Isn't it just! On the flipside anyone who lacks conviction should have been shaken free by now. In theory we should be building a great base here, sans 2008 redux
LNC - Linc Energy
- Thread starter noirua
- Start date
-
- Tags
- linc energy lnc
Isn't it just! On the flipside anyone who lacks conviction should have been shaken free by now. In theory we should be building a great base here, sans 2008 redux
- Joined
- 1 August 2010
- Posts
- 164
- Reactions
- 0
Isn't it just! On the flipside anyone who lacks conviction should have been shaken free by now. In theory we should be building a great base here, sans 2008 redux
MR Z, You once stated "this is a stock for the back draw". Totally agree with you.
I originally became interested in Linc because of the concept of GTL from stranded coal.
The company/PB has in recent times, focused more on EOR.
There is a great deal of unknown with the current diversification.
1) Supply of CO2 for EOR.
2) Possibility of lower oil prices.
3) Environmental concerns.
4) The latest acquisition financing debt.
etc, etc.
Until Linc start to generate some serious revenue, investors are likely to trade in and out of this company. (IMHO)
LNC holder
From this latest announcement and previous ones, I will attempt to extrapolate future earnings.
So, current production from 1 Aug 2011- 3500 bopd increasing to 10,000 bopd by Dec 2011, then increasing to 20,000 bopd min by Dec 2012, then increasing to 100,000 bopd by June 2016.
Aug 2011 3,500pd, Sept 3,500pd, Oct 5,000pd, Nov 7,500pd, Dec 10,000 pd Total 883500
with only 24 days production in Dec. Also only 24 days production in Jan & Dec 2012.
Jan 2012 10,000pd, Feb & Mar 12,000pd, Apr & May 14,000pd, Jun & Jul 16,000pd, Aug & Sep 18,000 pd
Oct&Nov19,000pd,Dec20,000pd Total 5,515,000
So total production from Aug 2011 to Dec 2012 = 6,398,500
At $100 per boo & costs @ $40 boo 6,398,500 X $60 = $383,910,000
With say an adjusted purchase price of say $240M & therefore borrowings of $180M with interest only at 5%pa until maturity in Dec 2012, then interest- 180M X 5%pa for 1yr 5 mths = $12.75M + repayt of 180 M = $192.75
So profit is $192.75M EBITA for 17mths oil production in USA on LNC capital of only $60M
I realise that I haven't accounted for the extra funding required for expansion as it would normally be drawn down progressivley. If the entire $60M ($300M- $240M) is drawn down then the interest would be less than $4M. So $192.75M less $64M is $128.75M EBITA
Using the same sale price and cost price for a barrel of oil, then I believe the following is achievable-
6 Mths to June 2013 - $60 gross profit X12000 booX 175 days = $126M
12Mths to June 2014 $60 gross profit X 14,000 boo X 350 days = $294M
12 Mths to June 2015 $60 gross profit X 18,000 boo X 350 days = $378M
12 mths to June 2016 $60 gross profit X 20,000 boo X 350 days = $420M
Total profit over 3.5 yrs $1,218M EBITA
I consider that this is a conservative estimate of potential earnings and not realised by the general investor. Perhaps RBS will assist to correct with regular Broker reports.
I welcome any discussion on this estimate.
LNC Holder
So, current production from 1 Aug 2011- 3500 bopd increasing to 10,000 bopd by Dec 2011, then increasing to 20,000 bopd min by Dec 2012, then increasing to 100,000 bopd by June 2016.
Aug 2011 3,500pd, Sept 3,500pd, Oct 5,000pd, Nov 7,500pd, Dec 10,000 pd Total 883500
with only 24 days production in Dec. Also only 24 days production in Jan & Dec 2012.
Jan 2012 10,000pd, Feb & Mar 12,000pd, Apr & May 14,000pd, Jun & Jul 16,000pd, Aug & Sep 18,000 pd
Oct&Nov19,000pd,Dec20,000pd Total 5,515,000
So total production from Aug 2011 to Dec 2012 = 6,398,500
At $100 per boo & costs @ $40 boo 6,398,500 X $60 = $383,910,000
With say an adjusted purchase price of say $240M & therefore borrowings of $180M with interest only at 5%pa until maturity in Dec 2012, then interest- 180M X 5%pa for 1yr 5 mths = $12.75M + repayt of 180 M = $192.75
So profit is $192.75M EBITA for 17mths oil production in USA on LNC capital of only $60M
I realise that I haven't accounted for the extra funding required for expansion as it would normally be drawn down progressivley. If the entire $60M ($300M- $240M) is drawn down then the interest would be less than $4M. So $192.75M less $64M is $128.75M EBITA
Using the same sale price and cost price for a barrel of oil, then I believe the following is achievable-
6 Mths to June 2013 - $60 gross profit X12000 booX 175 days = $126M
12Mths to June 2014 $60 gross profit X 14,000 boo X 350 days = $294M
12 Mths to June 2015 $60 gross profit X 18,000 boo X 350 days = $378M
12 mths to June 2016 $60 gross profit X 20,000 boo X 350 days = $420M
Total profit over 3.5 yrs $1,218M EBITA
I consider that this is a conservative estimate of potential earnings and not realised by the general investor. Perhaps RBS will assist to correct with regular Broker reports.
