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Wildhorse Energy to bag $4M in Linc Energy shares, divests UCG asset in Hungary
Tuesday, February 25, 2014 by Proactive Investors

Wildhorse Energy is to divest Hungarian UCG assets for $4 million in Linc Energy shares.

Wildhorse Energy (ASX: WHE) should trade higher today after signing a Heads of Agreement Linc Energy (SGX: T16), whereby Linc will acquire a 100% interest in WHE’s underground coal gasification (UCG) assets in Hungary for $4.04 million worth of Linc shares.

The transaction will ensure the advancement of the UCG assets, and the participation of WHE shareholders in their upside development potential via the Linc Energy stock issued as consideration.

WHE retains its interest in the Mecsek Hills Uranium Project in Hungary, which has a current JORC Inferred Resource of 48.3 million tonnes at 0.072% uranium for 77 million pounds.

Linc Energy is regarded as the global leader in UCG having invested over $200 million proving up its proprietary UCG technology, which is now ready for commercialisation.

Linc's operational team has direct experience in the development and operation of UCG projects, including Yerostigaz in Uzbekistan, where UCG gas has been produced for 50 years.

The proposed transaction will provide the Mecsek Hills UCG Project with a qualified development partner to advance and crystallise the value of the asset for WHE and Linc investors.

Above and beyond its UCG credentials, Linc has a significant portfolio of conventional oil, gas and coal projects; thus also providing WHE shareholders with exposure to development upside of these energy assets.

The agreement remains conditional upon regulatory and shareholder approvals, and the execution of formal Sale and Purchase agreements within 4 months.

Further, the parties have entered into a funding agreement whereby Linc is to provide funding up to $400,000 for the costs associated with the WHE holding the UCG tenements for up to four months prior to completion of the sale transaction.

WHE is capped at around $12 million.