LNC - Linc Energy

[profitmann]

You could always just use the gas to run a CCGT plant (conventional baseload gas-fired power station operating at about 55% efficiency) instead. That's very proven technology and pretty easy to get approval for in terms of environment etc.

Yep....proven and can be done. Makes sense IMO to go do this type of power generation to create some cahsflow..

 

[Smurf1976]

Yep....proven and can be done. Makes sense IMO to go do this type of power generation to create some cahsflow..

For the record, Pelican Point (480MW, Adeliaide), Swanbank E (350 MW, near Brisbane) and Tamar Valley (205MW, at Bell Bay Tasmania) are examples of plants of this type in operation in Australia.

Another option would be a pipeline to an existing power station. For that to work, the price for the gas would need to be lower than conventional natural gas but it's a way to get some cashflow. Depending on the actual price of the gas, such a pipeline to the conventional steam turbine gas-fired plant (less efficient than a new CCGT plant and hence with higher costs) at Torrens Island (Adelaide) would change the economics of it from peak/intermediate load to baseload. That depends on the delivered price of the gas of course but it could be worth LNC talking to the plant's owners (I know for a fact that they've been interested in alternative fuel options in the past so as to improve the economics of the plant).

 

[basilio]

The good news and the bad news.

Good news is that LNC has ensured survival for at least 12 months with the $81m line of credit (whatever) Great.

Bad news is that they are still negotiating sale of the $1b plus coal tenements just as capital and investment markets are being seriously spooked over sovereign debt issues. Any bets that this will really crimp the sales? (Or could one offer a different perspective and say that investors will now view physical resources as more valuable than paper ones??

And finally. Perhaps today is a good time to close LNC shares in anticipation of some news? Could certainly avoid some pain.. (But how many times can you do that before the market smells a rat ?)

 

[bloubul]

Thanks Mr Rudd for wiping out 20% of the resources SP.

I know this is not a political forum but the impact this Super Profit Tax will have on investment in resource industry in Aus will be profound. I can't see how this tax is any different than Robert Mugabe nationalizing 51% of foreign companies in Zimbabwe.

bloubul

 

[basilio]

No doubt that the market will be butchered again today. There is certainly enough bad news coming to the front.

I think LINC has to review Plans B C and D again. At the moment it seems that progressing the GTL plant is dependent on a successful coal sale. I really wonder whether this can happen with the current upheaval in world markets.

In America the blowout of the exploration well in the Gulf of Mexico is a slow motion catastrophe. It will result in multi, multi billion dollars of economic and environmental damages. These have the potential to seriously hurt BP not to mention the American economy with obvious knock on effects to the rest of the world. (I wouldn't want to be an insurance or re -insurance company right now..)

I suggest that exploration in the Gulf of Mexico and most deep off sea platforms will also be stopped in it's tracks with all the implications for future oil supplies that entails.

So where does that leave LINC ? I suggest it is in theory an industrial stock with the capacity to turn a proven resource ( underground coal ) into a critical product - high quality diesel. There is still a significant risk factor in developing the large scale plant but one would hope that the last 12 months and ongoing research has sorted out most of the technicalities.

The prognosis for oil supplies is getting grimmer. We have already had a number of reports this year which point to inevitable reductions in oil output within the next 3-4 years as current large producers decline. Australia oil supplies are equally in decline

In that context there is a critical necessity to fast track coal to diesel production and ensure this industry does not fall over in whatever economic crisis may be coming.

This is definitely the time (IMHO...)for LINC management to look at other funding and partnership options to develop the GTL plant ASAP. Given the lead times involved and the clearly visible collapse in oil production in the next few years more delays could prove

 

[frankblack]

No doubt that the market will be butchered again today. There is certainly enough bad news coming
In that context there is a critical necessity to fast track coal to diesel production and ensure this industry does not fall over in whatever economic crisis may be coming.

This is definitely the time (IMHO...)for LINC management to look at other funding and partnership options to develop the GTL plant ASAP. Given the lead times involved and the clearly visible collapse in oil production in the next few years more delays could prove

did you mean, ensure this "company" does not fall over?
because if there is a real economic crisis again, the oil price will plummet making it harder for LINC. sounds like lose, lose.
and thats what is happening to the share price.