I welcome any discussion on this estimate.
LNC Holder
- Joined
- 1 August 2010
- Posts
- 164
- Reactions
- 0
- Joined
- 30 June 2008
- Posts
- 15,357
- Reactions
- 7,232
Nice set of figures there Mickel. And it doesn't even consider further coal sales, royalties from Adani coal sale (around $100 m a year from perhaps 2014 onwards) possible GTL plants, commercialization of Hydrogen fuel cell technology (not to mention 12% share in AFC..) and so on.
I suppose my question would be how quickly will LNC start to distribute earnings as dividends to shareholders ? I notice that in the energy industry dividends are kept relatively low and the theory is that increasing SP rewards shareholders.
I'm not sure if that model will continue to work with a cautious perhaps declining share market. On the other hand solid cash flow with a quality franked divided stream would reward shareholders and underpin increases in SP: After all a simple 15c a share dividend will distribute $75m a year which seems very achievable on the projections outlined.2twocents
I suppose my question would be how quickly will LNC start to distribute earnings as dividends to shareholders ? I notice that in the energy industry dividends are kept relatively low and the theory is that increasing SP rewards shareholders.
I'm not sure if that model will continue to work with a cautious perhaps declining share market. On the other hand solid cash flow with a quality franked divided stream would reward shareholders and underpin increases in SP: After all a simple 15c a share dividend will distribute $75m a year which seems very achievable on the projections outlined.2twocents
- Joined
- 27 May 2008
- Posts
- 165
- Reactions
- 0
http://www.lincenergy.com/data/media_news_articles/LNC-Presentation-630.pdf
pentland and emerald approx $1b?
"Two other non‐core coal assets will be for sale for approx AUD1 billion"
pentland and emerald approx $1b?
"Two other non‐core coal assets will be for sale for approx AUD1 billion"
Mr.Z
Don't know if you use candles but I noticed a possible reversal pattern (Hammer) today with the OBV moving up. Wait for confirmation tomorrow, in this current market who knows what will happen but with the big orders coming in the later part of the day it looks encouraging!
Don't know if you use candles but I noticed a possible reversal pattern (Hammer) today with the OBV moving up. Wait for confirmation tomorrow, in this current market who knows what will happen but with the big orders coming in the later part of the day it looks encouraging!
Hi Jonathan
Those two coal assets are Teresa and one 85km-150km NW of Hughenden which they are currently drilling.
The Pentland asset has previously been valued by LNC at $50M.
There has not been much mention of this tenement NW of Hughenden but the tenements are in the list in the Mar 2011 qrtly report.
- Joined
- 1 August 2010
- Posts
- 164
- Reactions
- 0
Nice little start to todays trading session.
SP hovering arond A$3.20
http://www.lincenergy.com/data/asxpdf/ASX-LNC-333.pdf
Lnc holder.
SP hovering arond A$3.20
http://www.lincenergy.com/data/asxpdf/ASX-LNC-333.pdf
Lnc holder.
- Joined
- 1 August 2010
- Posts
- 164
- Reactions
- 0
I've been scouring the media for any new Linc related news, without success this weekend.
The US market in particular was hit hard last week, which usually effects the ASX.
I'm obviously bullish with Linc, but have recently hedged to cover any short term downturn.
It's becoming a wee bit tough to judge what's going to happen with the Linc sp since the recent acquisitions, spudding in Arckaringa Basin, and the ongoing coal tenement sale.
Any technicals, or general thoughts out there?
LNC holder.
The US market in particular was hit hard last week, which usually effects the ASX.
I'm obviously bullish with Linc, but have recently hedged to cover any short term downturn.
It's becoming a wee bit tough to judge what's going to happen with the Linc sp since the recent acquisitions, spudding in Arckaringa Basin, and the ongoing coal tenement sale.
Any technicals, or general thoughts out there?
LNC holder.
- Joined
- 30 June 2008
- Posts
- 15,357
- Reactions
- 7,232
God only knows what is going to happen !!
I suppose one given should be that sometime in the next 1-2 months LNC will announce an unconditional sale on Teresa. That would be worth another $500m + ($1 per/share ) One would think that should give some boost to the SP
Possible oil/gas flows in Arkaringa ? Progress on EOR developments in USA ? Announcements on successful completion of Beta cell for hydrogen fuel cell ? Other deals for UCG developments ?
