.

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wow - that is some key news... with that in mind... LNC share price will bounce between $1.50 and $2.70 for the near future. Alot of the buyers at the moment would be acting with the "near to be finalised" (Bonds words not mine) teresa coal sale... this sounds ominous...

also if you look at Gloucester and MCC today, its not a pretty time to be a coal producer selling to world steel demand... it has evaporated... that is why there has been no "Bargain" take overs since this crisis really picked up speed... fortescue's potential against is Market cap is evidence enough of this... potential means nothing for the short term - and all small - mid caps will suffer as a result...

My high ranking Chinese official is,of course. completely fictitious. But I am pretty sure that , if he did exist, he would be thinking something along those lines.

hahahah fictious but probably spot on!!!

Something about the short and curly's being a well known confucianism had me confused!

Technical analysis of a chart of LNC suggests a further move to the downside.

more Bond firefighting from todays announcement RE: wtf from the asx:

The Company is aware of announcements made today by other companies regarding actions being taken in response to the weaker global demand for coking coal which has negatively affected share prices across the sector. Given this, the only explanation the Company can offer for the trading in its shares is that there is speculation in the market based on these other announcements that the completion of the Company's previously announced sale of its Emerald (Teresa) coal tenements may be affected. Based on continuing communication with the purchaser, the Company advises that it remains confident that the Emerald sale will be finalized in due course.

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due course doesnt sound like soon!!!

Could it be the farmers that Linc compensated are cashing in before Christmas.


If so, it would be a very nice Chrissie present!