LNC - Linc Energy

[Jonathan111]

Really interesting find Jonathan on the 2 South African positions. That is the first time we have heard about LNC's interest in that part of the world.

Thanks Basilio, below is a post by Nicole, who is refering to the Brisbane Diesel Dash meeting. In bold it says that new locations will be announced. It also says inquiries are coming in constantly asking LNC to set up UCG plants. (a lot better than Linc chasing partners in hope) I will be in Sydney for the Diesel Dash meeting and am planning to have a drink, hopefully I wont get too excited and have too many beers, so i can remember what is said.. :bier:

These are some points that were made last night by Peter Bond

Stirling Hinchcliffe (Labor Minister for Infrastructure and Planning, Mining QLD) was impressed by Linc operations

Linc is getting 10 to 15 enquiries per month with regard to setting up UCG plants around the world from governments and private business

Generation 5 is the roll out model around the globe.

Generation 6 and 7 are just new, improved and even more efficient models.

Linc will be announcing the opening of locations around the world.
Linc has the cheapest CO2 in the world when producing from UCG

They will get around 500 bopd from Wyoming (ex-Rancher's oil fields) currently at around 200 bopd just with better efficiencies and before any CO2 flooding

Linc will initially pay for CO2 to inject into Wyoming oil fields to get more cash flow.

Peter stated that the Rancher assets purchased for $20 million and obviously when CO2 flooding and further drilling occurs could be worth as much as $2 billion

To set up a UCG plant is relatively simple as it is set up as modular. Would take around no more than 6 months from construction to set up a 5,000 barrel a day operation.

Will happen end of this year (targeting), start of next year at the latest.

Whoever issues the permits first will be the first commercial operation whether that be Chinchilla, Wyoming, Arckaringa or anywhere else for that matter

The Governor of Wyoming (Matt Mead) really likes Linc and is supportive of Linc's plans in Wyoming.

Independant scientific report (ISP) looks like issuing their report for Chinchilla/QLD by end of 2012 and not early 2012 as previously envisaged.

Coal deposits away from ports are becoming very attractive to overseas/asian interests because coal deposits around the Ports have diminishing resources hence why they are looking at coal deposits far from ports.

Prospective overseas buyers are happy to build the infrastructure. (my comments - this was actually reported in the AFR a few days ago)

No mention of Teresa coal sale

UCG produced synthetic diesel is of European standards (better than Australian diesel) therefore diesel motor vehicles in Australia will run much better using Linc's diesel.

PB had a coffee with CEO of Caltex Australia the other day and was told by him that either every month or 2 Australia was importing 1 extra tanker of oil (I may have misinterpreted this comment, can anyone that went shed more detail?)

Coverage and initiation of BUY by Royal Bank Of Scotland is significant for Linc as they they are world wide reputable broking house.

So all in all, looks good for Linc in my opinion.

RBS had a target of $3.25 and also "said the stock could be worth as much as $7.89 in a best-case important scenario." quoted from AFR 2/3/11.

Maybe the reporter saw the vodcast and got confused?

It showed something like 67 Litres for $13 on the Linc Fuel Pump,

$13/67L = 19.4

$30(Linc production cost) / 159L (barrel) = 0.188679245
19c per litre?

Anyway, LNC will be getting lots of attention with the Diesel Dash and all the announcements and news due out...


The next vodcast, 3 is out
http://www.lincenergy.com/linc_vodcasts.php

 

[Mickel]

Hi Skivvy

All your quoted LNC assets are correct as far as I'm aware. And you haven't mentioned the SA coal and also oil in Arckaringa Basin or the AFC Fuel Cells. There is also a potential big new coal tenement in Qld where LNC will be drilling this year. This is mentioned in the RBS Morgans analyst report that PB referred to. He also mentioned that they have been trying to get them to cover LNC for 9 months and the reality is RBS Morgans had to drop another company to cover LNC.

