amazing - must be ann soon?!, page-56

"Bond believes his plan for the company to unlock value will play out over the next 12 to 18 months. Within that time frame, he says, he expects all the oil assets in the US will be spun off and he will have forged joint ventures with overseas partners to install UCG.

Bond sees an immense opportunity to build an empire he hopes can rival the world’s largest oil companies by taking advantage of potentially hard to get to resources in places where energy is scares and expensive. He’s pinpointing countries including Poland, parts of Africa, Bangladesh and Pakistan, as places where coal may be hard to get to and gas prices are high. He’s in the process of entertaining potential investors at the Chinchilla site, including a recent tour with Russian billionaire Roman Abramovich.

“He sees himself as the next [Royal Dutch] Shell, the next Chevron [Corporation], or the next Total [S.A.]… everything he’s doing is one step closer to his goal of building a multi billion dollar energy company,” says Janz."

The above helps me to put in some perspective, the future direction.

LNC had some very qualified oil people on their staff a few years ago. They would have been important in the GTL knowledge area. The Queensland Govt under Nana Blight totally stalled LNC's plans when they decided to favour CSG over UCG, which also affected tenements with oil having precedence over coal tenements. This has resulted in a setback in the business plan, one that needed to be adapted for the times and problems.

There were cases of both sides having a claim to the same dirt, or parts thereof, so the gas took priority. This set back LNC's plans for Chinchilla, and GFC also was another setback. So PB used his staffs’ depth of skills to branch out into oil for short term cash flow, but it was not to distract from his long term goal of GTL, it just had setbacks in that time, and PB had to wait for those setbacks to be cleared. It is not unusual for business to suffer these due to political manipulating and twists. I myself have had similar setbacks due to govt hindrances…..costing me several years. One needs to be able to survive these hindrances until time sorts them out.
LNC needed cash flow during this period, and developed a business plan for the interim. It utilized its in house knowledge pool to take advantage of some distressed asset purchases in oil, and at a time when they needed to buy time. They also took advantage of the $ rate. If forecasts are true re a new energy period for America, not only being energy sufficient, but an energy exporter due to cheap and plentiful gas, then the $US could again be strengthened in the next few years giving another arbitrage position for a greater profit on sale resulting in a lower future $A. That aside, by improving the oil production (not yet clear due to shutdowns and workovers causing interruption to average daily production currently), according to 2 valuations, the total cost of Gulf assets of $310m is now valued at $650m. With further improvements, this could be even greater.
Hopefully this may all be behind us soon, after costing us years in setbacks. So if PBs plans of the next 12-18 months (or possibly longer) for securing a number of possible UCG JVs, then the disposal of the US projects, including adoption of new technology and the drill results for Umiat, could well be the perfect scenario for the oil assets disposal, and simplifying the alternate clean energy dreams of UCG/GTL. It all seems to tie in. Businesses need to be adaptable during times of crisis, and willing to change and adapt, until the cycle has changed, and then they can go back and continue their real long term business plan.
With the Qland govt due to report soon on the study into UCG, together with the public dislike of CSG and its problems, the need to provide new energy with the closure of some coal fired power stations and new world technology directions, the hope of a possible OK on the Chinchilla site for expansion may all be falling into line for a return to the original plan. Include some JVs overseas on UCG during the following 12-18 months, then the need for oil would have served its purpose, and could be sold off at a nice profit, with the coy able to proceed with its prime objectives.