 

[basilio]

Re: LNC - Linc Energy
Quote:
Originally Posted by basilio View Post
No doubt that the market will be butchered again today. There is certainly enough bad news coming
In that context there is a critical necessity to fast track coal to diesel production and ensure this industry does not fall over in whatever economic crisis may be coming.

This is definitely the time (IMHO...)for LINC management to look at other funding and partnership options to develop the GTL plant ASAP. Given the lead times involved and the clearly visible collapse in oil production in the next few years more delays could prove

did you mean, ensure this "company" does not fall over?
because if there is a real economic crisis again, the oil price will plummet making it harder for LINC. sounds like lose, lose.
and thats what is happening to the share price

.

Good point. On one level I certainly want to see LINC stay solvent and profitable.

On the bigger picture however I believe it is critical for governments to recognize that traditional cheap oil supplies are rapidly and irrevocably collapsing and that coal to oil technology needs to be supported as one part of future energy supplies.

Your quite right that a collapsing economy could also collapse the oil price in the short term threatening Linc's investment. This doesn't make the market right - just very myopic.

 

[Nero64]

Linc hit 95c today. Anybody catch it? Talk about price extremes. Even If you could trade those 20% swings 4-5 times a year you would be laughing.

I suppose now is not a good time to release any news about the selling. I doubt the market will jump in.

 

[springhill]

So where does that leave LINC ? I suggest it is in theory an industrial stock with the capacity to turn a proven resource ( underground coal ) into a critical product - high quality diesel. There is still a significant risk factor in developing the large scale plant but one would hope that the last 12 months and ongoing research has sorted out most of the technicalities.

The prognosis for oil supplies is getting grimmer. We have already had a number of reports this year which point to inevitable reductions in oil output within the next 3-4 years as current large producers decline. Australia oil supplies are equally in decline

In that context there is a critical necessity to fast track coal to diesel production and ensure this industry does not fall over in whatever economic crisis may be coming

did you mean, ensure this "company" does not fall over?
because if there is a real economic crisis again, the oil price will plummet making it harder for LINC. sounds like lose, lose.
and thats what is happening to the share price.

A couple of points here, i have been on the UCG bandwagon for a while, now the CNX announcement of a well blockage.....
http://www.asx.com.au/asxpdf/20100303/pdf/31p1qky4srp7cc.pdf
I kind of let slide, but when CXY came out with virtually the same announcement.....
http://www.asx.com.au/asxpdf/20100427/pdf/31pzbrg0bjxyt9.pdf
I started to get concerned, hence sold completely out of CXY at 0.115 and took major profits on CNX at 0.50 and after reviewing the latest price movements it seems i definately made the right decision.
These faults may or may not affect LNC directly but seem to cast a shadow over the industry as a whole somewhat.
2 companies reporting the same faults within a month or so of each other? Hmmmmm
May have something to do with the LNC slip, as the same applies to CNX and CXY.
Would love to hear others thoughts.

 

[profitmann]

A couple of points here, i have been on the UCG bandwagon for a while, now the CNX announcement of a well blockage.....
http://www.asx.com.au/asxpdf/20100303/pdf/31p1qky4srp7cc.pdf
I kind of let slide, but when CXY came out with virtually the same announcement.....
http://www.asx.com.au/asxpdf/20100427/pdf/31pzbrg0bjxyt9.pdf
I started to get concerned, hence sold completely out of CXY at 0.115 and took major profits on CNX at 0.50 and after reviewing the latest price movements it seems i definately made the right decision.
These faults may or may not affect LNC directly but seem to cast a shadow over the industry as a whole somewhat.
2 companies reporting the same faults within a month or so of each other? Hmmmmm
May have something to do with the LNC slip, as the same applies to CNX and CXY.
Would love to hear others thoughts.

No problem with well blockages at Linc. Superior well designs taking into account the underground thermal expansions combined with their partnering with world wide recognised casing a well product manufacturers and suppliers. Their wells are not drilled on the cheap, they use the top products and have leading edge down hole technology. Blockages and the like will never happen in a Linc well. IMO the industry players need to take advantage of world leading equipment technology - something Linc is very good at.

