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AUD/USD+0.01.0674at 16:55Stock QuotesSearch ASX code or name .Linc Energy in trading halt as $300m oil deal looks sealed Andrew Fraser From: The Australian June 04, 2011 12:00AM Increase Text SizeDecrease Text SizePrintEmail Share
Add to DiggAdd to del.icio.usAdd to FacebookAdd to KwoffAdd to MyspaceAdd to NewsvineWhat are these?LINC Energy is poised to acquire several oilfields in the US after the company went into a trading halt yesterday ahead of the deal.
Managing director Peter Bond is known to be in the US, and the company has made no secret of its ambition to utilise its underground coal gasification technology in other areas of mining.

Linc is looking at paying about $300 million for three oil projects in the US that are close to the company's existing coal holdings, on which it is using its underground coal gasification technology to produce synthetic gas.

Dr Bond has previously told The Australian that he sees considerable synergies in utilising the gas produced from UCG in oil mining, especially in oil wells that have already been drilled.

In many of these wells, conventional techniques have only taken out about half the oil available, and Linc's plan is to pump carbon dioxide from the syngas produced from UCG down the wells as part of what is known as enhanced oil recovery.

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The wells that the company is trying to acquire include some distressed wells as well as some conventional wells that are already producing oil.

Dr Bond is believed to be close to finalising the deal, which should be completed over the weekend.

The past few weeks have been busy ones for Linc Energy. Dr Bond drove a car powered by diesel from the company's UCG deposits near Chinchilla in western Queensland across the country to Perth to prove the fuel actually works, and the company is also on the verge of selling its Teresa coal deposits in central Queensland.

The company is believed to have been offered $500m for the Teresa coal deposits, one of three coal holdings the company has but is selling.

Last year Linc sold a coal deposit in the Galilee Basin to Indian company Adani for $500m. Adani have since become a bigger player in the Queensland mining scene, paying $1.8 billion for the coal port of Abbot Point in north Queensland.

Shares in Linc have been trading between $2.50 and about $3 for much of the year. After news about the possible sale of Teresa leaked, they rose to $3.08, but were trading at $3.05 before the trading halt yesterday.