LNC - Linc Energy

[glads262]

Perhaps the chinese company Xinwen are awaiting the outcome of the RIO/CHINALCO deal before agreeing to LNC's price for the coal tenements.

If some reports, that the deal is unlikely to go ahead, are confirmed, then the chances of LNC wrapping up a good deal would seem to increase. Refer this story in Brisbane Times-

http://business.brisbanetimes.com.au/business/rio-shares-pounded-on-deal-worries-20090514-b3yv.html

I'm not sure this deal falling through would have much of an effect on anything.

China are out to get all the resources they can at the cheapest price at the moment.

Its not like the $20billion is a huge outlay of funds. China's foreign reserves are around US$2trillion, so this would be 1% of their available assets.

Perhaps, if the RIO deal falls through, it may signal to China that they need to offer more premium than they are currently for assets (but not much more)

But, LNC is still a fairly desperate seller, whereas RIO is no longer desperate.

 

[DowJones]

I got out of this stock at 2.20 when it had run up to almost 2.70

Only time will tell if it were a good decision. It has been giving up ~5% daily recently - slow attrition.

I'd still like this stock Long Term but locked in some profits in the Short Term.

 

[basilio]

Oil Prices: Norwegian Supply Falls; Is $100 Oil Far Away?
Norway, the world’s fourth biggest crude exporter, said Monday that its oil production fell a sizeable 7% in April to 1.99 million barrels a day last month from 2.15 million barrels a day in March.

Though preliminary, the data highlight one of the big underlying supply problems in non-OPEC states that many oil analysts believe is likely to send crude prices back over the $100 a barrel mark in coming years. Oil closed Friday at $58.63, its highest settle since mid-November. It is trading around $57.75 a barrel this morning.

The Norwegian situation is being replicated in other non-OPEC oil producers, such as Mexico and the U.K. These regions are mature and giving up less oil, meaning that keeping production flat is getting harder and harder.

If analysts are right, this underlying supply struggle will keep oil prices relatively strong in coming years.

http://blogs.wsj.com/environmentalc...s-norwegian-supply-falls-is-100-oil-far-away/

If you have been wondering if LINCs coal to oil model looks like a winner you should consider the above report.

Oil supply is collapsing around the world. Mexico's output is falling rapidly ditto UK and Norway. And this is happening over a relatively short time frame of months and a few years at the most.

It won't be long before output falls to the current (depressed) demand levels - and then keeps falling. If LINC has its plants operational by then it will be one of the relatively few companies to do well in a an energy constrained world.

That unfortunately is the clear but bleak vision of Peter Bond and why he is so furiously buying appropriate coal reserves around the world and banking on his technology to produce diesel at approx $30 a Barrel.

 

[The Dealer]

Been a big fan for a while now and still hold but just sold off a bit.
Reason why!
I just recently listened to a conference by (wont name the company) about their resource long short fund. They then took questions and I asked about Queenslands CSG (not fans by the way) and then LNC specifically. They knew all about it. He said why would you put money into something right now that has to wait for a plant to be built before you get a return. After the GFC you can buy top quality oil produces at below replacment cost and don't have to wait for a plant to be built. Then when oil rebounds you will be selling to market straight away. I thought it was a good point.

 

[dirkdiggler444]

Hi Dealer, just interested in this situation your posting about, you went to a conference where a company gave their viewpoint about whether certain shares should be in their fund or not.

If they were happy to give this info to the public via a conference medium, why not post their name??

I mean they put the info out there, they said it, you're simply saying they said it, so its not like you're lying about them. You're telling the truth, so why not post the company name? Even if its not true, are we to limit what we post about to only info we can immediately verify somehow?

I see this a lot and I find it a bit confusing as to why some things are basically censored. I like to make up my own mind.

 

[ColB]

Originally posted by The Dealer...

Been a big fan for a while now and still hold but just sold off a bit.
Reason why! I just recently listened to a conference by (wont name the company) about their resource long short fund...."

Sold a day early Dealer! Up 9%. Don't feel bad, I picked up another 20 thousand shares last week at $2.39 only to see it drop to $2.05. Just waiting for that announcement.

Originally Posted by DirkDiggler444...

