re: Ann: LNC Oil and Gas Division Results for...
Szaba I still think that the production as at 31st December 2012 should be the starting point.
If what you are saying this headline number for 31st December may be a bit dodgy and may not be correct then Linc should not have published it and that may come back to bite them hard from investors who bought shares based on that reported number.
As far as the margin goes let not forget that Linc have moved the US Admin costs out of this subsidiary and into the corporate costs. This amounts to $21.4M for the 9 months to March 2013. If this had been left in, the profit margin would not look anywhere near as good as it does.
So in summary to achieve the 10,000 bopd gross figure that linc expect to shortly get they will need to roughly double current production.
Considering that bopd dropped from 4667 (31st Dec 2012) to an average 3793 for March 2013 quarter even though they drilled 9 new wells in the quarter, I personally think that 10,000 bopd will be very difficult.
They can achieve it by drilling a heap of new wells but its all about cash flow and if the extra revenue is less than the cost of all the new wells they will have a problem with cash.
LNC Price at posting:
$1.53 Sentiment: Sell Disclosure: Not Held
