Australian (ASX) Stock Market Forum

LNC - Linc Energy

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basilio said:
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!!
Click to expand...

That's a pretty interesting move from Linc, looks like a very cheap investment with lots of potential upside, would certainly side step a lot of environmental issues that are currently holding a commercial opperation back...

Perhaps the coal tennements won't be sold after all...

Powerhouse looks like it could be worth chasing on its own, does anyone know if it's possible to be involved from Australia ..?
 
With some contributors to this thread currently not holders of LNC, I pose the following for comment-

1. You believe that LNC will be profitable within 2 years and continue long term

2. More than 1 T/A's views have stated that there is strong support around $2.50- $2.60

3. You have "x" to invest, probably in LNC

then

Why wouldn't you invest 1/2 "x" at around $2.60

then if
(a) LNC s/p subsequently falls, buy 1/4 "x"around next support level and then further consider the last 1/4 investment. In this case there would probably be a major market correction.

(b) LNC s/p hovers around $2.60- $3.00 until the coal sale announcement then jumps to say $3.50 (perhaps over a few days). You then buy 1/2 "x" as quickly and as cheaply as you can.

Either way, you are better off than waiting until the S/P is over $3.00 IMHO

Any comments ?

LNC holder

PS LNC S/P currently $2.62
 
Mickel said:
With some contributors to this thread currently not holders of LNC, I pose the following for comment-

1. You believe that LNC will be profitable within 2 years and continue long term

2. More than 1 T/A's views have stated that there is strong support around $2.50- $2.60

3. You have "x" to invest, probably in LNC

then

Why wouldn't you invest 1/2 "x" at around $2.60

then if
(a) LNC s/p subsequently falls, buy 1/4 "x"around next support level and then further consider the last 1/4 investment. In this case there would probably be a major market correction.

(b) LNC s/p hovers around $2.60- $3.00 until the coal sale announcement then jumps to say $3.50 (perhaps over a few days). You then buy 1/2 "x" as quickly and as cheaply as you can.

Either way, you are better off than waiting until the S/P is over $3.00 IMHO

Any comments ?

LNC holder

PS LNC S/P currently $2.62
Click to expand...



Mickel, I dont know if this is directed at me or not , but I will answer anyway...

1. I don't know , if you mean that they will have a commercial CTL plant built in two years , or if the oil or gas opperations are online by then, then yes there is every reason to believe that the company will be profitable long term..
But two years ago I was thinking there would be a CTL plant opperational by now, so who really knows..however, I do expect that sometime in the future that Linc will be a profitable energy produser, but when ??

2. You don't have to be an expert in TA to see strong support around $2-55 but that will matter little if the global situation deterioriates and markets crash, the reason it's at $2-62 today has nothing to do with the company, but everything to do with current market sentiment, and whilst the crash of 2008 when the SP dropped from $5 to $1 is unlikely to be repeated right now, I still think it's not the time to be buying, but that's a personal thing..which leads to point 3

3. In my oppinion there is nothing wrong with the strategy of averaging in that you have explained, providing there is a bottom line, indeed I did this exact thing with Linc during the period 2009 to mid 2010, buying at 1-75, 1-50, and 1-25 , this was based soly on the coal assets that were for sale at the time, but It's not the sort of thing I would do often, it can be argued and there's no denying that Linc are in a much better position now than then , and a shareprice under $2-50 even in a dire market, would be a short lived experience..it's just that I'm playing it a bit safer these days..
Having said that, there is a level not a million miles lower than where we are, when it would be hard to not buy some, and maybe average up from there...

I guess it boils down to ones personal style of trading / investing...
 
Hi Namrog

I wasn't directing my previous post to anyone in particular, just a general observation. If I wasn't fully invested in LNC, that would be my strategy. I note that you would consider the same again if the S/P fell further.

Regarding having the GTL plant producing, in my view everything would have to go to plan for it to be up and running within 2 years.

However the EOR is a different matter. Considering the following that PB has stated at various times-

1. they are planning to produce their own CO2 by end calender 2011
2. before that they will buy CO2 for EOR
3. they take full control of the Rancher oil field at the end of this month
4. they estimate production of 10,000 to 20,000 bpd from Rancher with EOR
5. they estimate production costs with their own CO2 of $40 pb
6. Rancher has about 100 M barrels, not all recoverable but LNC will be after most
7. PB said once they started they would be planning for a new EOR oil field each quarter

I consider that this is achievable-

1. Production of 10,000 bpd (from Rancher) from July 2011 for 350 days in 11/12 F/Y
2. Average cost of $50 pb (taking into account buying CO2 for up to 6 mths)
3. Average price of oil for 11/12 F/Y $100 pb (USD and AUD)

so earnings 11/12 F/Y = 10,000 x 350 x $100 = $350 M - production costs $175M = $175M deduct further $25M for contingencies and we still have $150M EBIT.