 

[luckypaul]

Linc Announcement Today (Thursay 6th May)
http://www.vision6.com.au/download/...Affecting Linc Energy_s Coal Asset Sale N.pdf

ASX ANNOUNCEMENT / MEDIA RELEASE
6 May 2010

HENRY RESOURCE TAX NOT AFFECTING LINC ENERGY’S COAL ASSET SALE NEGOTIATIONS

Linc Energy (ASX:LNC) (OTCQX:LNCGY) announced today that the ‘Henry Resource Tax Proposal’ has not hindered its current ongoing coal asset sale discussions with most parties, stating the coal purchase is more about securing supply.

Recent valuations of the Teresa (Emerald) coal tenement area have in fact increased, based on higher coal prices and higher demand for coal and coal property in general. Linc Energy is working through a new valuation process which will be the basis for establishing a sale price guideline with current prospective buyers. The Company expects a detailed update on the coal asset sale proceedings and the valuation process over the coming six weeks.
UBS (Sydney), who is assisting Linc Energy in the coal sales process, is witnessing a general increase in interest from existing and new potential purchasers.

Linc Energy’s CEO, Mr Peter Bond said today,

"The coal sale process has heated up significantly over the past 90 days. We are seeing demand from new potential buyers and due diligence discussions progressing to levels of detail we simply have not seen before. Linc Energy has had a number of discussions with the potential buyers of the coal assets and they have made it clear that the sales program will continue as planned."

For further information please contact Mr. Peter Bond at Linc Energy.
Peter Bond
Chief Executive Officer

I believe this is was why Linc rose 2.3% today whilst most Aussie resource stocks are still being "Henry'd". This is good news but most of us have heard the "sale in six weeks" before now so will be wary of it. Still it is nice to be informed. I wouldn't blame Linc if they decided to move their first commercial GTL plant to USA, just to say "Up Yours" to the Australian Government.

I also wish the timing was better, markets are as scary as hell right now and not likely to hold themselves together for 6 weeks based on the fact that soverign debt issues simply cannot be resolved quickly. We are in for years of unknowns which is a market nightmare

Still, I am a long term Linc Energy holder and would be daft to leave now. :

 

[frankblack]

Linc Announcement Today (Thursay 6th May)
http://www.vision6.com.au/download/...Affecting Linc Energy_s Coal Asset Sale N.pdf



I believe this is was why Linc rose 2.3% today whilst most Aussie resource stocks are still being "Henry'd". This is good news but most of us have heard the "sale in six weeks" before now so will be wary of it. Still it is nice to be informed. I wouldn't blame Linc if they decided to move their first commercial GTL plant to USA, just to say "Up Yours" to the Australian Government.

I also wish the timing was better, markets are as scary as hell right now and not likely to hold themselves together for 6 weeks based on the fact that soverign debt issues simply cannot be resolved quickly. We are in for years of unknowns which is a market nightmare

Still, I am a long term Linc Energy holder and would be daft to leave now. :

Peter Bond, about as credible as K.Rudd. why believe anything bond has to say?? as for super profits, well, is there any chance Linc will make super profits? just wont affect Linc.

 

[Mickel]

The Super Profits Tax may snare LINC's Coal Sale proceeds if it were in operation now.

There is some media comment today spectulating that the tax should come in after around 11% profits instead of 5.5%. I believe this is about the same rate as some Petroleum Resourse Rent Tax.

 

[baja]

$1.12, great... Good one Krudd, hope you enjoyed your time as PM because come election time, you will be joining the centrelink queue....FFS

 

[profitmann]

$1.12, great... Good one Krudd, hope you enjoyed your time as PM because come election time, you will be joining the centrelink queue....FFS

Not gone yet....keep the faith.....!!! The lattest announcement is a good one.....Coal sale looming......c`mon heads up.

 

[basilio]

Not gone yet....keep the faith.....!!! The lattest announcement is a good one.....Coal sale looming......c`mon heads up.

Nice piece of reassurance profitmann.

I think the last announcement on oxygen injection into the coal seam is good. Somehow I think it has been around before and was always one of the improvements that was going to be made to the UCG process.