On paper LNC should really start to hit its straps by end of 2011. Whether that makes any difference to the share in a stagnant or falling market is another question. And if there is big sell off I just can't see how/why LNC is not going to swept up.
But that wouldn't change the actual coal/oil resources, the value of the UCG and EOR technology and cash in the bank.
I suppose one given should be that sometime in the next 1-2 months LNC will announce an unconditional sale on Teresa. That would be worth another $500m + ($1 per/share ) One would think that should give some boost to the SP
Possible oil/gas flows in Arkaringa ? Progress on EOR developments in USA ? Announcements on successful completion of Beta cell for hydrogen fuel cell ? Other deals for UCG developments ?
On paper LNC should really start to hit its straps by end of 2011. Whether that makes any difference to the share in a stagnant or falling market is another question. And if there is big sell off I just can't see how/why LNC is not going to swept up.
But that wouldn't change the actual coal/oil resources, the value of the UCG and EOR technology and cash in the bank.
- Joined
- 21 September 2010
- Posts
- 9
- Reactions
- 0
Fellow Linc Holders
Does anyone know what Justyn Peters was referring to in his boardroom radio announcement on the 07/06/2011 regarding what he said “We are in the process of securitizing the Adani royalty stream, that should give us another $500,000.00”. He also suggested they would have over $1,080,000,000.00 in the bank by the end of this year. I don’t think this figure includes the sale of what they are referring to as the Northern Tenements, as they are still drilling to identifying the extent of the resource they have there.
Brian
Does anyone know what Justyn Peters was referring to in his boardroom radio announcement on the 07/06/2011 regarding what he said “We are in the process of securitizing the Adani royalty stream, that should give us another $500,000.00”. He also suggested they would have over $1,080,000,000.00 in the bank by the end of this year. I don’t think this figure includes the sale of what they are referring to as the Northern Tenements, as they are still drilling to identifying the extent of the resource they have there.
Brian
- Joined
- 30 June 2008
- Posts
- 15,357
- Reactions
- 7,232
Last year LNC sold it's coal deposit for $500m cash plus a $2 a ton royalty for all coal that would produced over the next 20 years from the mine.
At the time Adani said it was intending to produce around 50 million tonnes a year of coal from 2014 onwards. It is possible for LNC to sell this guaranteed revenue stream to another party for immediate cash (obviously for other investments .) It sounds as if that is the process they are taking.
Thanks for referring to this broadcast, Brian.
Justyn mentioned $360M in the bank and trebling it by end of this year. ie
Bank $360M
Sale of Teresa $500M min
Selling the Adani royalty $500M min
Total $1360M min
I think that is their aim. Whether it all comes to pass by Dec 31 2011 is another matter given their record.
The link to this presentation is-
http://www.brr.com.au/event/81513/l...ecutive-general-manager-of-investor-relations
- Joined
- 30 June 2008
- Posts
- 15,357
- Reactions
- 7,232
It's interesting to have a look at the state of almost all the second and third tier shares over the past couple of months when discussing where LNC stands.
Fact is a quick check on most shares, particularly the second and thirds tiers ones will show quite steep falls in May and June. Lack of buyers, general economic concern and I guess some tax loss selling has seriously affected SP across the board.
Not so with LNC It was around $2.90 in late April and fell to $2.70 in early May. It currently stands at $3.15. In the circumstances thats pretty creditable.
The background facts are that LNC appears confident of selling it's next coal mine with a $500m + price. And the income prospects from the recent EOR developments appear immediate and very profitable.
I don't think this value will necessarily be immediately reflected in a booming SP. But at some stage sheer financial results will have to have some effect. This could a very good time to accumulate in a cashed up, resource rich company.
Fact is a quick check on most shares, particularly the second and thirds tiers ones will show quite steep falls in May and June. Lack of buyers, general economic concern and I guess some tax loss selling has seriously affected SP across the board.
Not so with LNC It was around $2.90 in late April and fell to $2.70 in early May. It currently stands at $3.15. In the circumstances thats pretty creditable.
The background facts are that LNC appears confident of selling it's next coal mine with a $500m + price. And the income prospects from the recent EOR developments appear immediate and very profitable.
I don't think this value will necessarily be immediately reflected in a booming SP. But at some stage sheer financial results will have to have some effect. This could a very good time to accumulate in a cashed up, resource rich company.
Wheres my dividend cheques PB.
I'm sure there ready to be sent out , i want a big healthy 5c per share
You've received your dividend for this F/Y Atomic. Hopefully there will be another dividend of at least 10c in the first half of the 11/12 F/Y after LNC sells Teresa.
not quite , but i can still dream , 10c would be top shelf too.
would fire up the sp around divi time too