Then in F/Y 12/13 if they only add 2 new fields (not 4 as planned) with oil at $85 pb and costs at $45pb, the equation is-
30,000 x 350 x $40 (operating profit) = $420M less say $70M for contingencies = $350M EBIT

OR

if they can extract 15,000 bpd from all fields= $525M EBIT

Then in F/Y 13/14 if they add another 3 fields (not 4 as planned) with the same costs & oil price as the previous year the EBIT doubles ie-

$700M EBIT at 10,000 bpd at each oil field and $1050M at 15,000 bpd

Not bad for an operation that wasn't even considered 18 months ago by LNC

All IMHO
 
Mickel said:
Hi Namrog

I wasn't directing my previous post to anyone in particular, just a general observation. If I wasn't fully invested in LNC, that would be my strategy. I note that you would consider the same again if the S/P fell further.

Regarding having the GTL plant producing, in my view everything would have to go to plan for it to be up and running within 2 years.

However the EOR is a different matter. Considering the following that PB has stated at various times-

1. they are planning to produce their own CO2 by end calender 2011
2. before that they will buy CO2 for EOR
3. they take full control of the Rancher oil field at the end of this month
4. they estimate production of 10,000 to 20,000 bpd from Rancher with EOR
5. they estimate production costs with their own CO2 of $40 pb
6. Rancher has about 100 M barrels, not all recoverable but LNC will be after most
7. PB said once they started they would be planning for a new EOR oil field each quarter

I consider that this is achievable-

1. Production of 10,000 bpd (from Rancher) from July 2011 for 350 days in 11/12 F/Y
2. Average cost of $50 pb (taking into account buying CO2 for up to 6 mths)
3. Average price of oil for 11/12 F/Y $100 pb (USD and AUD)

so earnings 11/12 F/Y = 10,000 x 350 x $100 = $350 M - production costs $175M = $175M deduct further $25M for contingencies and we still have $150M EBIT.

Then in F/Y 12/13 if they only add 2 new fields (not 4 as planned) with oil at $85 pb and costs at $45pb, the equation is-
30,000 x 350 x $40 (operating profit) = $420M less say $70M for contingencies = $350M EBIT

OR

if they can extract 15,000 bpd from all fields= $525M EBIT

Then in F/Y 13/14 if they add another 3 fields (not 4 as planned) with the same costs & oil price as the previous year the EBIT doubles ie-

$700M EBIT at 10,000 bpd at each oil field and $1050M at 15,000 bpd

Not bad for an operation that wasn't even considered 18 months ago by LNC

All IMHO
Click to expand...

Mmmm,, you do paint a nice picture Mickel....:)

Off hand, what is the asset backing per share now...?
 
namrog said:
Mmmm,, you do paint a nice picture Mickel....:)

Off hand, what is the asset backing per share now...?
Click to expand...

From the 1/2 yearly report Net Assets are about $531M or approx $1 per share.

http://www.lincenergy.com/data/asxpdf/ASX-LNC-320.pdf

I believe the recent RBS Morgans analyst report has a "sum of the parts risked valuation" of Net Present Value of $3.25 per share which includes a derisked valuation of $447M for Teresa and values the Galilee royalty at $305M.

Regarding Analyst Reports, it appears from recent posts on the Analyst Reports section on the LNC website, that they will release various reports one month after publication. So the RBS Morgans recent report should be released in early April.
 
The last few "Diesel Dash" clips, make for interesting viewing.
Good to see various politicians putting in positive comments.
http://www.lincenergy.com/linc_vodcasts.php

Couldn't resist having a further nibble at 2.52 this morning.
 
Interesting how folk have been quiet here for the past few days.
In shock maybe?
Been wonderful to trade Linc in the recent days, for the brave :)
Choppy times ahead.

LNC holder.
 
The whole market has been challenging.. Great bounce back today but really LNC should be at $3.00 waiting for another $500m + coal sale to send it to $3.80 ..

I don't think the Japanese situation is in any way resolved. I fear it has a lot more damage to play out and that the world financial structures and obviously the stock markets will be in for a major correction.

The question will be whether LNC has sufficient fundamental value to absorb the drama and exit as a profitable and successful energy company. ??
 
Something very interesting is happening with LNC.

There is currently a couple of huge buy orders (around 450,000 shares) at $2.84 and $2.76 effectively soaking up some other fairly determined sellers at $2.42 and $2.44. A

If these wern't there LNC would like like opening at least 20c lower.

