LNC - Linc Energy

[Slipperz]

Yes suprisingly strong run, currently up 21c, 7.9%, $2.86

Shame that. I was thinking perhaps a bit of water on the front lawn of the Bondplex might have presented an opportunistic investor with a buying opportunity. :

 

[Atomic]

Shame that. I was thinking perhaps a bit of water on the front lawn of the Bondplex might have presented an opportunistic investor with a buying opportunity. :

The back yard got a bit wet, but the outlook over the seas is amazing!!!!!!!!!

 

[dogeatdog]

Positive close today for the LNC sp

Sad to see the devastation in Queensland, and my sympathy goes out to all the folks living in the effected area.

Luckily with the majority of Lincs planned future income coming from overseas, (UCG, GTL, EOR, AFC, CO2 sequestration, power generation) etc, the flooding should have little impact on the sp. IMO

I'm keen to find out the results from the Alaskan drilling program. Can't be long now?

 

[Atomic]

Positive close today for the LNC sp

Sad to see the devastation in Queensland, and my sympathy goes out to all the folks living in the effected area.

Luckily with the majority of Lincs planned future income coming from overseas, (UCG, GTL, EOR, AFC, CO2 sequestration, power generation) etc, the flooding should have little impact on the sp. IMO

I'm keen to find out the results from the Alaskan drilling program. Can't be long now?

Totally agree there Dogeatdog.

PB has i think diversified the company in some specialised technologies/areas which will all combine / convert very soon to $$$$$$$$$

 

[dogeatdog]

Just had a listen to the CFO at Linc. http://www.lincenergy.com/boardroom_radio.php

Not as an inspirational speaker as PB, but the content of his speech leaves one feeling confident for the near, and long term future as a share holder.

 

[dogeatdog]

Non event day for the Linc sp.
The article below would suggest further confidence in the UCG process, which may help Linc's cause. IMHO

Cougar Energy completes capital raising
Published 2:02 PM, 10 Jan 2011

The embattled energy company at the centre of a water contamination scare in Queensland has successfully raised much-needed funds for working capital and fresh investment.

Cougar Energy Ltd said it had raised $1 million from institutions and sophisticated investors by selling about 27 million new shares in the company for 3.7 cents each.

"The funds raised will be used for working capital and to advance the company's UCG (underground coal gasification) projects in Australia and overseas," Cougar said.

Because the placement will be progressed under the 15 per cent placement capacity of the company, shareholder approval is not required for the issue.

Cougar shares jumped on news of the capital injection, rising to 4.9 cents before falling a little to trade at 4.8 cents at 1253 AEDT, up 14.3 per cent.

Cougar made headlines in July 2010 after its trial UCG project near Kingaroy in Queensland was forced to close after company tests found traces of the carcinogen benzene and the toxic chemical toluene in bores at the site.

The move prompted the company to warn it was uncertain whether it could continue as a going concern.

In September, Cougar said its working capital requirements for the following 12 months exceeded its cash position.

The UCG site remains closed, although the Queensland government is due to respond on January 17 to fresh environmental reports from Cougar.

 

[Atomic]

news today of lnc director buying 500K of shares at/on the 31/12/10.

I think he used personel money on market buy , correct me if wrong pls.
always a good sign when directors r buying in.

any more thoughts about lnc's future anyone

 

[Jonathan111]

Not out of the woods yet..

Chinchilla people ordered to higher ground

As Queensland's flood emergency continues, residents in low-lying areas of the western Darling Downs town of Chinchilla have been told to evacuate.

"People in low lying flood-prone areas at Chinchilla should immediately evacuate to higher ground," a statement issued by Queensland police on Monday evening said.

"This is due to the volume of water in local waterways."

Large parts of the town, which services agriculture and mining industries, were flooded on December 27.

http://news.ninemsn.com.au/national/8194640/chinchilla-people-ordered-to-higher-ground

http://www.smh.com.au/environment/weather/melon-festival-still-a-smash-20110107-19ith.html

 

[ColB]

news today of lnc director buying 500K of shares at/on the 31/12/10.

