the week that waz!, page-8

Just a quick thankyou to all the LNC long termers who contribute.
I have very little time to devot to my family investments as I am the CEO of the family company.
I have found the regular posts of the LNC Hotcopper posters invaluable and you have all hepled a great deal when times have been difficult. Whether you are positive or negative the debate provides a stimulating environment.
I wish I had time to contribute more but alas that is not the case.
I will only conribute when I feel I have something of value to you all.
At this point after a Phenominal turn around in the SP,I would like to repost an oldie. When taken in todays context it may have some value.
n.b. I will see LNC over the $5 mark and then consider the future in light of the facts at that point.
Thanks again
U

Post:
Following the coal sale PB as the largest shareholder and CEO could have shut up shop and invested:

2010 to 2015
$500M at 8% franked return would be $40M as a dividend over 440M shares is 9% return (franked) with very little risk.

2015 to 2035
This could have continued for say 5 years until the Adani royalty came on stream at say $2 per tonne for conservatively 25M tonnes per annum or $50M per year… $35M after tax. Total A/T income $75M or 17% return franked.

In the background for very little cash burn the chinchilla UCG/GTL development could continue as an asset based in intellectual property.

Additional coal sales could provide further value and the considerable holdings that the company owned at that point would still leave the door open for UCG development at some point.

The CEO would be a made man $30M franked income per year personally for a very long time!

Or the alternative strategy was to take LNC to the next level. A difficult and more risky proposition. That decision would weigh heavily on the CEO and his management team ( powerful individuals surround themselves with talent…trump101).

Expend the coal sale funds integrating energy assets around the world, incorporate leading edge technologies that are symbiotic and develop internal cash flows and partnerships to morph the company into a major energy producer. Potentially this will deliver far more shareholder value over time.

Each holder has to measure the company’s success and the speed of delivery with their personal slide rule.

Asset purchases have been sound and fit in with the long term strategy.
Sound alliance have been made in hydrogen cell production and carbon sequestration
Failure to make subsequent coal sales has put pressure on cash flow
Slower than expected oil production increases have put pressure on cash flow.
The world economic rebound and continuing credit crisis have made M&A difficult and slow.

In nearly every case delivery has been slower than forecast and I believe we are all paying the price for this in terms of the share price which reflects the markets belief that results will be delivered on time at on or above forecast. The market judges improvement not potential.

Personally I believe all the pieces are still in place and the company will dvelop along the plan successfully. I am a medium to long term investor and I hope to be taking profits from this company over the next 10 to 15 years.

Ramping up…Ramping down its all a bit infantile. I guess everyone makes a judgment based on what they consider the most likely outcome.

Not advise just thoughts and meanderings. DYOR… IB