LNC - Linc Energy

All too quiet!
Is this the clam before the storm?
Low volumes. Small pull back. Will we see a Christmas Rally?

The Dealer said:

Is this the clam ...?

Click to expand...

I'm feeling really disappointed about Linc at the moment. The excitement about funding the project through sales of the thermal coal have been running since Sept 2008. The assurances and reassurances that the sale is around the corner keep on coming. At the moment the stock looks like a plaything for day traders rather than a well considered long term industrial giant.

Perhaps investors do need to see a bigger picture view that outlines how Linc will achieve it's goals over the next 2-5 years. (Or have I missed it ?)

Basilio
I was just talking to a friend re linc and their possible strategy.
If I had technology that can do what Linc says it can. I would be a fool to tell the world until I have secured all the cheap coal I can before I go commercial.
Reason, if I had a coal deposit worth nothing as it is trapped or in a desert, then someone came and said to me, I can turn it into a trillion barrels of oil and I want to buy it. My price on that trapped coal just went up double.
So I think that PB must be securing coal and gas tenements’ round the globe and then, like he said in the newsletter the asset sale is still there in the ground, it hasn't blown away or been lost. I think once all those matters have been secured a sale and commercialisation project will be under way.
My other observation is that the volume is very light, could put it down to Christmas trade or like me, not selling as announcement imminent.

The Dealer said:

Basilio
I would be a fool to tell the world until I have secured all the cheap coal I can before I go commercial.

Click to expand...

LINC ENERGY have aquired more acerage in the US, a small dilution to pay for a possible huge gain, once UCG or GTL starts to operate commercially.

"Linc Energy now holds more State coal leases than any other company, with a coal acreage footprint of 173,327 acres. This puts Linc Energy into a very strong position to undertake commercial UCG operations in Wyoming and move quickly to the construction of a commercial Gas to Liquids facility in the USA."

"As such, this coal acreage provides the Company with a number of opportunities to exploit both the deep coals by UCG and shallower coals by traditional extraction methods with an appropriate partner."

Price action paused at resistance - with increased volume & indicators not too shabbie. Breakout today with volume

Daily chart: Breakout today with increased volume

ectoplasm said:

Price action paused at resistance - with increased volume & indicators not too shabbie. Breakout today with volume


Daily chart: Breakout today with increased volume

Click to expand...

Closed at 1.735 today good spotting!

Yanzhou looking for more coal

http://www.smh.com.au/business/yanzhou-sets-sights-on-more-acquisitions-20100106-ludw.html

http://i289.photobucket.com/albums/ll213/kenbol/lnc.gif robbbbbbb HC

"In its first purchase, LNC paid A$6.2m for GasTech coal leases with non-jorc exploration targets of 7-8bt. That isnt even one tenth of one cent per ton." Bleasby HC

AFC energy bolted up over 40%
Also good moves by OEL and BPT looking good.

Jonathan111 said:

Closed at 1.735 today good spotting!


"In its first purchase, LNC paid A$6.2m for GasTech coal leases with non-jorc exploration targets of 7-8bt. That isnt even one tenth of one cent per ton." Bleasby HC

Yanzhou looking for more coal

http://www.smh.com.au/business/yanzh...0106-ludw.html

http://i289.photobucket.com/albums/ll213/kenbol/lnc.gif robbbbbbb HC



AFC energy bolted up over 40%
Also good moves by OEL and BPT looking good.

Click to expand...

After some consolidation music LNC is stepping higher. I agree with Rob's initial target of $2.00, lets see what the year brings for higher ...

Nice turn around for Linc Energy just now. Must be a news release imminant. Now up 4.5% after being doiwn a similar amount

Flood threat passes for central Qld:
http://news.smh.com.au/breaking-news-national/flood-threat-passes-for-central-qld-20100131-n5wm.html


"Galilee is having the back drilled out of it right now with ECU, Blue Energy, Westside, Comet Rigde and Linc all with rigs up there at the moment; and I am sure there are a few others as well." (SF, HC, 31/01/2010)


http://www.bom.gov.au/products/IDR221.loop.shtml#skip

http://www.bom.gov.au/products/IDR561.loop.shtml#skip

IPOs...
Is Palmer the likely bidder? Yanzhou? I bloomin well hope so! & that it happens soon and unexpectedly!

http://www.miningaustralia.com.au/Article/Palmer-float-postponed/509848.aspx

That was a real shakeout today. I think it's time for Linc to close a deal, get the cash and start producing and selling diesel as fast as it can. Sitting around with a huge resource base worth potentially billions will not cut any ice if/when cash dries up.