It was clearly an exercise in damage control as the bear market is taking hold and very effectively unnerving many people. What I would like to see would be more information about how the oxygen injection was going to make the current processes more efficient and therefore more profitable both in the short term and longer. I think we should also be hearing about the progress of the alkaline cells that were going to enable a quick movement into cost effective energy production. That would be nice to hear.

The coal deal? I know that it is supposed to be on track ect but I can't help feeling that the global contagion will depress prices yet again and scare off investors. But I feel even more certain that Linc must get into the GTL process as quickly as possibly in view of looming oil shortages in the next few years.

And it would be good to see some short term financial return that partially paid the rent.....

Finally there is always the feeling that perhaps we should be out of all shares for the moment because the market will fall, that cash will be king for a while and that we can always come back in later on. Haven't done that yet but somehow I feel a lot of the smart money has beaten me to the door.

 

[profitmann]

Nice piece of reassurance profitmann.

I think the last announcement on oxygen injection into the coal seam is good. Somehow I think it has been around before and was always one of the improvements that was going to be made to the UCG process.

It was clearly an exercise in damage control as the bear market is taking hold and very effectively unnerving many people. What I would like to see would be more information about how the oxygen injection was going to make the current processes more efficient and therefore more profitable both in the short term and longer. I think we should also be hearing about the progress of the alkaline cells that were going to enable a quick movement into cost effective energy production. That would be nice to hear.

The coal deal? I know that it is supposed to be on track ect but I can't help feeling that the global contagion will depress prices yet again and scare off investors. But I feel even more certain that Linc must get into the GTL process as quickly as possibly in view of looming oil shortages in the next few years.

And it would be good to see some short term financial return that partially paid the rent.....

Finally there is always the feeling that perhaps we should be out of all shares for the moment because the market will fall, that cash will be king for a while and that we can always come back in later on. Haven't done that yet but somehow I feel a lot of the smart money has beaten me to the door.

I guess the GTL is a great concept but a long way in for the gold if you know what I mean. Prefer to see them focus on UCG - put some UCG Generators together (6 minimum) and demonstrate they can produce real commercial quantities of Syngas. Then hook that Syngas up into Power Generation. Plug the power into the network and get some bikkies to pay the rent. That`s the focus and I would prefer to see them get these UCG Generators up at Chinchilla not SA. Then at least they demonstrate that all the hype can actually create some cash flow. Keep the coal sale bubbling away to raise funds for the GTL project. The alkaline fuel cells are a long shot IMO. Don`t think the gasification process at present is creating enough Hydrogen to make all this work. Great idea - but can it be commercialised within an acceptable time frame??? Anyway seems there is still many faithfulls around who live in hope!!.

 

[noirua]

Time to make a purchase for the longer term now that LNC have introduced UCG Gasification for very deep mines.

 

[Smurf1976]

IPlug the power into the network and get some bikkies to pay the rent. That`s the focus and I would prefer to see them get these UCG Generators up at Chinchilla not SA.

Why Chinchilla? Wholesale electricity is around 50% more expensive in SA compared to Qld so I can't see your logic there.

If it were me, I'd look very seriously at the option of selling syngas to an existing power station in the Adelaide city area in order to get a large scale development up and running, thus thoroughly proving to everyone that UGC works, at relatively low capital cost. All that's really needed is to get the UGC happening and build a pipeline (gas pipelines being relatively cheap compared to power stations). That plus some relatively minor work at the power station.

Only real risk is that conventional natural gas producers drop prices sufficiently to keep syngas out of the market. Possible, but such an outcome certainly goes against the global trend of higher gas prices.

Converting one unit at Torrens Island A station comes to mind as a possibility. If the gas is cheap enough then that could get that plant back into baseload operation (in practice it's mostly used as peaking plant these days). And being a steam plant, there's not a lot to do in terms of switching it to a different gas (and not a lot of risk of anything too nasty happening if there are any issues with gas quality etc).

 

[basilio]

Did anyone go the Linc Limelight presentation in Melbourne on Thursday evening? Or other recent Limelight presentations? Just wondering if there was any interesting news.

There was a nice blip in Linc's price at opening today so perhaps some of the investors groups at last nights presentation decided to come on board...