Looking back to the heady S/P days of late 2008, we had the delayed GTL Demo plant dragging on from Feb to Oct before diesel was produced. During that time, 5 Sept, LNC announced a HOA with a chinese company to sell Teresa for AU$1.5B. This was totally unexpected and sent the S/P soaring. Then we had the diesel flowing on 14 Oct.

Since then there have been negative surprises regarding LNC's progress (until Aug 2010). So the market is wary until various milestones have been reached-
1. Sale of Teresa
2. Commercial operation of UCG
3. Positive result with gas flow in Alaska
4. EOR operation producing oil in US
5. Contracts signed for GTL module construction with acceptable fixed price.
6. The above will lead to sustainable operating profits
7. Siteing and completion of GTL plant in situ.

Most of these are targetted for completion this year and if they are achieved the S/P could hit the $10 mark. RBS (Royal Bank of Scotland) Morgans says $7.89 if the above are realised plus valuation of the other Qld coal asset @ $500M.

If the oil price keeps rising the S/P could go higher.

All this IMHO. I'm not an advisor and accept no liability

PS I last topped up in June 2010 at around $1 and wished I bought more with gearing.

 

[skivvy]

Hi Skivvy

All your quoted LNC assets are correct as far as I'm aware. And you haven't mentioned the SA coal and also oil in Arckaringa Basin or the AFC Fuel Cells. There is also a potential big new coal tenement in Qld where LNC will be drilling this year. This is mentioned in the RBS Morgans analyst report that PB referred to. He also mentioned that they have been trying to get them to cover LNC for 9 months and the reality is RBS Morgans had to drop another company to cover LNC.

Looking back to the heady S/P days of late 2008, we had the delayed GTL Demo plant dragging on from Feb to Oct before diesel was produced. During that time, 5 Sept, LNC announced a HOA with a chinese company to sell Teresa for AU$1.5B. This was totally unexpected and sent the S/P soaring. Then we had the diesel flowing on 14 Oct.

Since then there have been negative surprises regarding LNC's progress (until Aug 2010). So the market is wary until various milestones have been reached-
1. Sale of Teresa
2. Commercial operation of UCG
3. Positive result with gas flow in Alaska
4. EOR operation producing oil in US
5. Contracts signed for GTL module construction with acceptable fixed price.
6. The above will lead to sustainable operating profits
7. Siteing and completion of GTL plant in situ.

Most of these are targetted for completion this year and if they are achieved the S/P could hit the $10 mark. RBS (Royal Bank of Scotland) Morgans says $7.89 if the above are realised plus valuation of the other Qld coal asset @ $500M.

If the oil price keeps rising the S/P could go higher.

All this IMHO. I'm not an advisor and accept no liability

PS I last topped up in June 2010 at around $1 and wished I bought more with gearing.

Thanks Mickel, I have a lot of confidence in Linc and agree with your comments and I think it was Atomic who also said until we see some production then the SP will linger on. We just need some momentum to build and the positive news to continue to flow and this stock will keep moving up. There are far more positive reasons then negative reasons to hold this stock and with lots of cash in the coffers the long term outlook is fantastic.
Do your own due diligence and glta holders.

 

[basilio]

LNC's 6 month report came out today. Certainly impressive with large holdings in coal and oil assets as well as cash in the bank.

Also interesting was the announcement that LNC had purchased a 10% stake in Powerhouse Energy PLC. The company has developed a number of technologies to turn waste and biomass into energy with zero emissions. One of their processes utilizes syngas so I guess that is how LNC wants to be involved.

I suspect that LNC's involvement could be a good boost to Powerhouse's eventual float.

http://phe.live.irmau.com/irm/content/home.html Link to Powerhouse website

http://newsstore.fairfax.com.au/app...e.ac?code=lnc&submit=Go&section=summary&f=pdf Link to 6 month LNC report

 

[Slipperz]

LNC's 6 month report came out today. Certainly impressive with large holdings in coal and oil assets as well as cash in the bank.

