nice jump - is ann coming?, page-31

szaba
Even if they could recover 10% of 233 Bboe its pointless if you can't do it at a commercial profit.

Just read Hotrocks previous post, he knows what he's talking about and he's not very optimistic about the prospect.

Also Reg Nelson of BPT laughed at this when asked and said that there was only very minimal information to evaluate Arckaringa and he's the best qualified person in Australia if not the world to talk about Shale.
If it was that good BPT would have been buying LNC shares and would have already made a farmin deal as history shows that's what they do when they see something good.


The bit you are missing is to develop any of these assets requires huge amounts of money and Linc doesn't have it.


Similarly to exercise the 49% share with Exxaro would also require a huge amount of money as they would have to fund 49% of all the initial setup costs.


The thing you have to understand is to get anything fully up and running so that it can make a profit and generate cash often requires $Billions to set it up and Linc just doesn't have the cash.


Everyone is hoping the Queensland Gov will change their view on UCG but even if they did PB said several years ago that it would cost more than a $1B+ to fully set up commercial UCG in Australia and they just don't have that sort of money.


Its a great dream that in a few years time 5 or 6 of these projects could be up and running and Linc shares will be $20-$30 but the reality is they are low on cash and they would need $3B+ of up front cash to fully set up these projects.

Their only hope is for outside companies to farmin and pay all up front costs.
In the current market companies are pulling back on capex and cancelling high risk projects.

All Linc can really do is try and sell some of these assets or do what Hotrock suggested and try and give up 100% for a Royalty. But even then companies will just likely sit on the asset rather than develop it.


Its all about CASH, if you don't have the cash you can't develop the assets.