"...If they were happy to give this info to the public via a conference medium, why not post their name??

Dirk still waiting for a response

 

[Nero64]

Don't feel bad, I picked up another 20 thousand shares last week at $2.39 only to see it drop to $2.05. Just waiting for that announcement.

Hope you're right Col. That is a lot to wager on. I wouldn't put my faith on just one deal going through especially when the CEO is procrastinating on the sale dates. I have noticed LNC becoming a trading stock now, up and down in a 50c range. All ranges break sooner or later.

 

[The Dealer]

WT
http://business.theage.com.au/business/coal-gasification-is-gathering-steam-20090524-bjh4.html

"Linc's chief operating officer Stephen Dumble said that would require a billion-dollar investment. He said Linc would conduct a full feasibility study next year on a commercial plant, with a final investment decision in 2011."

That's scarry!!
I thought the sale procedes were to fund the plant??
I'll help all you long term holders out by selling right out now and buying back in at a $1. I'm always wrong!

 

[glads262]

WT
http://business.theage.com.au/business/coal-gasification-is-gathering-steam-20090524-bjh4.html

"Linc's chief operating officer Stephen Dumble said that would require a billion-dollar investment. He said Linc would conduct a full feasibility study next year on a commercial plant, with a final investment decision in 2011."

That's scarry!!
I thought the sale procedes were to fund the plant??
I'll help all you long term holders out by selling right out now and buying back in at a $1. I'm always wrong!

Dealer, it was always going to require a billion dollar investment.

Plans are - that the billion dollars will come from asset sales. That is why nothing much is happening at the moment. They need to bed down the funding first, then proceed to feasability and FID. They wouldn't spend money doing the feasability study if they did not have the cash to complete the project.

At the moment - sourcing the billion dollar investment from equity is not going to happen. Hence, waiting waiting waiting for that asset sale to move this company to the next stage.

 

[ColB]

Near on 400,000 shares traded after close when only 200,000 had sold up until 4pm. Was heading for a $2.04 - $2.05 finish with after market purchases pushing price to $2.11

Surely the announcement re coal tenement sale is just around the corner

 

[Mickel]

Perhaps the chinese company Xinwen are awaiting the outcome of the RIO/CHINALCO deal before agreeing to LNC's price for the coal tenements.

If some reports, that the deal is unlikely to go ahead, are confirmed, then the chances of LNC wrapping up a good deal would seem to increase. Refer this story in Brisbane Times-

http://business.brisbanetimes.com.au/business/rio-shares-pounded-on-deal-worries-20090514-b3yv.html

I'm leaning more strongly towards this view now. No facts to base it on, just a feeling. At least no deal announced for LNC/XINWEN before the Treasurer rules on the FIRB for RIO/CHINALCO matter which I understand will be by June 15.

Patience ! Patience !

 

[Gunter]

I'm leaning more strongly towards this view now. No facts to base it on, just a feeling. At least no deal announced for LNC/XINWEN before the Treasurer rules on the FIRB for RIO/CHINALCO matter which I understand will be by June 15.

Patience ! Patience !

Any thoughts on what is going to happen now since the RIO deal has fallen through?
Maybe they are likely to announce soon now or perhaps delaying the announcement til after June for tax reasons?

 

[Mickel]

Any thoughts on what is going to happen now since the RIO deal has fallen through?
Maybe they are likely to announce soon now or perhaps delaying the announcement til after June for tax reasons?

In my view, the Chinese are more likely to move quickly to buy these coal tenements. They now no longer have to worry that this foreign purchase of mineral assets could damage delicate considerations with the RIO deal, which was the main Chinese focus.

My view only, and I am a long term LNC shareholder.

 

[ColB]

A few nerves creeping in today. SP Sold down to 1.915 and was rallying back up toward a $2 close. 200,000 sell order came in at close of market to push SP back to 1.945

What with the exceedingly long winded delay of possible coal tenement sale announcement we don't need too many more days like this

 

[DowJones]

I sold my LNC shares a while ago - I thought the $2 price was always the support line. I think until the announcement it may be the resistence now.

Seemed a big seller lost his/her confidence or patience (opened ok today due to the crude oil price movements lately). I still like Linc long term.