Also interesting was the announcement that LNC had purchased a 10% stake in Powerhouse Energy PLC. The company has developed a number of technologies to turn waste and biomass into energy with zero emissions. One of their processes utilizes syngas so I guess that is how LNC wants to be involved.

I suspect that LNC's involvement could be a good boost to Powerhouse's eventual float.

http://phe.live.irmau.com/irm/content/home.html Link to Powerhouse website

http://newsstore.fairfax.com.au/app...e.ac?code=lnc&submit=Go&section=summary&f=pdf Link to 6 month LNC report

Yes the report made for very good reading. Nice to see LNC with a bit of moolah at last after all the delays with the coal sale and associated dilutionary cap raisings.

No mention made of progress at Ackarinka re the GTL plant??????

This is really the company maker and all the rest is just small change.

Any thoughts anyone.

Just an an aside I'm out at the moment but watching with very keen interest

 

[Mickel]

Yes the report made for very good reading. Nice to see LNC with a bit of moolah at last after all the delays with the coal sale and associated dilutionary cap raisings.

No mention made of progress at Ackarinka re the GTL plant??????

This is really the company maker and all the rest is just small change.

Any thoughts anyone.

Just an an aside I'm out at the moment but watching with very keen interest

As far as I'm aware there was never going to be a GTL plant in the Arckaringa basin. They were hoping to site the 1st GTL plant at Oorroo in the Walloway Basin and still might. The problem was some subsidence at the initial area they selected. They are/have drilled at another site adjacent to Oorroo but this has delayed their plans and the 1st GTL plant may be in Wyoming depending on the swiftness of the permitting.

While the GTL business is the "icing on the cake", the EOR is NOT "small change" as you put it. It can earn LNC billions of $$$, especially if ,as PB stated at the last AGM, they roll out another EOR oil field every quarter once they are set up with the cheapest production of CO2.

If "I'm out at the moment" refers to you not holding LNC shares currently and you believe in the company, I suggest you buy sooner rather than later. The dip today is a good buying opportunity as once the Teresa coal sale is announced, I doubt that the S/P will be below $3.00.

Again IMHO.

 

[dogeatdog]

I agree with you Mickel, regarding owning some Linc shares.
It appears like myself, you were an early entrant, so probably got in below A$1, and topped up further along the way.
For new comers, this has proved to be such a volatile stock, it doesn't inspire confidence to buy and hold, when the sp is hovering in it's current range.
It's a great stock to day trade both long and short.
Personaly I intend to keep all the shares I picked up mid last year, for the long term, and, continue to use cfd's to speculate a wee bit.

 

[Slipperz]

As far as I'm aware there was never going to be a GTL plant in the Arckaringa basin. They were hoping to site the 1st GTL plant at Oorroo in the Walloway Basin and still might. The problem was some subsidence at the initial area they selected. They are/have drilled at another site adjacent to Oorroo but this has delayed their plans and the 1st GTL plant may be in Wyoming depending on the swiftness of the permitting.

While the GTL business is the "icing on the cake", the EOR is NOT "small change" as you put it. It can earn LNC billions of $$$, especially if ,as PB stated at the last AGM, they roll out another EOR oil field every quarter once they are set up with the cheapest production of CO2.

If "I'm out at the moment" refers to you not holding LNC shares currently and you believe in the company, I suggest you buy sooner rather than later. The dip today is a good buying opportunity as once the Teresa coal sale is announced, I doubt that the S/P will be below $3.00.

Again IMHO.

Thanks for that Mickel. My memory on the GTL plant was a bit fuzzy but it was the thought of a 10000 BPD GTL plant that got me interested in the LNC story from the get go.

I guess my point was it almost seems to have fallen by the wayside with the myriad of other projects LNC is now engaged in.

If they all come to fruition well and good but given the delays involved with the coal asset sale and the commissioning of the GTL plant I wonder how much money will be frittered away before a solid revenue stream is generated?

Haven't sasol in SA had a plant running for years?

