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Investor Linc Newsletter

March 2013 /22

SAPEX

SAPEX SHALE OIL THE NEXT LINC ENERGY FRONTIER

PROSPECTIVE RESOURCES COULD BE AS LARGE AS 233 BILLION BARRELS RECOVERABLE (UNRISKED)

As reported at the end of January, two independent experts have confirmed three formations in the Arckaringa Basin (South Australia) have significant shale oil resource-play potential.

Analysis presented in separately commissioned reports by DeGolyer and MacNaughton (D&M) and Gustavson Associates (Gustavson) indicate the Stuart Range formation and the underlying Boorthanna and Pre-Permian formations are rich in oil and gas-prone kerogen, which may form the basis of a new liquids-rich shale play. 

Linc Energy holds a 100% interest in licences and applications covering more than 65,000 contiguous square kilometres (16 million contiguous acres) in the Arckaringa Basin. D&M estimate total unrisked mean prospective resources for the Arckaringa Basin at approximately 103 billion barrels of oil equivalent (BBOE).   D&M has applied a probability of geologic success to estimate unconventional prospective resources on a risked basis of 3.5 BBOE at 51% liquids.

Gustavson estimate total unrisked prospective resources for the unconventional reservoirs in the Arckaringa Basin to be 233 BBOE. Gustavson has also conducted a preliminary assessment of resource potential in conventional reservoirs in portions of the Arckaringa Basin, amounting to a further 125 BBOE on an unrisked basis. These estimates on the un-conventional reservoirs provide encouragement that the balance of the basin may also be prospective for conventional hydrocarbon deposits and suggests that additional work on conventional resource potential is justified.

Linc Energy CEO Peter Bond said: “We are delighted that both D&M and Gustavson have confirmed our internal views about the significant opportunity within the Arckaringa Basin. 

“The findings in these reports are consistent with our view that the various formations within the Arckaringa have excellent shale oil resource-play potential with total organic carbon levels, permeability, porosity and thickness comparing favourably to other high-volume unconventional shale oil plays such as the Eagle Ford and Bakken in the United States. 

“The sheer size and scale of our assets in the Arckaringa Basin is incredibly exciting and we look forward to working with Barclays Bank to find the right partner to optimise the potential of these assets.  It is a very rare occurrence for one company to control an entire basin of this size and potential.  It is a great opportunity for Linc Energy shareholders. 

“Linc Energy is committed to delivering the best outcome for the development of this acreage and maximising value to shareholders. The best way for us to do that is to bring in an industry expert with the know-how and funding to drive this asset forward to commercial production as promptly and as efficiently as possible” he said.

Barclays Bank PLC has been appointed as a strategic advisor on the SAPEX petroleum assets within the Arckaringa Basin to prepare for a sale process aimed to find an experienced industry partner to join the Company in a JV or other arrangement to further explore and develop the potential for shale oil resources.  Planning for additional drilling and seismic to further define the shale oil resource potential continues.