Linc Energy

[Movieguy]

Just became aware of this stock today thru a newsletter promotion, which makes me initially wary.  But in conducting some initial research including http://seekingalpha.com/article/1136541-linc-energy-might-have-just-won-the-oil-lottery  ; I am becoming more impressed.  Certainly seems to have enormous potential.

I would be very curious to know what more knowledgeable members of SHU think.

[admin]

Well, thanks for that, we'll have a look

[Movieguy]

HUGE news today:
http://www.lincenergy.com/data/asxpdf/ASX-LNC-505.pdf

Would be curious to see how this affects the stock and then extrapolate to IOC for its upcoming announcement.

[Captain Mac]

HUGE news today: http://www.lincenergy.com/data/asxpdf/ASX-LNC-505.pdf Would be curious to see how this affects the stock and then extrapolate to IOC for its upcoming announcement.

Linc announced yesterday that they are delisting in Australia and listing in Singapore. LNC has long been disparaged by the Aussie Institutional Brokers and is, in the opinion of it's CEO, Peter Bond, and largest shareholder, underappreciated and undervalued by Aussie shareholders. He is probably right but also took part of the blame in a televised interview yesterday. In Mr Bond's opinion the Singaporean and by extension, Chinese investors, are more understanding of Global Energy plays. There was a further announcement today about further coal acquistions in Queensland that seemed to cause a bit of a spike but pps has since drifted down.

Those with long memories may recall that IOC delisted in Australia following a tortuous route to its NYSE listing via Toronto.

[Kaliboo]

Just became aware of this stock today thru a newsletter promotion, which makes me initially wary.  But in conducting some initial research including http://seekingalpha.com/article/1136541-linc-energy-might-have-just-won-the-oil-lottery  ; I am becoming more impressed.  Certainly seems to have enormous potential.

I would be very curious to know what more knowledgeable members of SHU think.

Thanks.  Seeing your post is the 2nd time I've stumbled across this company.  I think my young, new investor, son first mentioned them to me.  Their Austrailian shale opportunity sounds really exciting and is what got my attention as I'm sure yours.  I think I will relook at at especially if they will be drilling in 2014.  I recall seeing that their asset mix seemed really oddball scattered all over the place technically and all over the world for such a small company of 400+.  Their GoM operations appear to be a necessary cash cow to fund some of the rest of their less conventional activities.  Their coal gasification process sounds really risky.  There has to be a gas tight cap rock and trap to keep the gas in place or it may seep away into overbearing sediments.  I can't get excited about investing in any coal miners and apparently that is part of their asset mix but they just announced they have put that into a separate company with the hopes of selling it:  http://www.newemeraldcoal.com/wp-content/uploads/2013/11/Media-Release-131113.pdf.  Their oil production update was recently announced: http://www.lincenergy.com/data/asxpdf/ASX-LNC-513.pdf.  Of their 6900 BOEPD production from USA assets as of Oct 18, 2013, about 1400 BOPD + 1.2 MMSCFD  is coming from one horizontal well.  Nothing like have much of your eggs in one basket.  They say they are confident to increase production to 8-9 KBOEPD by year end and have a drilling program in place in the GoM to make it happen.  I see alsow they are pursuing CO2 EOR project in an oilfiedl in the Powder River Basin.  For such a small company, this is very broad range of very different operations.  It's hard to be good at all of these much less one.  Sounds like they are slowly finding that out and trying to work down to a core set and aren't ready to kiss off the insitu coal gassification (UCG) and GTL.  For coal rich, but oil and gas poor countries, the UCG theme sounds like a path to energy independence for them while resolving the pollution issues, but I don't know anything about the environmental risks of UCG.  So this leaves the other science project which is the Australian opportunity.  They are throwing a lot of darts hoping they will connect big on something.  Companies like Shell and others already operate GTL plants and are building more.  Adding another costly step to the process, i.e., drilling wells that require tremendous amounts of energy to heat the coat to convert it to syngas that can be produced by yet more wells that have to be drilled AND THEN send it to a GTL plant, is probably never going to be economic unless the coal is almost free.  So all that leaves on the table is the opportunity "down under" as a potential large value driver in what they call their SAPEX Division (shale oil).  Shale oil is  typically mined and the oil is extracted in a retort.  Their site is not clear as to whether they expect any crude oil that could be flowed by vial a well.  Mining and processing shale oil is a very costly, dirty process.  Most of the shale oil potential actually is in the USA in Colorado.  Super majors have for years tried to figure out how to unlock this huge volume via in situ conversion processes, but have walked away multiple times after failure.  Reportedly it takes 2 bbls of oil equiavlent energy to produce 3 bbl of oil; not very efficient.  So unless they are thinking about a mining operation; the chances of them succeeding with something in situ is nil.  In one case I heard that the gigantic power plants would be required to provide the electrical power to heat the wells in an in situ conversion process.  It's clear since their 2011 discovery things have moved slowly.  Anyway that's my very quick look over and opinions. This is all highly unconventional.  I'd need to take a much deeper look to create a postive feeling.

[Movieguy]

Thanks, Kaliboo.