 

[Mickel]

Thanks for that Mickel. My memory on the GTL plant was a bit fuzzy but it was the thought of a 10000 BPD GTL plant that got me interested in the LNC story from the get go.

I guess my point was it almost seems to have fallen by the wayside with the myriad of other projects LNC is now engaged in.

If they all come to fruition well and good but given the delays involved with the coal asset sale and the commissioning of the GTL plant I wonder how much money will be frittered away before a solid revenue stream is generated?

Haven't sasol in SA had a plant running for years?

Hi Slipperz

Yes, the initial focus was the GTL (20,000bpd) plant that was to cost $800M to $1B but delays in permitting initially in Qld and then the rising CapEx together with the drawn out coal sale process certainly put a dampener on the GTL.

However, it's not all bad news as LNC continued with their research and many improvements have been made. If they'd built the GTL plant even in 2010 (initially it was to be in 2009) it would have been a lot less efficient than it will be in 2011/2012.

Regarding Sasol in Sth Africa, they have had GTL since the 1960's but they mine the coal , bring it to the surface and then burn it before the syngas goes through the GTL plant, a much more expensive process.

Another point is that Shell is building a GTL plant in the Middle East and the Capex is way over budget. This is the main reason that PB wants a fixed price module and the smaller capacity assists in this regard (easier to track any faults in the commissioning).

Even with the increased capex, with all the improvements in the last 2 yrs, the GTL process will still be very profitable.

In the meantime, LNC has another very profitable string to its bow with EOR where they can exploit their advantage with cheap CO2.

AND of course further coal sales.

 

[Jonathan111]

Met with PB and Abe in Sydney Diesel Dash

PB is very approachable, open and easy to talk to.

I had quite a few beers by the end of the night, so he might have said, dont quote me on this..


19.x km during good driving and
17.x km during accelaration, wet weather.

Performance was spectacular. Better than anticipated. Carrying 2 passengers, sometimes 3.

Car has NOT been touched with a spanner.

Hoping to fly a jet in months time.

Landline and Channel 7 to cover.

Very clean diesel, similar to rentech, Syntroleum

Can get an oil well permitted in Wyoming in 6 weeks.

Can get an oil well permitted in Alaska in 6.5 weeks.

North America, India, South Africa

Coal is the hotest energy source at the moment, more so than oil.

India will be or is 150 million tonnes coal under, indian countries built power stations without coal supply.

China, Japan the usual suspects will need to buy.

Rancher paid 73mill + 10m on reports and exploration. 3 -4 studies done. Our guys have gone over it. Big value, couple a hundread barrells, with further enhancement 500 bpd, UCG C02 in the thousands, ramp up to 10000 - 20000, 6 - 12 months.

Carbon tax wont effect us, currently does not look like it is an issue around the world.

Arkaringa could be quick cash flow, could be billions if oil is found

There was also talk about natural gas in alaska, three good metered readings of 1000.
Good wells can be 300 - 400.. Not sure what this measurement was though, and heavy i think heavyest mud had to be used to close it up

Long permitting times in aus approx 2 years for a gtl plant, another 2 yrs to build gtl, imo they will look overseas first, maybe africa has shorter permiting time..



http://www.bloomberg.com/news/2011-...-with-3-to-4-groups-for-teresa-coal-sale.html

 

[basilio]

Lovely work Jonathan!!

It is interesting to hear the comments about the seemingly excellent qualities of LNC's diesel fuel. I think it would be well worth LNC having some independent tests undertaken to verify this because it could certainly be worth a real premium in the market place.

Any it certainly wouldn't hurt publicity for the company.

The comments about coal suggest the sale for Teresa will be a full market price - perhaps even better per tonne than last years coup. It would be interesting hear how the extra drills have affected the reserves and asking price.

The EOR projects look like pure gold. I can't see any significant technical challenges - just a very big jump in oil production at a historically high price.

