LNC - Linc Energy
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Surely LINC has been oversold to blazes! 
Regardless of whether the Teresa deal comes through they still hold at least a billion dollars worth of asset in that tenement alone. They have proven their CTG/GTL technology and will be at the forefront of providing diesel for a very tight fuel market in 2011.
And this doesn't include the other deals being developed around the world.
It might have been a good play to short sell the shares recently but unless there is something seriously, radically wrong with the company that we are unaware of, the fundamentals indicate a very bright future.
Regardless of whether the Teresa deal comes through they still hold at least a billion dollars worth of asset in that tenement alone. They have proven their CTG/GTL technology and will be at the forefront of providing diesel for a very tight fuel market in 2011.And this doesn't include the other deals being developed around the world.
It might have been a good play to short sell the shares recently but unless there is something seriously, radically wrong with the company that we are unaware of, the fundamentals indicate a very bright future.
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Surely LINC has been oversold to blazes! Regardless of whether the Teresa deal comes through they still hold at least a billion dollars worth of asset in that tenement alone. They have proven their CTG/GTL technology and will be at the forefront of providing diesel for a very tight fuel market in 2011.
And this doesn't include the other deals being developed around the world.
It might have been a good play to short sell the shares recently but unless there is something seriously, radically wrong with the company that we are unaware of, the fundamentals indicate a very bright future.
Regardless of whether the Teresa deal comes through they still hold at least a billion dollars worth of asset in that tenement alone. They have proven their CTG/GTL technology and will be at the forefront of providing diesel for a very tight fuel market in 2011.And this doesn't include the other deals being developed around the world.
It might have been a good play to short sell the shares recently but unless there is something seriously, radically wrong with the company that we are unaware of, the fundamentals indicate a very bright future.
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Interestingly LNC has shot up about 10% or more today in ASX after few days down turn.
I missed to read and share this section of the report published in Eureka Report and part of it is reproduced here:
Linc’s troubled times
By Madeleine Heffernan
January 21, 2009 (extracted from Eureka Report) (less than 10% of total report and complies Copyright rules. For further information please read the full report dated 21st Jan available only through subscription)
PORTFOLIO POINT: A $1.5 billion deal with Xinwen Mining Group is taking longer than expected, casting a shadow over the coal-to-liquids sector.
It was the best-performing small cap stock of 2008, rising 162% and pushing its chief executive on to the BRW Rich 200. But this year might be not so sweet for Linc Energy.
After a bumper 2008, investors including chief executive and major shareholder Peter Bond have been selling stock in coal-to-liquids group Linc Energy.
Starting the year at $2.03, Linc shares trading are now trading at $1.61 as doubt emerges over the company’s deal to sell some of its Queensland coal assets to Xinwen Mining Group of China for $1.5 billion.
Having announced the deal in September, Linc disappointed investors late last month by saying that although it was “confident” it would complete the Xinwen sale, it appeared “unlikely” it would receive a $150 million deposit by the end of December.
In a media release two days before Christmas, Linc said negotiations on the Xinwen deal had “progressed particularly well”, and it expected the sale would be completed in six to eight weeks. The same release announced Linc had raised $36 million in an institutional share placement.
So is Xinwen trying to wriggle out of a deal whereby it would pay much more for the Emerald (Teresa) coal tenements than Linc's entire market cap? On Tuesday’s share price of $1.61, Linc was valued at $640 million.
The oil analyst at Southern Cross Equities, Johan Hedstrom, says given the delays, it's fair enough for people to be sceptical. “In this market you’ve got to ask: why would the Chinese pay so much? So I think they are delaying it because they are having second thoughts about paying that much money.” (International gas prices have fallen roughly in line with oil.)
DYOR : I do not hold LNC
I missed to read and share this section of the report published in Eureka Report and part of it is reproduced here:
Linc’s troubled times
By Madeleine Heffernan
January 21, 2009 (extracted from Eureka Report) (less than 10% of total report and complies Copyright rules. For further information please read the full report dated 21st Jan available only through subscription)
PORTFOLIO POINT: A $1.5 billion deal with Xinwen Mining Group is taking longer than expected, casting a shadow over the coal-to-liquids sector.
It was the best-performing small cap stock of 2008, rising 162% and pushing its chief executive on to the BRW Rich 200. But this year might be not so sweet for Linc Energy.
After a bumper 2008, investors including chief executive and major shareholder Peter Bond have been selling stock in coal-to-liquids group Linc Energy.
Starting the year at $2.03, Linc shares trading are now trading at $1.61 as doubt emerges over the company’s deal to sell some of its Queensland coal assets to Xinwen Mining Group of China for $1.5 billion.