I think he used personel money on market buy , correct me if wrong pls.
always a good sign when directors r buying in.

any more thoughts about lnc's future anyone

Let's hope the director has some knowledge of some nice drill results from Alaska

Either way Atomic I believe it is going to either break up or down tomorrow.

There was an interesting cross trade after market of 5.5 million shares!!! I'd be interested in the significance of that if anyone could shed any further light.

More flood warnings for Chinchilla this evening. In spite of Marney Carroll's letter to Jonathon let's hope the LNC Chinchilla site is not threatened by any further flooding

 

[dogeatdog]

Either way Atomic I believe it is going to either break up or down tomorrow.

There was an interesting cross trade after market of 5.5 million shares!!! I'd be interested in the significance of that if anyone could shed any further light.


The "cross trade" after closing for 5.5 million shares @ AS2.77 will certainly increase the near term volume. IMO
Fingers crossed for a push north :dunno
Current LNC holder.

 

[Atomic]

Let's hope the director has some knowledge of some nice drill results from Alaska

Either way Atomic I believe it is going to either break up or down tomorrow.

There was an interesting cross trade after market of 5.5 million shares!!! I'd be interested in the significance of that if anyone could shed any further light.

More flood warnings for Chinchilla this evening. In spite of Marney Carroll's letter to Jonathon let's hope the LNC Chinchilla site is not threatened by any further flooding

Yes Colb, a break either way is possible but im looking for a healthy upturn on those alaskan drill results. Hey PB wheres my next dividend check.
Lately with any director buying we have seen a price spike so will be interesting for next coupla days

 

[Jonathan111]

Some serious times in QLD... Many missing and dead..

Well done to Linc for pitching in, with employees helping out and the 50k donation.

A tragic situation... Hopefully that was the peak of the water..


ASX ANNOUNCEMENT
11 January 2011
LINC ENERGY ESCAPES QUEENSLAND FLOOD DAMAGE

.....


“....through the actions of these teams we have managed to operate gasifier 4, the wastewater treatment plant and the GTL facility without incident and these crew members have my sincere thanks for an excellent job under extremely adverse circumstances.”
“The water across site has now subsided and the teams have been busily pumping water from low lying areas and repairing roadways to create safe access around the site. The outlying areas are still water logged.”
“Linc Energy has been offering those members of its workforce who can’t get to work, to volunteer to help the local Chinchilla Community in the clean-up. In addition, Linc Energy has donated $50,000 to the flood appeal to assist those affected by what is the worst flooding in decades, with Linc Energy’s staff taking up the challenge to donate individually as well.”

....

 

[Mickel]

Jonathon, I think the first part of today's ASX Announcement is more pertinant-

LINC ENERGY ESCAPES QUEENSLAND FLOOD DAMAGE
Linc Energy Ltd (ASX:LNC) (OTCQX:LNCGY) advises that despite recent widespread flooding across Queensland, including the lower lying areas of Chinchilla (Queensland), Linc Energy and its staff in Chinchilla have managed to escape flood damage to the site and staff homes.
The Chief Executive Officer, Mr Peter Bond, said that despite what has been some of the worst flooding the district had seen in many decades, Linc Energy’s Underground Coal Gasification (UCG) and Gas to Liquids (GTL) demonstration facility also managed to escape serious flood damage. Much of this was due to Linc Energy constructing its major equipment upon a built-up pad of roadbase, which lifted the majority of Linc Energy’s Chinchilla operations up over 900mm (3 feet) above the low lying grasslands.
“Due to road closures initiated on 23 December following flooding in the area, we implemented manning the site with minimum staffing levels. As such, we have been running skeleton crews with a maximum of six personnel on site across two shifts,” Mr Bond said.
“We have been ferrying crews in and out by helicopter every three or four days along with food and other essential supplies.”
“These skeleton crews have pulled together with a common focus and through their actions we were able to avert any undesirable outcomes for the site during this challenging time.”
“I am proud to say that through the actions of these teams we have managed to operate gasifier 4, the wastewater treatment plant and the GTL facility without incident and these crew members have my sincere thanks for an excellent job under extremely adverse circumstances.”
“The water across site has now subsided and the teams have been busily pumping water from low lying areas and repairing roadways to create safe access around the site. The outlying areas are still water loggd.”