I am still amazed that LNC is still at (IMO) a ridiculously low SP. Why it hasn't been targeted by any number of thinking funds as a worthwhile punt is just beyond me.

But perhaps I have answered my own query.

 

[Mickel]

Yes. Great work Jonathan.

Did PB say anything specific about Africa (given that we are aware of the recent job adds) ?

 

[Mickel]

Further to my recent post where I referred to a Shell GTL plant in the Mid East, here is a recent article which indicates they are requiring changes to the plant before commissioning. I have read where its completion date was to be 2010.

"Shell taps Kentz for engineering work at Pearl GTL plant in Qatar

January 7, 2011

Source: Kentz

Kentz Corporation Limited (LSE: KENZ) has been awarded a Framework Agreement to provide services in executing Plant Change Requests by Qatar Shell GTL Limited.

Under the Framework Agreement, Kentz will provide engineering design, construction supervision and procurement services for plant changes and projects at Pearl Gas to Liquids (GTL) plant at Ras Laffan Industrial City, Qatar, as well as to its offshore platforms, harbor tank farms, offloading jetties and connecting infrastructure.

The duration of the contract is for three years with a two year extension option. The services will be executed in the Kentz Doha office using existing multidiscipline engineering teams, project management and project services resources.

Pearl GTL is the largest GTL project in the world and is being jointly developed by Qatar Petroleum (QP) and Shell. At peak production the facility will produce 140,000 bbl/d of high quality GTL fuels and products and 120,000 boe/d of natural gas liquids and ethane from two trains.

This latest award follows Kentz's successful completion of a number of multi-million contracts over the past five years on the Pearl GTL Project. These contracts have encompassed all three of Kentz's Global Business Units; Specialist Engineering, Procurement and Construction (EPC), Construction, and Technical Support Services.

Hugh O'Donnell, the chief executive of Kentz, commented: "Having been involved in this world scale project from initial site works through to current commissioning activities, we are delighted to continue working with Shell in the operational and maintenance phase of the project with brown field engineering services over the coming years."

Kentz is currently working with Shell on projects in Qatar as well as elsewhere in the Middle East, Russia and Europe."

http://www.pennenergy.com/index/art...-taps_kentz_for.QP129867.dcmp=rss.page=1.html

I should point out that they are using gas not coal as their source fuel.

 

[Jonathan111]

Yes. Great work Jonathan.

Did PB say anything specific about Africa (given that we are aware of the recent job adds) ?

Hi Mickel ,

PB did not give much out on South Africa, he did say something like they were looking into South Africa. imo the permiting time for a GTL plant may be shorter there. He said the will be an annoucement out soon.


I asked PB about EOR, and issues with C02 leaking, and he explained to me how the CO2 acts when it is pumped into the well and that it gets under the oil, some is trapped and some comes back up with the oil to be reused again.
So i think most of it is trapped in the well.


cetane of the syn diesel is 77-78 vs 52 for norm diesel


http://www.couriermail.com.au/ipad/adani-joins-the-fray-for-abbot-point/story-fn6ck2gb-1226017997702

 

[namrog]

I can't understand at this time, why there continues to be so little buying interest in linc.

It's a complete head scratcher as far as I'm concerned, when considering the ammount of publicity that the dash to perth would be expected to generate, indeed todays performance is seriously dissapointing with the shareprice loosing almost 2 percent on very decent volume.....

In the past, most of my concerns revolved around the production of diesel, both the quantity and quality of what was being produced at the demo plant, and even though these issues have not been resolved and explained in lay mans language to my satisfaction , the simple reality that there are at least pictures of the diesel, relieves some of the doubt, though not all, and still the quantity produced needs to be clarified.

As far as I can see, the way things stand politically in queensland and Australia generally, along with the current situation in Africa albeit a different part of that continent, It wouldn't surprise at all to see the first gtl commercial plant in the US, and that would be a shame for Australia...

Here's hopeing that the share price will soon reflect the reality of Linc energy...

