01 CHAIRMAN'S MESSAGE

It gives me great pleasure to report on the activities and progress of the company over the past year.

The focus has been placed on the most expeditious route to true commercialisation. The outcome of this process has seen the company enter a new era with a balanced position evenly spread across traditional coal, oil and gas deposits to be either developed or value added and on-sold. This is underpinned by our ‘core’ business of clean energy and clean fuel.

The company’s entry into traditional oil production in the United States demonstrates the continuation of the entrepreneurial spirit on which the organisation was founded. Acquisition of resources that have substantial potential upside is one of the foundations and continuing cornerstones of company philosophy. We are already enjoying a modest and steady income stream from asset acquisitions in Wyoming and we are actively seeking to add additional capacity to this base. The Umiat (Alaska) project, although long term in nature, has the potential for an enormous upside. Add to this the company’s continued drive towards enhancement and commercialisation of Underground Coal Gasification (UCG), Gas to Liquids (GTL), power generation, and the utilisation of high value UCG gas streams as part of an Enhanced Oil Recovery (EOR) process and one begins to understand we are building a fully-integrated energy solution for the future.

Our world UCG leadership was underlined by further technological advances at our demonstration facility near Chinchilla in Queensland, continued production of power at the world’s only commercial UCG operation at Yerostigaz in Uzbekistan (which this year celebrates 50 years of production) and, in a world-first, we showcased our unique ability to produce ultra-clean synthetic diesel from UCG to GTL by using this fuel to drive across Australia from Chinchilla to Perth.

The company’s entry into traditional oil production in the United States demonstrates the continuation of the entrepreneurial spirit on which the organisation was founded. Acquisition of resources that have substantial potential upside is one of the foundations and continuing cornerstones of company philosophy.

Safety of our workforce continues to be one of our driving forces. Our own internal workforce recorded zero lost time injuries (LTI) for the year. The only blemish was where an employee from one of our South Australian drilling contractors suffered an LTI from a minor injury sustained whilst carrying out cleaning duties. I would like to congratulate our staff for maintaining our high safety standards.

We continue to work at and believe we are achieving success in our relationships with our stakeholders including governments, contractors, landholders and investors throughout the world and we especially appreciate our strong local community support.

I would like to thank my fellow directors for their hard work and contribution over the past year and the Board wishes to record its thanks for the efforts of all Linc Energy employees throughout the world during what has been an especially busy period. In particular I would like to thank Chief Executive Officer Peter Bond for his energy, passion, vision and leadership of a great team of highly talented individuals now spanning multiple global locations. I would especially like to thank our shareholders for their continuing support as the company enters the next exciting phase of its operations.

Yours sincerely,

Ken Dark
Acting Chairman