where's the $500m gone mr bond?, page-4

Share Guru

If you have been around that long you must be pissed, seeing your investment go from ~ $0.20 to $5.50 to $0.50. I laugh because I am in the same boat, but I still see a future where you prefer to dwell on a pessimistic past. If you really want to get an answer to your question clear your head of your frustration and you will find it.

LNC has always been about UCG but UCG is a money hungry beast (a bit like a wife – so I am told). If you are not in LNC for UCG you are in the wrong stock and you should stop reading this post.

When LNC got its hands on the $500M I guess it had 2 choices, focus solely on UCG and try to build a commercial plant or diversify and get some recurring revenue in whilst they work away at a UCG plant. Focusing solely on UCG would not have been a good idea because I think we all know that UCG commercialization will take a while and will cost well above $500M. So the second option was chosen and LNC went on a shopping spree getting their hands on assets with UCG potential and almost all of them do have UCG potential...including the oil assets.

So the money went into (and not in this order):

Firestone: UCG potential in South Africa, a great idea with a lot of coal and plenty of coal gasification history, albeit above-ground.
Poland: UCG potential and plenty of coal.
UK Coal: UCG potential in UK, plenty happening in the UK and plenty of un-mineable coal there.
Powerhouse: Above-ground gasification, a great insurance policy if the underground gasification didn’t work and good to process any close to surface coal.
AFC: A nice way to utilize the hydrogen byproduct from UCG.
Oil: The oil purchase wasn’t about oil. The oil purchase was about EOR. If UCG is going to really take off it needs to sequester the carbon. EOR is the perfect way to help pay for the expensive CCS. LNC needs some oil assets to play with to get EOR right. Once they get that right, and eventually get a UCG plant going, all the pieces will come together and KaChing!
Blah blah blah, geez this boring, the point is the money was spent on UCG or UCG related assets. If you want to be in UCG, LNC is the best option. Feel free to try to find a better UCG company out there, it might just keep you from whining on HotCopper.