 

[RP_Automotive]

I agree people would be at whits end....I'm thinking of taking my profits and putting them elsewhere....but I'm trying to stay for the long term. I think it will continually go 'stail' untill something is announced. Lets hope they come up with something soon,.

 

[The Dealer]

I see that BHP has accepted a 58% price cut in coal from 2008 price.
Will that apply to LNC coal sale??

 

[luckypaul]

To try and keep the faith I thought I would try and do some simple maths. Back in September 2008 Linc announced the Teresa tenement sale to Xinwen for AUD 1.5 billion. At this time the JORC statement for Xinwen stated 470 million tonnes of thermal coal. At this time the USD price for thermal was approx USD 163 per metric Ton (source http://indexmundi.com/commodities/?c...lian&months=12 ).

Since then Linc has updated the Jorc statement to 852 million tonnes (approx +85%) but the price of thermal coal has plummeted to USD 65 (same source - March was the low). That is approx -60%.

Now I am not technical, not normally into coal and certainly not the mathematian that some of you are but AUD 1.5 billion + 85% - 60% = AUD 1.1 billion (very approx). To complete this logic I need Jorc statements for Galilee and Pentland (and some idea of what type of coal they hold as it may not be themal and therefore may be priced differently). Has anyone seen that information anywhere??

Ladies and Gentlemen..remember the above I posted back in May 13th, 2009 in a sad attempt to work out a possible deal price for the 3 coal tenements???

My rough logic estimated a AUD 1.1 billion price for Teresa (852 million tonnes based on their Jorc of that time) adjusted from the original sale offer and adjusted down for coal price drop but up for Teresa Jorc update....Well, the latest release from Linc http://www.asx.com.au/asxpdf/20090612/pdf/31j12s0m5ntb2n.pdf estimates 3-3.4 BILLION Tonnes for Galilee!!! I'll leave you to do the maths as I am too excited to type!

This appears to be FANTASTIC! Only downside I can see is that the whole stockmarket is about to plunge again while us faithful hold on to their Linc stock waiting for more holes to be drilled so a final deal price can be announced!!!

Note: I am a long term, frustrated (and now excited and frustrated) holder. :

 

[luckypaul]

OK - I did the maths...

Based on my original estimate (which nobody commented on as incorrect or daft), my guess of a revised AUD 1.1 billion for 852 million tonnes of Teresa coal means that the coal costs AUD 1.29 billion per billion tonnes.

Low Galilee (3 billion tonnes) plus Teresa (852 million tonnes) plus Pentland (zero as no estimate available) = 3.852 billion tonnes.

3.852 x 1.29 = AUD 4.97 billion. It was previously estimated that the cash price per Linc share was $2.4 per billion which would give us a CASH PRICE PER LINC SHARE of AUD $11.93.

Please note: These are my ROUGH estimate and most figures used are my estimates too (although you can see my logic in this and the previous post). Also be aware that I have used lower values where possible too and there are still some unknowns - like Pentland, exact coal price (which is now rising) etc. Feel very free to correct me here.

Still Holding but now very, very excited.

 

[The Dealer]

OK - I did the maths...

Based on my original estimate (which nobody commented on as incorrect or daft), my guess of a revised AUD 1.1 billion for 852 million tonnes of Teresa coal means that the coal costs AUD 1.29 billion per billion tonnes.

Low Galilee (3 billion tonnes) plus Teresa (852 million tonnes) plus Pentland (zero as no estimate available) = 3.852 billion tonnes.

3.852 x 1.29 = AUD 4.97 billion. It was previously estimated that the cash price per Linc share was $2.4 per billion which would give us a CASH PRICE PER LINC SHARE of AUD $11.93.

Please note: These are my ROUGH estimate and most figures used are my estimates too (although you can see my logic in this and the previous post). Also be aware that I have used lower values where possible too and there are still some unknowns - like Pentland, exact coal price (which is now rising) etc. Feel very free to correct me here.

Still Holding but now very, very excited.

Was just about to sell my last 20000 out this morning then this. Just doubled up!
We just needed this news to restore some confidence that they aren't standing idle