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Investor Linc Newsletter

December 2011 /20

AT THE COAL FACE

ONGOING SUPPORT & TESTING

After an incredibly busy year for Linc Energy’s Exploration team, the South Australian operations in the Arckaringa Basin are now in wind down mode ahead of the summer wet season.  Rigs have been demobilised and site rehabilitation is underway or in some cases, already complete.  Oil and gas wells Haystack 1, William Creek 1 and Cootanoorina 2, completed earlier in the year, have been plugged and abandoned.  Shale oil wells (also under Petroleum permit) Arckaringa 1 and Wirrangulla Hill 1/1A samples are subject to ongoing testing and analysis.  Look out for an update on these wells in the next issue of InvestorLinc.

Exploration has been extremely busy at Chinchilla, supporting construction and monitoring works for Gasifier 5, however the team’s focus has now shifted to Teresa.  A resource drilling program is underway in Teresa with two contract rigs; the Linc Energy owned Linc Rig 1 was also moved from Chinchilla to focus on Teresa exploration during November.  The objective at Teresa is to upgrade resources and to construct monitoring sites to assist in the Environmental Impact Statement (EIS) assessment process.

Unconventional - South Australian oil shale discovery

Two wells for stratigraphic control and deliberate prospecting for oil shale, Arck 1 and Wirrangulla Hill 1 were drilled during August and September. 

True to the well prognosis, the Stuart Range Formation in Arck 1 possesses a high organic carbon shale which sits early in the oil generating window.  Extended testing of the Arck 1 samples is underway to better understand the oil generation potential and maturity along with the samples from the Wirrangulla Hill site.  The confirmation of an unconventional hydrocarbon play in the Arckaringa is an exciting development for the South Australian based exploration team and goes some way to illustrating the hidden potential in the Arckaringa.  You can read more about the oil shale discovery on page 2.

In addition to the deeper shale, Wirrnagulla Hill 1A encountered a conventional oil fluorescence and tactile oil in a coal seam of the Mt Toondina Formation. The province and source of this oil are currently under investigation.  A similar coal-hosted-oil intersection was made in the Linc Energy well Maglia 1, drilled in 2009 in an adjacent Linc Energy tenure, in a similar structural position relative to the Boorthanna Trough.  In parallel with the drilling results, the recently completed Arckaringa 2D seismic programme results are being processed and incorporated with exploration and drilling data.  The combination of detailed but broad coverage geophysics together with our high quality drilling data are combining to help us to provide superior definition of the oil shale prospects and guide the 2012 exploration direction.