Lets go...

I can offer a reason for the huge volume jump today.
If you are a subscriber to Aussie small caps they trail stop on it for $1.40. So i put in a buy order for $1.40 hoping that all the fools who put in a sell at $1.40 would all be hit and today was the day. I would expect more to panic and sell more toorrow for less.

I went to one of the Limelight series of presentations this evening in Melbourne. This is essentially a series of show and sells Linc is doing around the country as part of its promotion and selling itself to the share analysts who make decisions about which companies their clients should invest in.

They had a number of top executives presenting. Kobus Terblanche, General Manager for the Gas to Liquid plant discussed the technical issues of successfully developing the UCG and GTL aspects of the project. Matthew Buchanan as Manager for Environmental Affairs was enthusiastic about the low environmental impact the project would have compared to above ground developments. Anton Rohner as Chief Financial officer offered an overview of how Linc would be keeping all the balls in the air in it's development of commercial plant in South Australia.

What did I take away from the night? In no particular order...

1) Everyone is (obviously...) waiting for the sale and cash settlements for the Galilee tenements. It feels as if Linc is being strung out in the negotiations and that Peter Bond is determined to get what he believes is a fair price for the tenements.

2) There are a number of Plan B,C,D's ect being developed to bring in the cash that will be required to fund ongoing operations if Galilee is still waiting in the church in six months time. There can be no if's or buts about these plans. No cash, no company.

3) There is a new emphasis on the initial development of the UCG processs in South Australia and then establishing a large power station to feed electricity into the grid. This seems to make good sense because
a) it is considerably cheaper than the full GTL plant,
b) The technology is well proven and offers less risk of engineering problems
c) Selling electricity quickly into the grid would be an instant money earner and probably more likely to attract an appropriate partner
d) The greenhouse gas savings possible with the UCG process and gas fired generator (versus coal ) would make this an attractive proposition to governments and power companies.

4) There is certainly a ramping up of staff in Linc to develop the SA project and everything else. Of course this all costs money which focuses everyone even more keenly on just how good are Plans A-D in keeping the company solvent.

5) The technical processes involved in establishing best practice in UCG at Chinchilla are improving all the time. Gas Generator 4 has just gone on line with a host of improvements. I don't think anyone should underestimate that getting the engineering side well and truly sorted out is not a given and if things aren't well done there will be some nasty surprises.

6) It seems that the GTL plant is a good 4 years away. So don't hold your breath wanting to fill your diesel powered cars out of the Linc bowser.

The evening was recorded so I imagine there will some sort of presentation coming out of the Linc website in due course. (hint,hint..)

One thing I found interesting was a complete lack of any financial analysis of just how profitable Linc could be. Here we were with a room largely full of analysts and the focus was on why this was such ground breaking technology, and how good Linc was at making it all work. When the question was asked afterwards Anton said they were waiting for final figures on the costs of establishing plants before restating any financial projections.

Overall it was a very interesting and enjoyable evening. Great feed and drinks for those who care for that sort of thing... (which included me..) A good opportunity to talk with senior management who were certainly interested in being available to all who attended.

I hope that the main intention of the evening - selling Linc to the investment community - was successful. I'm sure as time goes on and management reflect and refine on the message they want to get across, the investment community will recognise the potential value that Linc offers and act accordingly.

There are a further 12 Limelight presentations around the country this year. Well worth a squiz. I have attached the link to the website detailing where and when.

http://www.lincenergy.com.au/eventscalendar.php

The Dealer said:

I can offer a reason for the huge volume jump today.
If you are a subscriber to Aussie small caps they trail stop on it for $1.40. So i put in a buy order for $1.40 hoping that all the fools who put in a sell at $1.40 would all be hit and today was the day. I would expect more to panic and sell more toorrow for less.

Click to expand...

