shorters providing opportunity?, page-17

Thanks Yong,

I’m happy for people to disagree with me, but be constructive, as you have clearly done. I am as bullish on LNC as you are, but fellow investors are bullish for very different reasons; some oil & gas, some coal some UCG-GTL. I’m simply suggesting a way that we all can win, at the expense of shorts. Let’s find a way where every shareholder can get what they want, while allowing each segment of LNC to grow unhindered.

I don’t think it is crazy to question a CEO when the share price has fallen 62% since Nov’s AGM, let alone 80% year on year. Crude, coal and the AUD did not move by that much. Clearly it’s management and LNC strategy. Heck, we would have been on to our third CEO by now, with at least one significant strategic shift. Admittedly, LNC would never have gotten to where it is now without an entrepreneurial wheeler and dealer such as Peter Bond. He’s a legend. And we need him to play to his strengths. Companies go through different phases, and require different leadership skills for each phase. It’s not about growth in market cap; we are back where LNC traded at in Jan 2008.

FY13 halving of non-oil and gas costs to $20 million cash costs per quarter ($80m per annum) needs to be questioned (as the shorters have done) and be addressed. How much to coal how much to clean coal, guess we’ll never know the historic split, but going forward it should be transparent.
Let’s allow the Coal and Clean Coal segments take on debt, raise equity and dilute to their heart’s content for research, exploration, capital and deal making. Most analysts are confident of the Adani royalty and Teresa/Pentland, and have no doubt that LNC will find institutional support under Michael Mapp. Let LNC Coal be careful about their drilling campaigns, aligned with the best outcome and immediate needs.

The highest risk-reward segment is Clean Coal; let it live and die, in accordance to the outcomes of the Golden Concord, Poland deals etc. Investors need to implement stop losses on their trades, gamblers need to set a limit when they gamble, and so do CEOs in when to recognise sunk costs. If LNC Clean coal pockets the $120m, it’ll be a historic moment, allow them to quarantine those funds for their needs and to roll it over to Poland, Wyoming, etc.
All I ask is for the ability to de-risk Oil and Gas from the rest of LNC, allow the team to thrive on it’s own accord, so as to allow shareholders to earn a tangible annual return via a dividend on our LNC investment. Allow the residual cash flow produced by the division to go towards Umiat’s multi-northern winter drill campaign.

In times of rapid and significant wealth destruction, it is our right as shareholders to question. Let's win, and let darwinism take its course.