 

[dogeatdog]

I can't understand at this time, why there continues to be so little buying interest in linc.

It's a complete head scratcher as far as I'm concerned, when considering the ammount of publicity that the dash to perth would be expected to generate, indeed todays performance is seriously dissapointing with the shareprice loosing almost 2 percent on very decent volume.....

In the past, most of my concerns revolved around the production of diesel, both the quantity and quality of what was being produced at the demo plant, and even though these issues have not been resolved and explained in lay mans language to my satisfaction , the simple reality that there are at least pictures of the diesel, relieves some of the doubt, though not all, and still the quantity produced needs to be clarified.

As far as I can see, the way things stand politically in queensland and Australia generally, along with the current situation in Africa albeit a different part of that continent, It wouldn't surprise at all to see the first gtl commercial plant in the US, and that would be a shame for Australia...

Here's hopeing that the share price will soon reflect the reality of Linc energy...

Hey Namrog.
Check out page 89 and 90.
Some interesting technical insight, and opinions from Mexican, and MR Z.
"Patience is a virtue" as they say.
Once PB starts to deliver on all the promises, Linc will create great share holder value. (IMHO)
We must hope for a peaceful settlement in the middle east, and avoid a downward correction in the global markets of course.
Personally, these current dips in the linc sp, offer a wonderful opportunity to buy more shares

 

[basilio]

Personally, these current dips in the linc sp, offer a wonderful opportunity to buy more shares

And arn't there some wonderful buying opportunities at the moment... Let's just hope the "opportunities" don't get better..

 

[namrog]

Hey Namrog.
Check out page 89 and 90.
Some interesting technical insight, and opinions from Mexican, and MR Z.
"Patience is a virtue" as they say.
Once PB starts to deliver on all the promises, Linc will create great share holder value. (IMHO)
We must hope for a peaceful settlement in the middle east, and avoid a downward correction in the global markets of course.
Personally, these current dips in the linc sp, offer a wonderful opportunity to buy more shares

Thanks dogeatdog, I'm aware enough of the technical picture, at the moment it's pretty simple as far as I'm concerned, under 2-55= down hard, over 3-05 = up hard...

Not a good day for linc so far again today, down around another 3 %

In some ways the problems in the middle east should be good for the linc share price, but I do understand that when general market sentiment wanes that nothing is spared, so it's a wait and see situation..

I should declare that I'm not holding LNC at the moment, and personally would rather see it clear $3-10 before re-entering, I expect it would then get to $3-40 and onto $5 rather quickly, better that than see a big market crash that many are predicting...!

So it's sit and wait......

 

[dogeatdog]

Thanks dogeatdog, I'm aware enough of the technical picture, at the moment it's pretty simple as far as I'm concerned, under 2-55= down hard, over 3-05 = up hard...

Not a good day for linc so far again today, down around another 3 %

In some ways the problems in the middle east should be good for the linc share price, but I do understand that when general market sentiment wanes that nothing is spared, so it's a wait and see situation..

I should declare that I'm not holding LNC at the moment, and personally would rather see it clear $3-10 before re-entering, I expect it would then get to $3-40 and onto $5 rather quickly, better that than see a big market crash that many are predicting...!

So it's sit and wait......

Fully understand where your coming from Namrog.
Tentative times indeed.

LNC holder.

 

[basilio]

LNC has just formally announced it's investment and arrangements with Powerhouse Energy. This company appears to have developed a very cost effective above ground gasification unit that can turn mined coal into syngas with very little CO2 production and other valuable improvments.

They are buying in 10% of the company and also gaining rights to sell the unit around the world. Suddenly clean coal might not be such an oxy moron.

If this is as good as it looks this will be another huge step to utilzing LNCs coal assets in an environmentally sustainable way(and making a decent dollar...)

http://newsstore.fairfax.com.au/app...get_prices=Get+prices+&+charts&code=lnc&f=pdf

_____________________________________________________

Mr Market obviously didn't like the news LNC down to $2.61!!