Let's see where this goes.
 
This is not just happening to LNC. It appears in many stocks I have looked at this morning.

My suspicion is that most of those large orders will be pulled by opening.

brty
 
Interesting presentation given by Justyn Peters on 10th March-
http://www.lincenergy.com/data/media_news_articles/LNC-Presentation-599.pdf

Page 4 includes "Two other non‐core coal assets for sale for approx $A1 Billion to have $A1.5 Billion by the end of the year". Apart from Teresa the other coal asset appears to be NW of Hughenden of which we have heard very little.

Pages 19 to 21 cover EOR including this on page 21-

"Linc Energy aims to supply 2 or 3 EOR fields in the next 12 – 18 months to produce approximately 10,000 barrels/day.

• EOR oil production costs = $30‐$35/barrel

• 10,000 bpd production equates to $180– $200 Million EBITDA

• Linc Energy’s five year plan is to have over 100,000 bpd EOR oil production"

I've extrapolated the numbers in a previous post. In this instance they have reduced the production costs.
Suffice to say, if in 5 years they are producing 100,000 bpd at the quoted costs, the EBITDA will be up to $2 BILLION.
 
“I’m absolutely confident within five years, you will be able to buy Linc diesel at the bowser.”

pic02.jpg

...



Speaking on the company’s South Australian UCG play, Bond said he had just received the prefeasibility
report for power generation and it would take a month to read and decide what the next
step was, and when to take it.


...

He noted that while the current demonstration plant at Chinchilla, Queensland, was only capable of
producing a couple of thousand litres of diesel per day, Linc was planning to build a modular plant
capable of producing 5000-6000 barrels per day once it received approval from state government.


Not sure if the last point is actually, a couple of litres, or couple of hundread, or really thousands... Maybe they mean expandable to:

http://www.lincenergy.com/data/media_news_articles/LNC-Media_Coverage-604.pdf



http://www.lincenergy.com/data/media_news_articles/LNC-Media_Coverage-601.pdf


http://www.lincenergy.com/data/media_news_articles/LNC-Media_Coverage-600.pdf
 
Jonathan111 said:
“I’m absolutely confident within five years, you will be able to buy Linc diesel at the bowser.”

"He noted that while the current demonstration plant at Chinchilla, Queensland, was only capable of producing a couple of thousand litres of diesel per day, Linc was planning to build a modular plant capable of producing 5000-6000 barrels per day once it received approval from state government."


Not sure if the last point is actually, a couple of litres, or couple of hundread, or really thousands... Maybe they mean expandable to:
Click to expand...


Hi Jonathan

Thanks for sourcing those articles.

I think he DID mean "a couple of thousand litres".

The demo plant was initially said to be capable of producing 5-10 barrels per day. At 159L per barrel, 10 barrels is 1590L. With all the improvements since Oct 2008 on the UCG and GTL, it wouldn't surprise if they can now produce 12.5 bpd which would be approx 2000L.

At the Brisbane function for the Diesel Dash PB mentioned it will take 2 yrs for permitting for both UCG and GTL combined. So he's given himself some leeway in saying Linc Diesel will be sold at pumps in Aust within 5 years.
 
Atomic said:
So where else too from here on in ,
Will we see a supply chain of fuel ststions throughout USA Canada with direct to the consumer poduct ? So premium disel for Jet FUEL only, cuts out a huge supply potenial
By adding a service chain (petrol stations) this will cut out the middle man and the true refining margin will be realised.

So far this company has'nt stopped surprising me with their achievments and insight.

This is the greener fuel for the next ?
Click to expand...

Maybe i should be working for LINC.

This move really excites me , as the real value to lnc and shareholders will skyrocket.
Now when/if we see PB buying up corn fields to produce methanol (e10 or whatever ya call it) more cost savings and broader retail/customer base will open up.
The cost savings from linc diesel to produce methanol , then throw in the expanding retail market base , possibly then refine corn stalks into aboe ground non-food biomass gas generation and Kaching $$$$$$
So the story of LNC evolves

Atomic
 
We are going to have offices in South Africa joburg, poland, hungry, budapest, india mumbai, shang hai china

http://www.akrdc.org/membership/events/breakfast/1011/031711.html

Linc Energy: Our Plans For Alaska

Paul Ludwig, Stakeholders Relations Manager,
Linc Energy Operations Inc.

Hi Mickel,

Ah yes, I read somewhere that they were producing 20bpd, which would be 159L x 20, which would be over 3000L per day.. got mixed up with the barrels and litres.

Cheers,
Jonathan


Methanol..
Is this another byproduct from the process?
 

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