Having announced the deal in September, Linc disappointed investors late last month by saying that although it was “confident” it would complete the Xinwen sale, it appeared “unlikely” it would receive a $150 million deposit by the end of December.
In a media release two days before Christmas, Linc said negotiations on the Xinwen deal had “progressed particularly well”, and it expected the sale would be completed in six to eight weeks. The same release announced Linc had raised $36 million in an institutional share placement.
So is Xinwen trying to wriggle out of a deal whereby it would pay much more for the Emerald (Teresa) coal tenements than Linc's entire market cap? On Tuesday’s share price of $1.61, Linc was valued at $640 million.
The oil analyst at Southern Cross Equities, Johan Hedstrom, says given the delays, it's fair enough for people to be sceptical. “In this market you’ve got to ask: why would the Chinese pay so much? So I think they are delaying it because they are having second thoughts about paying that much money.” (International gas prices have fallen roughly in line with oil.)
DYOR : I do not hold LNC
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It could be some of the short sellers covering their positions for some profit taking.
Cannot believe how much this stock has slid in the last week.
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LNC is in trading halt!
Just read the announcement and it's related to the article in the Australian.
http://www.theaustralian.news.com.au/business/story/0,28124,25009191-36418,00.html
Just read the announcement and it's related to the article in the Australian.
http://www.theaustralian.news.com.au/business/story/0,28124,25009191-36418,00.html
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Yes would be nice help soften the blow a lot of us have taken on this company waiting for the sales to go through.
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Here's the link to the article in the Australian.
http://www.theaustralian.news.com.au/business/story/0,28124,25009191-5005200,00.html.com
Ah, too slow with the post. Link is already above.
http://www.theaustralian.news.com.au/business/story/0,28124,25009191-5005200,00.html.com
Ah, too slow with the post.
Link is already above.This is the request for the Trading Halt which has been granted until Monday 7 Feb-
Linc Energy Ltd - Request for Trading Halt
Linc Energy Ltd requests that the Australian Stock Exchange impose an immediate
trading halt over its securities.
The trading halt is requested pending an announcement to clarify comments reported
in an Australian newspaper article of today's date.
Linc Energy requests that the trading halt remain until the earlier of the time of the
announcement or the commencement of trading on Monday, 7th February 2009.
Linc Energy confirms that it is not aware of any reason why the trading halt should
not be granted.
Company Secretary.
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Why not just realise the news the sale is not proceeding (e.g. why the trading halt to clarify the obvious), all I would like to see is a sale to anyone in order to provide capital for the first commercial plant once this is done this stock should barrel along....
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It would not be a surprise for the Xinwen deal to fall over. September 2008 is another universe from Feb 2009.
And it shouldn't be a surprise that more thoughtful observers and perhaps those in the know have decided to take their money off the table in the past couple of weeks judging that there will either be a better buy in price later on or LINC won't cut it as a company. (I really wish that had been me...)
But LINC still has the high quality coal in the ground, it still has a proven technology to turn low grade coal into oil at $28 a barrel and there is no way on earth we are not facing a critical energy shortage in the near future.
.
(We know that one of the big games in town at the moment is investors buying tanker loads of oil at the current price and having them meander around the ocean until the price rises. http://www.energybulletin.net/node/47965 Lightering our way to abundance) http://www.chron.com/disp/story.mpl/front/6239731.html
The trick will be to finance the construction of the commercial plant at a best possible cost. In the current economic situation , if I was a State or Federal government leader and only half aware of the crunch that Peak Oil was bringing I would be at the front of a queue for a project that
1) Constructively employed at least 1000 people for a couple of years
2) Was a significant user of local steel resources
3) Would help address a certain energy shortage and boost local supply
4) Only required a government guarantee for the project to begin rather than actual cash. (There is no reason to believe the plant would not pay for itself as a commercial operation.)
Any other thoughts?
And it shouldn't be a surprise that more thoughtful observers and perhaps those in the know have decided to take their money off the table in the past couple of weeks judging that there will either be a better buy in price later on or LINC won't cut it as a company. (I really wish that had been me...
)But LINC still has the high quality coal in the ground, it still has a proven technology to turn low grade coal into oil at $28 a barrel and there is no way on earth we are not facing a critical energy shortage in the near future.
.