 

[Mickel]

As PB said at the AGM, there are hundreds of depleted oil fields in Alaska. The one he mentioned has 500M barrels that can't be recovered without EOR . . . and he said he might not get all of it, but by God he'll give it a try. At a $50 profit margin per barrel, there's $25B in the ground for us . . . in the one depleted and otherwise worthless oilfield. If EOR alone will be producing 100,000 barrels per day within 5 years, then that's a profit of around
$1.8B . . . justifies a sp of $20 from EOR alone.

He also made it clear that the Teresa coal sale will lead to another dividend . . . another 10c early in the new financial year probably. I'm sure he wants a divvy every year.

I'd like a little more retrace in the sp before Peter does his publicity tour from Brisbane to Perth in the Lincmobile in early January . . . coz you just can't have enough shares in this company. :

Re-reading this thread, one comment in this post doesn't sit easy with me. A profit of around $1.8B (which is approx $3.60 per share) would justify a S/P of around $50, not $20 IMHO. In comparison I quote CBA Bank (which I consider is in a mature market) which had an EPS of $3.70 in 2010 and current S/P of around $51.00. LNC is in an emerging industry and could be justified with a higher P/E ratio once it establishes a stable earnings track record. (We're looking at 2015-6).

And this is just from EOR as stated.

Just MHO.

 

[dogeatdog]

Hello Mickel.
Interesting analysis previously. Let's hope it pans out
You appear to be based in Brisbane? Hopefully you've managed to avoid too much
upheaval.
The media still paint a grim picture for you guys.
Any local knowledge regarding the Linc site at Chinchilla, since the recent posting on the LNC web site?
Good luck :bier:

 

[skc]

Re-reading this thread, one comment in this post doesn't sit easy with me. A profit of around $1.8B (which is approx $3.60 per share) would justify a S/P of around $50, not $20 IMHO. In comparison I quote CBA Bank (which I consider is in a mature market) which had an EPS of $3.70 in 2010 and current S/P of around $51.00. LNC is in an emerging industry and could be justified with a higher P/E ratio once it establishes a stable earnings track record. (We're looking at 2015-6).

And this is just from EOR as stated.

Just MHO.

Do you have the slightest idea on how shares are valued?

The assumption behind PE multiple is that the earning is Perpetual. That is, forever!

A resource is finite. A bank makes money year after year. If you must put a PE on a finite resource it should be less than 1 to take into account of risks with extraction, fluctuation in commodity price etc.

 

[Mickel]

Hello Mickel.
Interesting analysis previously. Let's hope it pans out
You appear to be based in Brisbane? Hopefully you've managed to avoid too much
upheaval.
The media still paint a grim picture for you guys.
Any local knowledge regarding the Linc site at Chinchilla, since the recent posting on the LNC web site?
Good luck :bier:

Thanks Doggie. I'm high on a hill in the northern suburbs and haven't been affected. However I have some friends on the south side of the river who've had their whole house submerged. It is devastating for many people but the community is rallying to assist.
Over 20,000 have registered to assist with the cleanup this weekend. This doesn't include those helping out friends and/or relatives.

I haven't heard much about Chinchilla this week except that parts of the town went under again after Bondy's statement.