Not sure that's the right way to play mate. You should estimate the number of subscribers, estimate their average position, and check out the market depth in volume terms where the price will be if all subscribers were to have their stops triggered.

No matter what answer you come up with from above, your buy order should be a fair way below $1.40 imo.

Great post Basilio,

Just wondering what's plan B,C and D. Did they mention or hint how Linc would go about raising capital for the South Australian projects?

I believe that is their main concern at the moment.

Might fly over to Sth Aust from Melb for their next presentation 24th feb.

basilio said:

3) There is a new emphasis on the initial development of the UCG processs in South Australia and then establishing a large power station to feed electricity into the grid.

Click to expand...

Where are they planning to put the power station relative to their coal resource / UCG production?

Pipeline the gas to Adelaide and build the power station there?

Or build the power station on site and transmit the electricity?

There are significant cost and other issues associated with the two options, including that the former opens up the possiblity of a greater market for their UCG gas - selling it to manufacturing industry, established power stations (of which there are serveral in the Adelaide city area) etc. For a company short on cash this would seem an option worthy of serious consideration.

skc said:

Not sure that's the right way to play mate. You should estimate the number of subscribers, estimate their average position, and check out the market depth in volume terms where the price will be if all subscribers were to have their stops triggered.

No matter what answer you come up with from above, your buy order should be a fair way below $1.40 imo.

Click to expand...

Totally agree. Setting your buy price so close to the stop sees you setting yourself up to pay above market rate in the event of gapping, and you are really trying to buy against the trend. Unless you have the cashola to absord every unit that comes on sale at $1.40 and avoid oversupply this strategy, IMHO seems frought with danger. Few folk make good $$$ buying against the trend. good luck though dude, considering your 1.40 is now above the current market price.

Quote:
Originally Posted by basilio View Post
3) There is a new emphasis on the initial development of the UCG processs in South Australia and then establishing a large power station to feed electricity into the grid.

Where are they planning to put the power station relative to their coal resource / UCG production?

Click to expand...

The UCG site is at Orroroo in SA about 90 klms SE of Port Augusta. It seems to be close enough to Adelaide and has good access to port and power transmission infrastructure. (this all comes from the December newsletter) . Apparently drilling to date has confirmed 1-1.3 Bill tonnes of coal. This appears sufficient to keep a 500 meg UCG power generation project PLUS a 20,000 bpd GTL plant going for 75 years.

It appears all the facilities will be sited at the drill site.

basilio said:

The UCG site is at Orroroo in SA about 90 klms SE of Port Augusta. It seems to be close enough to Adelaide and has good access to port and power transmission infrastructure. (this all comes from the December newsletter) . Apparently drilling to date has confirmed 1-1.3 Bill tonnes of coal. This appears sufficient to keep a 500 meg UCG power generation project PLUS a 20,000 bpd GTL plant going for 75 years.

It appears all the facilities will be sited at the drill site.

Click to expand...

Seems like a reasonable location for a power station.

There are two existing power stations at Port Augusta with existing transmission lines to Adelaide as follows. These are conventional coal-fired plants using coal from Leigh Creek mine which has limited remaining reserves.

Northern - 542MW nominal capacity (originally built as 500MW then uprated) from two units generally operating at full capacity with a modest reduction in output overnight. It commenced operation in 1985 and could still be considered quite modern and efficient in design and operation.

Playford B - 240MW nominal capacity from 4 units but it generally runs at half that or less due to the age and low technical efficiency of the plant. The plant was historically run much harder prior to construction of Northern and the transmission link to Victoria. It commenced operation in 1960 and has recently been subject to works to prolong its life.

Most notable features of the SA electricity industry are (1) relatively high use of wind energy (2) historic and present high reliance on gas (3) high proportion of total generation from plants located in the Adelaide metro area (4) exceptionally high daily variation in demand driven by air-conditioning load (5) marginal operating costs of established generating plant in SA are generally higher than that in Qld, NSW, or Vic due to the fuels used and the remote location of those fuel sources relative to Adelaide and practical power station locations.

I have been following this stock for a while, it is really based on the news, couple month ago they release the JORC code with good result and the price went up, they do have more confirm resources however without selling it, it won't have any help to the company, what i believe is until the coal sale confirm, the price will just go up and down with news regardless of what technology they have.