ASX Spotlight Small to Mid Caps Conference 8 March London Peter Bond

Transcription

1 ASX Spotlight Small to Mid Caps Conference 8 March London Peter Bond

2 DISCLAIMER This presentation contains forward looking statements that are subject to risk factors associated with the petroleum and mining businesses. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a range of variables and changes in underlying assumptions which could cause actual results or trends to differ materially, including but not limited to price fluctuations, actual demand, currency fluctuations, geotechnical factors, drilling and production results, gas commercialisation, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates. The oil resource estimates in the announcement were compiled by Christopher E Mullen, employee of Linc Energy, and Scott J. Wilson of Ryder Scott Company LP each of whom is qualified in accordance with ASX listing rule 5.11 and who has consented to the form and content in which this statement appears. The information in this report, where indicated, relating to coal resources is based on information compiled by Troy Turner, who is a member of the Australian Institute of Mining and Metallurgy and who is employed by Xenith Consulting Pty Ltd. Certain other information is based on information compiled by Tim Jones, a former employee of Linc Energy. Messrs Turner and Jones each has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a competent person as defined in the 2004 Edition of the Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves. Messrs Turner and Jones each consents to the inclusion in the report of the matters based on their information in the form and context in which it appears.

3 CORPORATE SNAPSHOT Linc Energy is an innovative, forward-thinking energy company and the world leader in clean coal technology using Underground Coal Gasification (UCG) ASX 200 publicly listed (ASX:LNC), and in U.S. (OTCQX:LNCGY) Market Capitalization ~ US$755 million (February 23, 2012) Issued Share Capital ~ million shares on issue.

4 OIL & GAS Linc Energy has over 182,000 acres of O&G leases in North America with over 17.5mn barrels of 1P oil reserves and an estimated 1.2 Bn barrels of OOIP proposed to be developed into operations in the short to mid term Production from the USA is expected to cover Linc Energy operational costs from August 2012 Net bbl/day current 150 by end Net bbl/day current 2,400 by end ,600

5 GULF COAST OIL & GAS One of the few medium sized independents in the Gulf Coast which is materially oily (>90%) and entirely operated by the owner In October 2011 Linc Energy acquired 13 producing oil fields consisting of 156 leases covering ~13,400 acres in Texas and Louisiana Proved reserves: 16.5MMboe (94% oil, 25% PDP) PV-10 valuation : $576 million 300mn Reserve Based Lending facility is in place, with 130mn called to date. All in rate currently ~3.1% Net daily production: ~2,400 (Net)bbls/d (94% oil)

6 GULF COAST OIL & GAS (con t) Immediate strategy includes an aggressive drilling plan and well optimization to increase production to 6,900 (Gross) 5,600 (Net)bbls/d Program commenced for completion of 41 new wells and 20 recompletions and workovers before 31 December oil & gas professionals on staff.

7 WYOMING OIL & GAS Presently producing ~190 (Gross) 150bbs/d (Net) with opportunity to expand production to over 10k bbls/d through CO 2 flooding Successful CO 2 injection has resulted in incremental oil production CO 2 interruptible contract has been signed with EXXON. UCG CO 2 and other alternative CO 2 sources are likely to be available from end of 2013

8 CO 2 INFRASTRUCTURE & PROJECT MAP OF WYOMING Devon Beaver Creek: Production 4,200 BOPD Anadarko Salt Creek: Production 12,000 BOPD UCG Assets ExxonMobil Shute Creek: Generates 430 MMCF/D CO 2 Map from State of Wyoming Geological Survey *Not all production is from CO 2 EOR Anadarko Monel Unit: Production 5,000 BOPD Glenrock Oil and Gas Assets Merit Lost Solider/Wertz: Production 7,000 BOPD*

9 ALASKA Umiat: Estimated OOIP of ~1.2bnbbls with Net Probable of 108MMBoe and Possible Reserves of 93MMBoe, as per Ryder Scott report Peak production estimated to be in excess of 50,000bbls/d, with upside through further drilling expected in winter 12/13. Umiat

10 COAL 1. Queensland Coal Resources 2. South Australian Coal Resources 3. Carmichael Royalty In Queensland alone, Linc Energy has 24 million tonnes of measured, 584 million tonnes of indicated, and 743 million tonnes of inferred JORC compliant reserves within 3 of its 7 controlled tenements (breakdown of detail on the next page).

11 COAL ASSETS QUEENSLAND Teresa JORC resource of 852Mt* (Inferred) with mine plan of 310Mt** (25 Indicated and 286 Inferred) for PCI Mining lease application has been submitted and EIS commenced for a 6.4Mtpa underground mine First coal 2015 Pentland JORC resource of 266 Mt.** (176 Indicated and 190 Inferred) Expected to produce c. 3.0 to 4.0Mtpa of export grade thermal coal. Great Northern Leases Exploration planned in late 2012 Biloela The drilling program was completed in late Surat Chinchilla - JORC resource certified of 775Mt.** (24 Measured, 383 Indicated and 368 Inferred) Tipton Drummond Basin Analog to Blair Athol resource targeted, potential coking coal Rathdowney Drilling planned for 2013 * Competent Person Tim Jones, ** Competent Person Troy Turner, Xenith Consulting Pty Ltd

