LNC - Linc Energy

[Mickel]

According to speech content of CEO, I think sale outcome will exceed 1.5b. If it is true, do you think stock price can reach $5 in a short time?

Peter Bond's statement- “We’re quietly confident of a strong outcome.” - in my view, would equate to around A$1B for the Teresa tenement. Anything over that would be a bonus.
With around 465m shares, A$1B would equate to about $2.15 per share. However, the A$1B also provides the full financing for the gas to liquids commercial plant in Sth Aust. This would add more value to the S/P but I don't consider the P and L figure from the Analyst's report can be used until the plant is operational.

With a billion $ sale I would be happy with a $4 to $4.50 S/P in the short term BUT, "Show me the money first", with a hard and fast sales contract.

 

[mexican]

Here is the article in the States, that Bondy mentioned in the asx response.

http://www.reuters.com/article/pressRelease/idUS148274+15-Sep-2009+BW20090915

 

[Mickel]

Article in The Australian today states in part-

Mr Bond told The Australian yesterday the sale was a two-tier process, which included the bidder's statement before moving into detailed negotiations.

"We are just concluding the first bidder's statement, where we have had a number of good bids on the coal assets, and we are moving into the second phase, where we get into the detailed negotiations," he said.

And again-

Mr Bond said news flow around the sale of the assets had always been a strong catalyst for the stock and the company.

"We are aware of that and that is why we are working hard to fulfil the outcome," he said, adding it was likely to be up to five weeks before an announcement was made.

"I can't help what happened with the global financial crisis and I can't help what happened with China. I know what is happening in reality and I know (the asset sale) is going to happen."

The chief executive said he was happy to let the UBS process run.

"It's a good strong process and I'm content to see it roll out over the next few weeks.

"It was always going to be a three to four-month process and it is headed in the right direction."

Link- http://www.theaustralian.news.com.au/business/story/0,28124,26088310-5005200,00.html

As I said in a post last night- Show me the money in the form of a hard and fast contract before we start realising S/P increases.

I'm a long term holder.

 

[grace]

It seems PB has had his mind on other things of late...squabbling over a $10 000 cleaning bill to go to the supreme court with the old owner of his Fig Tree Pocket mansion on the Brisbane River. What's $10k, when it cost $9.5mill. Apparently, when he took over, he could still see footprints on the floor.......CM today.

 

[Nero64]

"We are aware of that and that is why we are working hard to fulfil the outcome," he said, adding it was likely to be up to five weeks before an announcement was made.

LOL!

PB likes putting timeframes to things but he rarely keeps the schedule.

Anybody buy in at $1.40?

A day or two before Sept the 4th the share price fell to $1.37. Was going to buy in but didn't want to tie it up and wait another unknown years for the sale.

 

[Jonathan111]

Anybody buy in at $1.40?

A day or two before Sept the 4th the share price fell to $1.37. Was going to buy in but didn't want to tie it up and wait another unknown years for the sale.

Yeah i bought some for my 11 month old son at 1.365 holding very long term (5 - 10yrs)

I bought some for myself at 1.385 and then some more at 1.41. (medium term 6 months - 1 year)

I also bought a small parcel at the end of the day, last friday at 1.675 (hold for up to 2 months, target $2.20 - $2.85[BBY target] )

 

[Mickel]

LOL!

PB likes putting timeframes to things but he rarely keeps the schedule.

Anybody buy in at $1.40?

A day or two before Sept the 4th the share price fell to $1.37. Was going to buy in but didn't want to tie it up and wait another unknown years for the sale.

I bought some more at $1.35 on 12/8 as I wasn't sure I'd get as many as I wanted at $1.40 and grabbed the discounted price while I could.

S/P up 15c today to $1.88 without any announcement. Any ideas???

 

[Kalvin]

Yes, I bought in serially from 1.38 to 1.42, and am glad the analysis supported this approach! My analysis suggests resistance at 2.25, but I suspect it now has sufficient momentum (with the push from California, amongst other places for green sources of energy that underground coal gasification projects provide) to blast straight through this.
We will see.

 

[laperouselad]

S/P up 15c today to $1.88 without any announcement. Any ideas???

Hi all... my first post and I love the site....been rock spidering for a while! Mickel, with a bit of luck the SP will go up another 15c tomorrow. (I have a few shares and bought in the SPP) One thing I am interested about, and I have been following this thread for a little while, is that the SP dropped a bit when the Chinese coal sale fell through, but it had been out of favour for a while (I note the SP was $5+ exactly a year ago). Is the 12mth drop heavily due to the GFC rather than the recent tenements sales or are there other factors? And now that Mr Bond has signalled the coal sales are imminent, are these recent SP jumps a sign that LNC is headed back to $3 plus in the relatively short term? I would be interested in opinions.

As for you question Mickel, is the fact that the SPP is done and dusted a reason for these sudden rises?