(We know that one of the big games in town at the moment is investors buying tanker loads of oil at the current price and having them meander around the ocean until the price rises. http://www.energybulletin.net/node/47965 Lightering our way to abundance) http://www.chron.com/disp/story.mpl/front/6239731.html
The trick will be to finance the construction of the commercial plant at a best possible cost. In the current economic situation , if I was a State or Federal government leader and only half aware of the crunch that Peak Oil was bringing I would be at the front of a queue for a project that
1) Constructively employed at least 1000 people for a couple of years
2) Was a significant user of local steel resources
3) Would help address a certain energy shortage and boost local supply
4) Only required a government guarantee for the project to begin rather than actual cash. (There is no reason to believe the plant would not pay for itself as a commercial operation.)
Any other thoughts?
Re Comments:
No government in Australia will ever supply a guarantee on debt for a private startup company - no matter how much they will benefit the country.
I like your thinking though, this would be a FANTASTIC stimulus to the economy and cost nothing (govt could even charge LNC for the right to use the govt guarantee, perhaps 4-5% even? would net $50mil a year!!)
Unfortunately, the only thing that will help is in PB can get rid of the coal ASAP for at least a billion.
I don't think he should be focusing on maximising price at this stage, as it is more important to lock in the cash now and get the ball rolling(every months delay is costing a months profit at oil prices in 2 years time ie $80 oil price, $50 margin = 20000bpd*50 = $1mil per day lost profit, $30mil per month, cost since Sept $120mil??)
The announcement out Monday, after an extra weeks worth of negotiating (assuming PB has known about the collapse of the deal for at least a week) should HOPEFULLY include a statement that other buyers are interested and perhaps a price range and estimated time to completion. Otherwise the SP is stuffed...
1) Constructively employed at least 1000 people for a couple of years
2) Was a significant user of local steel resources
3) Would help address a certain energy shortage and boost local supply
4) Only required a government guarantee for the project to begin rather than actual cash. (There is no reason to believe the plant would not pay for itself as a commercial operation.)
Any other thoughts?
No government in Australia will ever supply a guarantee on debt for a private startup company - no matter how much they will benefit the country.
I like your thinking though, this would be a FANTASTIC stimulus to the economy and cost nothing (govt could even charge LNC for the right to use the govt guarantee, perhaps 4-5% even? would net $50mil a year!!)
Unfortunately, the only thing that will help is in PB can get rid of the coal ASAP for at least a billion.
I don't think he should be focusing on maximising price at this stage, as it is more important to lock in the cash now and get the ball rolling(every months delay is costing a months profit at oil prices in 2 years time ie $80 oil price, $50 margin = 20000bpd*50 = $1mil per day lost profit, $30mil per month, cost since Sept $120mil??)
The announcement out Monday, after an extra weeks worth of negotiating (assuming PB has known about the collapse of the deal for at least a week) should HOPEFULLY include a statement that other buyers are interested and perhaps a price range and estimated time to completion. Otherwise the SP is stuffed...
1) Constructively employed at least 1000 people for a couple of years
2) Was a significant user of local steel resources
3) Would help address a certain energy shortage and boost local supply
4) Only required a government guarantee for the project to begin rather than actual cash. (There is no reason to believe the plant would not pay for itself as a commercial operation.)
Any other thoughts?
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If the situation is as I posted some time ago, re my own negs with Chinese businessmen.
The Chinese negotiators would never pay the asking price of the coal, when they may be able to snap up a big stake in the whole company for much less.
They can always re-bid for the coal.
Their tactics IMO, would be to allow Linc SP down as far as possible, and force PB to the table, on much less favorable terms.
that is what I would do anyway
The Chinese negotiators would never pay the asking price of the coal, when they may be able to snap up a big stake in the whole company for much less.
They can always re-bid for the coal.
Their tactics IMO, would be to allow Linc SP down as far as possible, and force PB to the table, on much less favorable terms.
that is what I would do anyway
This whole thing has me baffled to be honest.
They request a trading halt, then come out with a statement that seems fairly (why not do it before requesting a halt?) trivial followed by a 10% drop in the share price, what is actually going on here?
They request a trading halt, then come out with a statement that seems fairly (why not do it before requesting a halt?) trivial followed by a 10% drop in the share price, what is actually going on here?
I don't understand the train of thought that Linc is stuffed if they don't sell Teresa asap.
Unfortunately the sale of Teresa has become front and centre of most peoples thoughts but these same people seem to forget the very reason they invested in Linc in the first instance. What attracted us all to Linc was UCG but it's now these non core coal assets that everybody is getting their nickers in a knot over.
These non core assets have also become the focus of the media and the only people that benefit from such nonsense are the "shorters" and others with similar agendas.
Maybe it's time to refocus our attention on the CORE business which is UCG. The funds from any non core asset sales are not immediately required and Linc have ample cash to begin their SA work and cover other capital requirements over the course of the next 12 months at least.