Here is a link to a UTube video showing the force of the water in Toowoomba on Monday 10 Jan. There were 2 deaths in Toowoomba that day. The water continued down the Lockyer Valley where there were more than 10 deaths and more than 20 still missing.
http://www.youtube.com/watch?v=kYUpkPTcqPY&feature=player_embedded

 

[Mickel]

Do you have the slightest idea on how shares are valued?

The assumption behind PE multiple is that the earning is Perpetual. That is, forever!

A resource is finite. A bank makes money year after year. If you must put a PE on a finite resource it should be less than 1 to take into account of risks with extraction, fluctuation in commodity price etc.

I won't argue with you SKC but will make a few points-

1.I was talking about 2015/6 when LNC has established a track record of earnings.

2. From CEO's comments in the latest Investor Linc-
"There are hundreds of depleted oil fields in and around where Linc Energy is based in Wyoming and Alaska. Most of these oil fields have large known oil reserves that will remain stranded unless the oil field can be flooded with CO2. For that, an abundant amount of CO2 is needed, and Linc Energy has the capacity to produce the cheapest man-made CO2 in the world, right next door to these oil fields. For every tonne of CO2 pumped into an oil field, two to five barrels of oil can be recovered at an average cost of $30 to $35 per barrel. With an oil commodity price of $80, that's a $40 to $50 margin per barrel. Also, the good news is that virtually all the CO2 can be sequestered and trapped in that oil reservoir.

Consider the hundreds of millions of barrels of oil readily available in these depleted oil fields and you start to gain an appreciation for the potential commercial opportunity at hand. We have already started work on the UCG to EOR process and have established our own EOR team in our Wyoming office in Casper.

My aim is to commence EOR by late 2011 with the goal to produce 3,000 barrels of oil per day. Soon afterwards, our aim is that this oil production will increase to 10,000 barrels per day, with the ultimate goal being the production of over 36,000 barrels per day within 36 months of the extraction of the first barrel of oil.

What that means in terms of dollars and cents is that Linc Energy is aiming to produce $100 million in revenue quickly, in fact by the fourth quarter of 2011. We intend to move quickly to over $250 million in revenue in 2012. Once Linc Energy breaks over 36,000 barrels of oil per day, Linc Energy will be in a position to earn over a billion dollars a year, with an estimated EBITDA (Earnings before interest, tax, depreciation and amortisation) (profit) of over $400 million. In addition, we will have a series of EOR projects that will continue for years to come, with a new EOR project added to our execution list at least every quarter, year upon year. This brings me to Linc Energy's new motto, which is simply ‘Towards One Billion’.

This motto means that Linc Energy is focused on creating one billion dollars per annum of revenue and booking a billion barrels of oil reserves. For me, this is the first big step for Linc Energy to establish itself as a commercial energy player of some size and significance. This is all driven by UCG and will not be lost on the world’s financial markets. In one move, by developing and linking UCG with EOR, Linc Energy will commercialise and substantiate the UCG process, whilst significantly growing the value of our coal assets and oil reserves. This is why Linc Energy has been acquiring oil and gas assets over the past few months. It is the final piece of Linc Energy’s business model."

3. These are the current P/E ratios of the following resource companies-

BHP 14.15 RIO 11.85 and WPL 20.67

I understand that Woodside was of a similar size to LNC currently about 40 years ago.

 

[mattryanshares]

I wonder why they use co2 injection when water is standard practice?
I hold these shares and hope something kicks off soon!

 

[Mickel]

I wonder why they use co2 injection when water is standard practice?
I hold these shares and hope something kicks off soon!

Matt if you look at slide 15 of Bondy's AGM presentation you will see that he quotes 20,000 bpd extracted at Weyburn Canada since 2001 using CO2 flooding. That may have been the first use of CO2. I recall that he stated at the AGM that CO2 was particularily effective as the molecules of CO2 grab onto the wall of the well in simple terms and force the oil out. He also stated that without EOR oil wells retain between 25% and 40% of their oil.

http://www.lincenergy.com/data/media_news_articles/LNC-Presentation-571.pdf