 

[laperouselad]

....oh, and another thing, are any of you LNC people jumping on the CXY bandwagon? They, too, are in the middle of a SPP and comments from the CEO (who I understand had a previous affiliation with LNC in one from or another) imply that they are undervalued by the market. CXY has its own page, but I am interested in whether LNC people know about this company....

 

[ColB]

Welcome Laperouselad!

In regard to your last 2 posts I offer you my perspective on the company LNC.

The GFC was a huge factor in LNC's crash from $5 plus back to a low of sub $1 due to the price of oil falling from a high of $150 ish back to a low of $30 ish.

LNC's technology to produce Gas to Liquid (GTL) will cost them in the vicinity of $28-38 a barrell so you can see when the price of oil crashed their product was not really viable.

Now that we're back at $68-70 per barrell it's a different story.

Their set up costs to build the GTL Plants are huge and the original heads of agreement with a Chinese company to sell their coal assets at $1.5 Billion dollars fell through due to the GFC and the value of their coal dropping by at least half.

They have since proven up further coal reserves and now not only the Chinese are looking for further coal supplies but India as well.

The coal sale is in the negotiation process where an unknown number of bidders have taken part and it is only a matter of time before the big announcement comes out and that is one of the main reasons for it's recent SP rise as investors/speculators want to get on board before the announcement.

My guess is that the SP will rise somewhere between $1 and $2 as a result of the sale but that is purely speculative. Some on this forum have given an educated valuation using certain formula that suggests a similar rise.

LNC have great assets in Sth Australia, QLD, Wyoming (USA) and JV and MOU with Chinese, Vietnamese and US based companies.

They have a solid future with one of the main drawbacks being the huge movement against the coal industry in general worldwide.

LNC have their own Laboratory for a number of reasons one of which I'm fairly certain is the research into carbon capture and storage. Many have tried and many are still trying to refine that technology to adhere to target emissions set by government and other bodies. If LNC get that right it another huge plus.

Looks like you've got your wish today with another 13-15c rise in LNC's SP.

As for Cougar Energy (CXY), another good story in the wings as it develops it's Kingaroy Power Station in QLD over the next 12 months or so. We need those income producing assets to make us rich

I bought a heap of CXY at .096 the day before it went into a trading halt. Had the opportunity on the day of purchase to turn over at .099 but was greedy and hanging out for more. After trading halt it opened up around .083 and my parcel was looking ugly but as you can see now it's back around what I paid for it.

Hang on for the ride with both

Regards ColB

 

[Mickel]

Hi all... my first post and I love the site....been rock spidering for a while! Mickel, with a bit of luck the SP will go up another 15c tomorrow. (I have a few shares and bought in the SPP) One thing I am interested about, and I have been following this thread for a little while, is that the SP dropped a bit when the Chinese coal sale fell through, but it had been out of favour for a while (I note the SP was $5+ exactly a year ago). Is the 12mth drop heavily due to the GFC rather than the recent tenements sales or are there other factors? And now that Mr Bond has signalled the coal sales are imminent, are these recent SP jumps a sign that LNC is headed back to $3 plus in the relatively short term? I would be interested in opinions.

As for you question Mickel, is the fact that the SPP is done and dusted a reason for these sudden rises?

Congrats Laper... on your prediction of a 15c rise today. S/P currently up 14c in the first hour.

Also, I think you're right about the change in investment sentiment,SPP done and dusted, and imminent coal tenement sales. These 3 things together plus the fact the coal sales should fully finance the commercial plant construction could ignite the rocket fuse.

Blast off should occur when a definite sales contract is signed and probably overshoot the previous high.

 

[awg]

I am a long term trader and holder of this stock.

A true believer in the future of this technology

one thing is this company has a history of overly optimistic anns, which I believe to be one reason it has been oversold

before the capital raising, ( i took part, and bought more before at below $1.40) and they were starting to look a little short of ready cash.

If you hunt back thru this thread you will see some good analysis estimating NAV of $3 to $3.50 conservative per share, if they sell coal tenement for 1B to 1.5B

Their projected cost of diesel/avgas is $30 barrel, so with oil prices stabilising around $70 things look more optimistic.

another reason they tanked is their has been a definite paucity of info on how the refining technology is working out, unlike CNX, which I also hold, up more than 100%.

I think the Chinese overplayed their hand, hoping to buy at firesale,( and you cant really blame them for trying as the total value of the company was well under $1B at SP of $1.38) now India is on the hunt for coal, they will have to pay a reasonable price

 

[Mickel]

P Bond's statement to The Australian- refer my post on this thread 18/9- that it is likely to be 5 wks before an announcement is made on coal tenement sales (ie late October), coincides well with his ASX statement of 24/8 where he stated "Linc Energy remains committed to completing an initial resource statement in accordance with the JORC Code by November." This is in relation to the Galilee tenement.

