Exxaro binding deal looks likely. This is according to Exxaro at least who have Linc Energy UCG as a key element of their future expansion strategy.
US oil cashflow is positive once you exclude the Umiat project and north American UCG activity (Linc Energy Operations in Caspar and Anchorage)
Cash burn overall is indeed an issue until income exceeds it. Income from monetizing UCG looks likely with Exxaro this year and maybe DTEK not long after that. Oil production set to increase a bit (2000 BOPD headline exit rate). All of these will help cashflow but none of these entirely fix this issue.
Shale - we will soon see what becomes of this. Next quarter. This might fix cashflow issue. Adani is progressing to plan so looks likely to help Linc cashflow.
Alaska was not a total disaster although it was well short of my expectations mostly thanks to the weather. US navy drilled lots of dry holes and Linc have only drilled one hole. Linc managed to get a frozen complete core from #18 to test in lab experiments over the summer to work out the best approach. If next season has not delivered proof of commercial production viability then I will agree it was a bad move. Until then we wait .
According to Hindsight Investments Pty Ltd. Linc should have executed the buyback below 50c, hindsight is awesome. More seriously though the share buyback will be a great move if Arckaringa or Umiat live up to half their potential.
LNC Price at posting:
$1.45 Sentiment: LT Buy Disclosure: Held