By all accounts the Chinchilla plant is producing 5bpd of higher than expected quality liquids and has been doing so non stop since commissioning. So maybe it's up to Linc now to get everybodies attention directed back towards UCG and what UCG means to Lincs future.
These non core coal assets, if not sold, are still assets and have a value far greater than Lincs current market cap. The cash would be great NOW but that may not be possible. Or at the very least we could take a hair cut on the initial $1.5 billion offer and receive somewhere closer to $1 billion. That will do me just fine. But if all else fails, we still have a ****e load of coal that is very valuable and will become more valuable the further we progress into 2009.
Its been a rough few months to say the least.
Here's a message for Linc,
STOP TALKING TO THE MEDIA ABOUT NON CORE ASSETS AND START TALKING TO SHAREHOLDERS ABOUT UCG, AGAIN!!!! You have dropped the ball and allowed others to pick it up and take the conversation elsewhere. So refocus! Next week would be a good time to start.
Unfortunately the sale of Teresa has become front and centre of most peoples thoughts but these same people seem to forget the very reason they invested in Linc in the first instance. What attracted us all to Linc was UCG but it's now these non core coal assets that everybody is getting their nickers in a knot over.
These non core assets have also become the focus of the media and the only people that benefit from such nonsense are the "shorters" and others with similar agendas.
Maybe it's time to refocus our attention on the CORE business which is UCG. The funds from any non core asset sales are not immediately required and Linc have ample cash to begin their SA work and cover other capital requirements over the course of the next 12 months at least.
By all accounts the Chinchilla plant is producing 5bpd of higher than expected quality liquids and has been doing so non stop since commissioning. So maybe it's up to Linc now to get everybodies attention directed back towards UCG and what UCG means to Lincs future.
These non core coal assets, if not sold, are still assets and have a value far greater than Lincs current market cap. The cash would be great NOW but that may not be possible. Or at the very least we could take a hair cut on the initial $1.5 billion offer and receive somewhere closer to $1 billion. That will do me just fine. But if all else fails, we still have a ****e load of coal that is very valuable and will become more valuable the further we progress into 2009.
Its been a rough few months to say the least.
Here's a message for Linc,
STOP TALKING TO THE MEDIA ABOUT NON CORE ASSETS AND START TALKING TO SHAREHOLDERS ABOUT UCG, AGAIN!!!! You have dropped the ball and allowed others to pick it up and take the conversation elsewhere. So refocus! Next week would be a good time to start.
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Pigsy
I tend to agree with your comment regarding media exposure.
I have observed PB loves to speak with media (sounds similar to Alan Bond - not related I hope, Andrew Forrest style) with less coherence to what market and share holders will infer from his speech.
If we follow his statements for last few months - a little done gets ballooned before the media and market. When he will learn that some times keeping mouth shut help to chew up the food than talking mouthful.
His making reference on noncore assets was IMO totally out of context and since he is not immune like politicians - should have refrained to comment on that.
PB should also question how could media dare to publish something from his interview which affects market so much and requiring halt. Conservation of words is a must for all CEO specially those who are making gas from coal unlike those making metals from ore.
Technically LNC is such a wonderful project, rising concept (as many big companies are all doing their own research to move into CTG - sorry can not name due to confidentiality agreement) so LNC has a competitive advantage if used properly to the favour of LNC shareholders.
Let us see the discounted surprise on Monday
PS : I do not hold LNC . Surprisingly noticed that we are often forgetting to declare our interest on holding . But that is not my job
Agree with most of what you say, Select. But I know from visiting the Chinchilla site with other shareholders in Nov 08 that they haven't been producing diesel continuously since mid Oct.On our visit they had closed production for about 2 weeks to adjust some "piping issues". They may also have closed down over Christmas/New Year.
PB has said yesterday "As stated in its announcement of 23 December 2008, the Company is continuing to aggressively work towards completion of the sale of its Emerald (Teresa) tenements in February 2009 and will provide a further update to the market at the appropriate time."
Hopefully, he can announce a definate sale by the end of this month AND advise on timetable for commercial plant in Sth Aussie.
As previously stated, I am a holder.
I was a bit too liberal in my reference to liquids being produced non stop since commissioning.
They have been producing GAS from generator 3 non stop since commissioning and are producing 5 bpd of liquids from the GTL plant. I have no reason to doubt that they have stopped producing liquids on the odd occasion because they are continuing to make improvements to the mechanics of the GTL plant in order to improve its efficiency which would require shutting it down.
Currently they are developing generator 4 which will be the full scale panel that they will be using for commercial production.
Happy to hold