This timing would allow for a combined sale announcement of both Teresa and Galilee tenements. With a target resource of 5B tonnes for Galilee any combined sale price would be massive.

Given that no adverse sentiment in the market happens over the next month,
I think LNC's S/P will continue to move up in expectation of a confirmed sale, whether for Teresa alone or combined with Galilee.

 

[SUNYA2006]

P Bond's statement to The Australian- refer my post on this thread 18/9- that it is likely to be 5 wks before an announcement is made on coal tenement sales (ie late October), coincides well with his ASX statement of 24/8 where he stated "Linc Energy remains committed to completing an initial resource statement in accordance with the JORC Code by November." This is in relation to the Galilee tenement.

This timing would allow for a combined sale announcement of both Teresa and Galilee tenements. With a target resource of 5B tonnes for Galilee any combined sale price would be massive.

Given that no adverse sentiment in the market happens over the next month,
I think LNC's S/P will continue to move up in expectation of a confirmed sale, whether for Teresa alone or combined with Galilee.

Last two times in falling negotiation with Chinese Mining company to sell Teresa asset , LNC had quotation of 1.5 billion. This time sale asset includes 3 coal assets and PB has already said he believed a strong outcome will be achieved. Do you believe sale price can reach 2 billions or even more?

 

[Mickel]

Last two times in falling negotiation with Chinese Mining company to sell Teresa asset , LNC had quotation of 1.5 billion. This time sale asset includes 3 coal assets and PB has already said he believed a strong outcome will be achieved. Do you believe sale price can reach 2 billions or even more?

I think it was only the first MOU with the Chinese that $1.5B was mentioned for Teresa. The Pentland asset is quite small in comparison and one analyst suggested its sale could involve delayed payments. Check the analysts reports on the Linc website.

However, with a combined sale of Teresa and Galilee, and IF the JORC statement for Galilee comes up to expectations, the sale price could easily exceed $2B IMHO.

 

[Kalvin]

A 10 SP is a big call from a baseline of 1.40, especially given the highest share price the stock has ever achieved is <$6.00. Stranger things have happened and UCG is sexy right now, but its a stretch. I'd say 2.50 within 2 weeks and 5.00, tops, within 6 months would be more realistic from an analytic perspective, assuming Don Voelte's comments about UCG aren't generally thought correct. And they may well be.

 

[laperouselad]

A 10 SP is a big call from a baseline of 1.40, especially given the highest share price the stock has ever achieved is <$6.00. Stranger things have happened and UCG is sexy right now, but its a stretch. I'd say 2.50 within 2 weeks and 5.00, tops, within 6 months would be more realistic from an analytic perspective, assuming Don Voelte's comments about UCG aren't generally thought correct. And they may well be.

From Kalvin's tone, I get the impression that he is endeavouring to temper some of the unbriddled enthusiasm for this stock. Lets face it, surely, if the SP was "guaranteed" to reach even $2.50 in 6 weeks(based on the sale of coal tenements), wouldnt analysts be jumping all over it and advising clients to buy? I except the majority of those following this thread are converts to the Linc story but is there a risk of 'groupthink' here, tending to be over positive? I got smashed in the GFC following the advice of experts so I am now ultra synical... I like this stock but if it were about to explode, wouldnt it be going up now and not backwards, like it did today? Oh, it's lateish and I have been drinking....

 

[Kalvin]

Hi,
Don't get me wrong, I love the concept of ugc and love LNC, and hold a lot of this stock (as well as CNX), and would love to see it hit 10.00 in a week or so. I am just pessimistic that it will do so, and also take Don Voelte's (WPL's CEO) that natural gas, of which we have truckloads, is cheaper. And cheaper, in this context, means less energy required to extract / utilise it. We'll see...

 

[Nero64]

I think the surprise factor is taken out of this stock. It's like the boy who cried wolf, and PB has cried sale for the last year or so.

Maybe the institutions will accumulate when more certaintly is made public to the market and not just some quote from the Newspaper.

I like to compare Linc with other companies in the market. Two come to mind. maybe others here can think of some other sales

NHC which sold itls New Saraji coal assets for 2.45B. It's sp went from $1.50 or so to $5. It has 800m shares listed.

AJL whcih sold its Gloucester basin CSG assets from 370M. It's shares went from $3-$5. It only has 66M shares listed.

LNC after its capital raising has 65M in cash. It has 460M shares listed.
Assuming the sale generates 1B-1.5B I see it being capped to below $3, because it still is essentially a producer of a non mainstream product. Its UGC technology has not won it any big contracts hence it does not have stable earnings. Long term I don't know what the price would be. That depends on the popularity of UCG.

My plan is to accumulate in bits and pieces under $2 then pounce when the sale is final. Maybe then exit with a profit and leave a core holding for the future in case it goes beyond $3.