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LNC - Linc Energy

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Basilio, you make some valid points that are a risk to LNC's success.

However, I believe the combination of the following points mitigates that risk to a great extent-

1. LNC's expertise and record in managing environmental risks.
2. Producing cheap power and fuels in an environmental friendly manner.
3. Astute management with a long term vision and control of the company where a hostile takeover is very unlikely.
4.World class technical staff and partners, with tight control of their IP because of having their own lab at Chinchilla.
5. World class assets.
6. A spread of assets both within and outside Australia that prevents one Government from derailing their plans.

and last but not least-

7. A world where demand for power and fuels is increasing strongly.

Luckypaul, your point 6. is actually 1.5 barrels per tonne of coal (which is even better)

refer the second slide in Justyn Peters Limelight presentation on 4 June

http://www.brr.com.au/event/66149/the-power-of-underground-coal-gasification?popup=true&wl=76
 
Regarding my previous post where I mentioned 1 tonne of coal producing 1.5 barrels of diesel, the June quarterly report announcement today states 1.7 barrels-

UCG and GTL at the Chinchilla Demonstration Facility

In June, Linc Energy reported that its UCG Generator 4 has operated for 120 continuous days (and is still operating today), with a total of 19 world-firsts achieved to date. The introduction of the coil tubing unit to provide faster down-hole drilling was cited as one of the world-firsts in UCG technology.
The Gas to Liquids (GTL) conceptual design study for the proposed South Australian commercial facility was completed with Aker Solutions at the end of February, on time and within budget. The study confirmed Linc Energy’s business case for a commercial scale UCG to GTL complex. From the study, it was determined that per tonne of coal (on a dry ash free basis) that 1.7 barrels of liquid fuel and 1.9 (converted barrel equivalent) of electricity could be produced. Linc Energy’s focus is now to optimise capital efficiency through the modularisation of plant equipment to reduce construction costs. Modifications to the GTL equipment and processes have been successful.

http://imagesignal.comsec.com.au/asxdata/20100726/pdf/01081671.pdf
 

An article in The Australian today summarizes my post of 15 July but also mentions their interest in a coal deposit near Emerald-

"The Australian has learnt that the company is also interested in buying another mining tenement near Emerald in central Queensland."

Perhaps Teresa ????

The article continues-
"Linc Energy chief Peter Bond said Adani was very focused on Australia, and had contacted Linc after the Australian company sought expressions of interest in buying its coal deposits in Queensland. "We have been through long machinations with them, but they're certainly very serious about getting into Australia," he said.

"They need coal for their power stations, but they're also a transport group, so it's a complete chain they're looking at."

Last week, India's Economic Times newspaper reported Adani was close to buying one of three coal tenements that Linc had been trying to sell since 2008. According to the report, the coal block in question in the Galilee Basin has reserves of 7-8 billion tonnes, and the report quoted a source close to the deal as saying it would be finalised by the middle of next month.

Linc Energy said yesterday it had found buyers for three assets it has been seeking to sell, but would not provide further details.

Last week, shares in Linc surged from $1.25 to $1.56. This was despite the fact that its core mining activity was underground coal gasification, and all companies in this sector had been affected by a government crackdown following the leak of poison from a pilot plant owned by Cougar Energy at Kingaroy in southeast Queensland.

Events in Mumbai proved more important than events in Kingaroy for Linc, which is based in Brisbane, but moving more of its operations to Adelaide. Adani is conducting an $850 million fund raising on the Indian Stock Exchange, and two market sources in Mumbai told Reuters that the company would use the proceeds mainly for buying coal-related assets.

"The Linc assets will be a very good strategic fit for Adani. It can use the reserves to expand its power projects in India as well as trade in the international market," said an analyst with a Mumbai brokerage.

Adani is run by 48-year-old Gautam Adani, a university drop-out who started his career sorting diamonds. He is now India's 10th richest man, with a personal fortune estimated by Forbes magazine at $US6.4bn ($7.1bn).

After running a diamond brokerage at the start of the 1980s he and his brother went into plastics, but their company really picked up during India's economic liberalisation program from the early 1990s. The Adani Group currently has an annual turnover of $US5.7bn, with a net profit in 2008-09 of $US196m. It has assets of $US3bn."

http://www.theaustralian.com.au/bus...ports-coalfields/story-e6frg8zx-1225897218929

Hopefully a confirmed sale is very near.
 
One of the final paragraphs in The Australian article mentioned in my previous post-
"India's economy is forecast to grow by 9.4 per cent this year and at similar rates for the next few years. To meet these figures the country will need coal. Since the GFC, India and China have increased their coal exports from Australia, with exports of coking coal -- the main type used in power stations -- to India, growing from 15 million tonnes in 2005-06 to 24 million tonnes in 2008-09."

appears to be incorrect.

My understanding is that coking coal is used mainly in steel mills and steaming coal is used in power stations. I note that LNC's Teresa tenement has 200M tonnes of coking coal so it is pertinent to the possible sale to Adani.

Agree/Disagree???
 
Consecutive intraday highs of 1.70 has me thinking it's our new resistance level.


