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I think LNC is in the business of making money from energy development and sales .. and is quite willing to look outside the square in the process.Certainly Peter Bond started with the coal to diesel concept. I think the reality of how much effort it would take to refine the UCG process and then build cost effective GTL plants has been a very sobering experience. The decision to develop and sell off unneeded coal mines to basically provide working capital was opportunistic but highly effective in protecting LNC's financial situation. Having a $300m bank account with possibly another $4-500m coming in a few months is an outstanding outcome. (and lets not forget the 20 year coal royalty stream worth .... well lots and lots...)The decision to buy into depleted oil wells and use CO2 injections to boost production is, IMO, quite inspired. LNC has the UCG technology at its fingertips so what would cost other companies a bundle will effectively be done in house at inhouse costs. Given the lead times for GTL development the opportunity to obtain relatively quick returns from these oil fields seems an excellent idea. The fact that they obtained the fields at quite modest costs is just another feather in their cap.The fundamental game changer in my view is the investment in the AFC fuel cell technology and the Pyromex above ground gasification process which would then enable use of the AFC fuel cell. Being able to use coal either below ground or above ground to produce baseload electricity with no CO2 emissions and no high water use would be a stunning achievement. If properly handled it could potentially replace every coal fired power station in the world and be one of the most far reaching ways of tackling greenhouse gas emissions at a cost effective price.The new shale developments ? I can see a long lead time and a lot of development costs in that project - but then there is the potential value of 8bboe. And this is in a world that rapidly reaching peak oil. It is also worth appreciating that the UCG technology is probably a fair way down the track in terms of turning oil shale into flowing oil. It might only take a few tweaks to get this operational.I think the mechanism of (metaphorically) splitting the company into three divisions makes good organisational sense. It then requires each division to have the talent and working capital to grow their babies. But in the bigger picture they are part of a coherent plan.The possible log jam could come at executive decision making levels. How many processes can Peter Bond be involved in at once ? Are there other effective decision makers in the company who can be the final go to man ?Finally however the one thing we do want to see is positive cash flow ASAP from the American oil fields (or our own if we strike it lucky!!)
I think LNC is in the business of making money from energy development and sales .. and is quite willing to look outside the square in the process.
Certainly Peter Bond started with the coal to diesel concept. I think the reality of how much effort it would take to refine the UCG process and then build cost effective GTL plants has been a very sobering experience. The decision to develop and sell off unneeded coal mines to basically provide working capital was opportunistic but highly effective in protecting LNC's financial situation. Having a $300m bank account with possibly another $4-500m coming in a few months is an outstanding outcome. (and lets not forget the 20 year coal royalty stream worth .... well lots and lots...)
The decision to buy into depleted oil wells and use CO2 injections to boost production is, IMO, quite inspired. LNC has the UCG technology at its fingertips so what would cost other companies a bundle will effectively be done in house at inhouse costs. Given the lead times for GTL development the opportunity to obtain relatively quick returns from these oil fields seems an excellent idea. The fact that they obtained the fields at quite modest costs is just another feather in their cap.
The fundamental game changer in my view is the investment in the AFC fuel cell technology and the Pyromex above ground gasification process which would then enable use of the AFC fuel cell. Being able to use coal either below ground or above ground to produce baseload electricity with no CO2 emissions and no high water use would be a stunning achievement.
If properly handled it could potentially replace every coal fired power station in the world and be one of the most far reaching ways of tackling greenhouse gas emissions at a cost effective price.
The new shale developments ? I can see a long lead time and a lot of development costs in that project - but then there is the potential value of 8bboe. And this is in a world that rapidly reaching peak oil. It is also worth appreciating that the UCG technology is probably a fair way down the track in terms of turning oil shale into flowing oil. It might only take a few tweaks to get this operational.
I think the mechanism of (metaphorically) splitting the company into three divisions makes good organisational sense. It then requires each division to have the talent and working capital to grow their babies. But in the bigger picture they are part of a coherent plan.
The possible log jam could come at executive decision making levels. How many processes can Peter Bond be involved in at once ? Are there other effective decision makers in the company who can be the final go to man ?
Finally however the one thing we do want to see is positive cash flow ASAP from the American oil fields (or our own if we strike it lucky!!)
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