12 TERESA Collinsville Sonoma Abbot Point Eastern Cree Hail North Burton k C Goonyella Coppabella r Goonyella Riverside e Moranbah Carborough e Downs Nort Isaac Plains k h Peak Downs Blair Athol Saraji Lake Vermont Clermont Norwich Park German Creek Middlemount Oaky Creek German Creek East Lake Lindsay Gregory Crinum Kestrel Yarrabee Jellinbah Ensham Curragh East Blackwater Minerva Cook Baralba Rolleston Dalrymple Bay/ Hay Point / Dudgeon Point Dawson Mining Complex Source: Queensland Government Department of Mines and Energy Railway line Railway line (proposed) Port BOWEN BASIN Alma Point / Fitzroy Terminal Gladstone / WICET / 3TL One of the last remaining Coking/PCI Coal of size and quality left in Australia Potential for a 5 to 6.4 Mtpa (product tonne) underground operation for 30 years yielding PCI coal Initial JORC resource statement of 852 Mt Inferred in November 2008 JORC resource statement focussed on Corvus 2 seam only of 310Mt: 25Mt Indicated, 285Mt Inferred, Xenith Consulting Pty Ltd Early production mid-2015, Full production mid-2016 Teresa tenements cover c. 357km2 in the east of the Bowen Basin, 17km north of Emerald Within Queensland s premier coal province (near existing coking coal mines of Kestrel, Crinum, Gregory and Oaky Creek) Good existing infrastructure connections Upside potential in north east of EPC 1226 Mining lease application has been submitted for 9000ha site and EIS commenced.

13 TERESA MINE PLAN Coal seam depth of 130 metres means the preferred method of mining the resource is via underground extraction. Extraction method proposed in the preliminary mine development plan is retreat longwall extraction A coal preparation plant (CHPP) will be constructed on-site. The CHPP will handle around 1,000 tph of coal and produce a PCI product with a yield of approximately 80% Reclaimed coal will be transferred to a load out bin located over the mine rail balloon loop. Approximately 15 train loads of coal will be shipped per week. The Project will be capable of exporting 6.4Mtpa of product coal Final rail corridors and port options are currently under investigation. The final corridor alignment will be located based on engineering and environmental constraints.

14 COAL ASSETS SOUTH AUSTRALIA Walloway Basin Thick brown coal formations have been confirmed and a project technical review is currently underway for the Walloway Basin assets Exploration target identified Over 1,000 metres of drilling in the region, including 63 metres of 85mm core (PQ) was completed in 2010/11. Arckaringa Basin East Wintinna and Weedina Exploration target identified.

15 CARMICHAEL MINE Adani Royalty Linc Energy sold the Carmichael Coal asset to Adani for A$500mn cash and A$2/tonne royalty (plus CPI) for 20 years of production Carmichael Coal tenement (formerly known as Galilee) is being developed by Adani Enterprises as an 60Mtpa mine with production expected to commence in 2015 The tenement is located in Queensland s Galilee Basin, 160 kilometres northwest of Clermont and had a JORC resource of 7.8 billion tonnes at the time of divestment.

16 CLEAN ENERGY Only company in the world to have successfully demonstrated the conversion of underground low-value coal to liquids via the (UCG/GTL) process Linc Energy has patents across the technology Our technology, operating experience and proof of delivery empowers us to beneficiate $1/t coal to $100/t ultra clean fuel for ~30 per barrel (19 cents per litre) The UCG-GTL visual and environmental footprint is minimal 50 years experience at Yerostigaz, Uzbekistan UCG operator for over 12 years experience of UCG to synthetic fuel at Chinchilla operations, Australia; with 5 generations of technology development Targeting a roll-out of first UCG GTL commercial site selection and pre- FEED studies in 2012 The G5 design and operation reflects the readiness of Linc Energy processes for commercialisation Linc Energy resources in UCG include large targets in Alaska (Cook Inlet), WYO (new large PRB opportunity for CO2 oil and gas tertiary recovery and power), Poland, South Africa and sourcing resources in Asia.

17 CHINCHILLA DEMONSTRATION FACILITY

18 POWDER RIVER BASIN Linc Energy has 173,327 acres of coal leases across the states of Wyoming, Montana and North Dakota Site selection and drilling is underway Linc Energy has offices in Casper, Wyoming and Denver, Colorado.

19 CLEAN ENERGY UCG >1000 feet <60 feet UCG converts low value coal into syngas via the coal deposit being heated creating a chemical reaction called gasification (not combustion) Horizontally & vertically drilled wells become the injection and production wells The Syngas is suitable for production of transportation fuels (GTL), fertiliser (chemical) and as a feedstock for power generation Linc Energy UCG process can be conducted in a safe environment as demonstrated by Yerostigaz (50yrs of operations, owned by Linc Energy) and Chinchilla (12 years operations with over 30k water samples over 1 km 2 ).

20 UCG PROGRESS Gasifier (Generator) 5 operations at Chinchilla is commercial and has been operating since September 2011 Gasifier 4 uses world-first Linc Energy developed UCG technology, with syngas produced in 5 hours Horizontal well technology Adoption of oil and gas technology for reliability and repeatability Increased resource recovery and gasifier life Oxygen enrichment Increased capital efficiency Soviet-style UCG technology used for Gasifier 1, 2 and 3 at the Chinchilla Demonstration Facility

21 SUMMARY Linc Energy comprises three (3) energy divisions; Oil and Gas, Coal and Clean Energy (UCG/GTL) that are all moving to profitability by the end of Oil and Gas a. To increase production in the U.S. to 6-7,000 bpd b. WYO commercial CO 2 injection to commence for 2012, which will have a long term production of +10k bpd c. Drilling of ~1.2 Billion barrels OOIP in Alaska over the Northern Winter to create a significant 1P barrel reserve and enable financing of the pipeline. 2. Coal a. Monetise Teresa b. JV for coal package and divest or float c. Drill out key coal targets in Qld, South Australia and the Powder River Basin. 3. Clean Energy a. Now with UCG Gasifier 5 developed; goal of committing to first UCG to GTL project site by end of 2012 b. Finalise GTL costing and commence GTL project c. Convert more commercial opportunities

22 Thank you