Sure looks like the number to beat at this stage
 
Looks likely Slipperz, where is the support from here around 1.50? Waiting on news is always risky as has been the case with NGE and SSN lately. If the sale announcement doesnt come around soon then LNC may test some sort of support in the next few weeks?

Just my thoughts..............
 
Skivvy I think 1.70 and beyond is the number we are looking at right now.

If PB doesn't ink these deals there will be a catastrophic loss of confidence in LNC imho.

Look out below



Having said that with three written offers on the table we are looking good.

Holding on.....holding on
 
More clarification on Cougar Energy incident. Now confirmed that one test was above the safe drinking water standard. Not sure when this test was conducted. This is from the DERM statement attached to the CXY announcement to the ASX today-

"All of the sampling carried out to date by both Cougar Energy and DERM indicates that benzene has only been detected in one bore (monitoring bore 37) at a maximum concentration of 2 parts per billion (above drinking water guideline of 1 ppb)."

http://imagesignal.comsec.com.au/asxdata/20100728/pdf/01082567.pdf

So, we finally find out that there was one confirmed case of water pollution.

There is more on the DERM statement worth reading that is not on DERM's website yet.
 
Ok. We don't want to get too far ahead of ourselves but it will be very interesting to see the path laid out by Peter Bond and Linc if/when the coal sales are finalised. We would hope they were imaginative, hard driving, inspirational and of course profitable.

One would assume that these plans are being worked out on the basis of various results of the sale but one expect a minimum $1billion over 1-2 years.

So we would have a picture of a company with a well proven disruptive technology, a range of resource opportunities to put them into play, a skilled workforce (hopefully) and plenty of cash. A very potent force and hopefully one that is recognized with more respect and share support than companies that don't tick all the boxes.

Just the small matter of ticking the last boxes on this sale and clearing the cheques...
 
Peter bond has had nearly 2 years to plan his forward movements post coal sale. With new oppertunities along the way, one would hope that it will be full steam ahead for production in what ever location or country. being a long term holder i have recently signifanctly increased my holding in this stock. After riding out original rise to $5 dolars plus then falling to below $1 (giving me time to increase holdings++) i hope that a sale can be announced shortly and the company moves forward. Obviously i believe the company has a massive potental, Bring on the coal sale..
 
The good things to come out of the drawn out coal sale saga are the improvements to processes and new technology-

1. Drill hole distance expands from 30m to 500m (huge cost saving on OPEX).
2. Increase in diesel production from 1 BOO per tonne of coal to 1.7 BOO (again a huge increase to the bottom line).
3. The exclusive contract with AFC fuel cell technology (should prove to be very profitable).
4. The coil tubing drilling unit recently purchased (less drilling costs).

These improvements will not only result in less operating expenditure (OPEX) but also allow for saving of Capital Expenditure as stated by LNC in their recent quarterly report-

"The Gas to Liquids (GTL) conceptual design study for the proposed South Australian commercial facility was completed with Aker Solutions at the end of February, on time and within budget. The study confirmed Linc Energy’s business case for a commercial scale UCG to GTL complex. From the study, it was determined that per tonne of coal (on a dry ash free basis) that 1.7 barrels of liquid fuel and 1.9 (converted barrel equivalent) of electricity could be produced. Linc Energy’s focus is now to optimise capital efficiency through the modularisation of plant equipment to reduce construction costs. Modifications to the GTL equipment and processes have been successful."

http://www.lincenergy.com.au/pdf/asx-231.pdf

Without the delay, the GTL plant would probably cost more to construct and to operate (although it would possibly be close to completion if it started in the first half of 2009 as originally planned).
 
Well the news from the LNC bunker is no deal.

Why are the shares still in a NR trading halt when the news has been released?


Unless there is more news forthcoming.....
 
Great "news" .. but not official. From the look of the pre-opening price the markets believes it's a done deal ...but there is no official announcement from either party.

I think LINC has to suspend the shares prior to making a formal announcement. Otherwise it will rightly getting a real kick in the bum.

But hey Lets celebrate !!
 
.
Well there goes that theory.!! LINC opens at $1.72 with seemingly no announcements (that I can see) Interestingly enough there seem to be some very large sale offers in the $1.70 + range.

One would think that of all times this is one occasion an institution could buy with it's ears pinned back and that selling too early would be a mistake.

But the official announcement has not been made and the cheque has not been cleared.. So let's see how this plays out.


Price ($) Quantity No.
5 64,917 1.720 1 1.725 3,000 1
7 35,850 1.715 2 1.730 73,702 5
7 55,712 1.710 3 1.735 65,945 5
7 89,229 1.705 4 1.740 54,212 5
11 240,220 1.700 5 1.745 180,717 8
1 3,313 1.695 6 1.750 302,300 23
1 15,000 1.690 7 1.755 215,346 4
1 3,000 1.685 8 1.760 368,700 4
3 37,600 1.680 9 1.770 9,952 3
1 2,750 1.670 10 1.780 28,800 4
 
Resistance at 1.70 now broken.

A quarter million buyers there has it looking like our new support level.

Not interested in selling at this point.

 
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