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Bandy,

The CO2 that Linc will be producing comes from the UCG, not the GTL.

The way I see things panning out is as follows,
The LOE + tax + capital cost per barrel ($34m /6000bopd)
= approx $50/b, sale price = approx $100 /b, therefore revenue = $50/b for the Tx & La operation, so by the end of the year they should be receiving revenue at the of approx $120mil per year from TX & La fields.

Now Wyoming, the Huff & Puff has shown good results and they have arranged supply of CO2 from Exxon to start the CO2 EOR. This will not be a Huff & Puff but a CO2 flood which will give longer term results.

Ideally they would be using their own CO2 from the 3 planned gassifiers, but first they have to get permits for the G6 pilot gassifier, and bring it on line for 90 days and then decommission it before they can apply for a permit for these three wells. So to me they wont be on line until next year. So the Exxon CO2 will increased oil flows in the short term, and once the commercial gassifiers come on line, costs will be lowered and flow rates can be further increased.

Once the EOR has proven results, then the 1P and 2P reserves will be able to be booked, increasing asset backing. I believe at this stage the US oil production would be able to cover cash out flows for the company.

Now we know what the CO2 will be used for, but what the Syngas will be used for is another issue. The GTL may or maybe not be ready for roll out, but surely the syngas could be put through a gas turbine for electricity in the short term.

PB keeps talking of a 5000 bpd GTL plan, but the new Velocys modular GTL they are buying, comes in 25 bpd units. Up to 40 of these units can be placed in each chamber, and the normal plant will have several chambers running in parallel which allows flexibility of operation. Therefore that plant can potentially start small and grow as capital become available and gassifiers come on line.

Yes they need to sell a coal lease to expand at their desired rate of growth, but if they don't then seeing off the the next 18 months maybe a challenge, but they should be covered from there on.