opportunity, page-9

Hi Bonehead,

my rationale is that both companies have made announcements that contained valuations or estimates of resource available (BRU at one stage released a report by Casimir Partners valuing its shares at $72 each based on de-risked position). BRU has had some promising announcements as has LNC recently. However the LNC announcement similarly values oil/gas reserves that have not yet been proved or been shown to be able to be extracted easily or economically.

Both company releases have overlooked the significant costs to develop infrastructure and pipe the gas to a processing facility. Risks such as indigenous land claims have similarly been overlooked as as the time to put the infrastructure in place. Hence BRU is trading at $2.40 (whereas Casimir Partners values it at $72 when risks removed) and LNC should similarly be discounted.

I suspect that shorters will soon move into LNC.