Personally I think the company got what it deserved. Nobody can blame the shorts this time for the SP dropping from $1.40 to below $1 over the last few weeks.
The facts are a few years ago the company was in a fantastic position. They were on the verge of fully devloping UCG, they had a future revenue stream from the Coal Royalty agreed and they had $500M in cash with no debt on the balance sheet and a SP over $5.00.
All they needed to do was keep the cash burn low and spend all their time developing UCG overseas with the $500M of cash they had.
By buying high risk Shale, Alaska and US oil assets they are now in a position where they have a very high level of debt, they are still burning cash each quarter and they have had to delist from the ASX and move to SGX to try and either sell off the coal assets or raise even more debt.
If the assets are each worth what LNC claims then why hasn't someone tried to buy them.
The shale dream is just a dream as its clear by now that nobody was prepared to take the risk by spending a lot of money drilling exploration wells.
If alaska fails again they will have serious cash problems. They overspent on the drilling last year and didn't even drill all the planned wells, so whats to say it will not happen again.
Good luck to all the true believers that are still staying in the stock but I would suggest you keep a very close eye on the companies cash and debt as things could get very ugly next year if things do not go to plan.
LNC Price at posting:
99.5¢ Sentiment: Sell Disclosure: Not Held
