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Oil and Gas

Gulf Coast, Texas and Louisiana

Linc Energy's Gulf Coast properties cover 15,521 net acres across Texas and Louisiana and include 150 producing wells over 11 active fileds (out of 14 total fields), both onshore and in shallow state waters. These fields are characterises by salt domes or geological structures related to deep-seated salt movement that have been a significant source of oil production since the turn of the twentieth century.

On 28 July 2015, Haas Petroleum Engineering Services, Inc. issued a reserve report effective 30 June 2015 estimating Proved (1P) reserves of 7.7 million barrels and 3.3 billion cubic feet of natural gas (equating to 8.3 mmboe) and prospective resource of 2.5 million barrels and 3.5 billion cubic feet of natural gas (equating to 3.1 mmboe). The PV10 of the Gulf Coast assets attributed to 1P Reserves is USD$193.9 million(1). The decrease in value relative to the last Qualified Persons Report issued in December 2013 is primarily due to a decline in oil prices over the period, as well as a decrease in Proved Developed Non-Producing reserves.

For the financial year ended 30 June 2015, the average production of the Gulf Coast properties was 3,423 gross barrels of oil equivalent per day, while total cost per barrel of oil produced by Linc Energy, including lease operating expenses, workovers, production taxes and general and administration expenses, has decreased to below USD$30 per barrel. Linc Energy’s highly experienced Gulf Coast operational team analysed the significant amount of available 3D seismic coverage of the region to identify development opportunities, with the team currently adopting a moderated capital expenditure program focused on identifying highly economic recompletions and new wells selected and drilled based on risked net present value analysis.


* Notes:
(1) Qualified Persons Report by Ryder Scott Company, L.P. dated 30 June 2015.


Powder River Basin, Wyoming

Linc Energy's Wyoming conventional oil asset in the Powder River Basin spans 28,741 net acres and contains 31 producing wells across 3 fields, namely the Big Muddy, South Glenrock and South Cole Creek.

On 30 July 2015, Ryder Scott Company, L.P. (Ryder Scott) issued a reserve report effective 30 June 2015 estimating Proved (1P) reserves of 551 thousand barrels of oil and possible reserves of 66.9 million barrels of oil (3P of 67.5 million barrels of oil). The PV10 of the Wyoming asset is USD$428.4 million comprised of Proved reserves of USD$5.6 million and Possible reserves of USD$422.8 million(1). The decrease relative to the last Qualified Persons Report issued in December 2013 was primarily due to a decline in oil prices over the period. 

Linc Energy is pursuing an Enhanced Oil Recovery strategy for the Wyoming assets, utilising tertiary recovery via carbon dioxide (CO2) injection. CO2 is considered one of the best mediums to use in this process as it acts as a solvent to sweep incremental oil to surface. To date the Company has completed reservoir modelling; a pre-feasibility study of CO2 pipeline routes and an engineering study on the CO2 recycle facility.


* Notes:
(1) Qualified Persons Report by Ryder Scott Company, L.P. dated 30 June 2015.


Umiat, Alaska

Linc Energy's Umiat field comprises leases covering 18,540 net acres within the National Petroleum Reserve of Alaska which independent analyst's Ryder Scott have estimated to contain one billion barrels of oil(1). Considered to be one of the few remaining undeveloped light oil reservoirs in North America, this is a strong asset Linc Energy is advancing through the development stage.

Plans are in place for a high quality project with attractive economics and well-defined export options. The  Company is targeting a peak production of 30,000 to 50,000 barrels per day, which reservoir modelling and flow testing at feasible rates has supported as an attainable output.

Linc Energy has previously successfully drilled and completed well number 23 in the Umiat field, which produced a light sweet crude oil at a peak rate of approximately 800 BPD providing excellent quality 38.5 API gravity oil, which is equivalent to a diesel class product flowing from the ground. The well design employed the latest in drilling and completion technologies delivering a 640 metre horizontal completion just 300 metres below surface. This successful outcome, combined with the knowledge gained from a former exploration season in Umiat, confirmed the quality and potential of this asset. 

In the 2015 financial year, Linc Energy completed an engineering study to determine potential road and pipeline alignments and infield pad footprints, continued environmental studies, progressed regulatory compliance and prepared the property where possible at this stage in the process for future production.


* Notes:
(1) Qualified Persons Report by Ryder Scott Company, L.P. dated 11 December 2013.