us broker predicts huge future for linc energy

PRESS RELEASE – FOR IMMEDIATE RELEASE
Research Coverage Initiation: Linc Energy, Ltd. (LNCGY, US$6.72)
SAN FRANCISCO – January 9, 2008 – Merriman Curhan Ford & Co., an investment bank and securities
broker-dealer, and subsidiary of MCF Corporation (AMEX: MEM, Member: FINRA/SIPC), initiated coverage of
Linc Energy, Ltd. (LNCGY) at Buy.
Equity research analyst Jesse T. Herrick highlighted these themes in the research report issued today:
• Linc Energy is a development stage company deploying proprietary, low-cost Underground
Coal Gasification (UCG) and Gas To Liquids (GTL) technology to produce ultra-clean diesel
fuel. Linc is currently constructing a 10 barrel-per-day (bpd) facility at its coal reserve site in
Chinchilla, Australia, with a 20,000 bpd facility in the engineering stages. We believe Linc is wellpositioned
to become a large producer of ultra-clean, high quality diesel fuel, at extremely high
margins. We are initiating coverage with a Buy rating.
• Combining UCG and GTL. Linc Energy combines Underground Coal Gasification (UCG), the
process of producing syngas underground at the site of a coal reserve, and Gas To Liquids (GTL)
technology, the refining of syngas into liquid diesel vis-à-vis the Fischer-Tropsch process. The
combination of these technologies provides for a much more cost-effective approach to processing
coal into liquid fuels. With Linc’s coal ownership and current market trends for oil pricing, we
believe margins should prove to be extremely high.
• Demonstration to commercial scale. Linc Energy plans to use the UCG and GTL processes in a
demonstration project in Chinchilla, Queensland, targeted to produce 10 barrels of diesel fuel per
day (bpd) and build out a 20,000 bpd facility over the next few years. The demonstration plant
should be commissioned and operational beginning in C1Q08, with a planned commissioning of the
commercial unit expected during 2010.
• Estimates and valuation. Assuming a discount rate of 14-16% and an exit multiple of 6.0-7.0x (oil
and gas comps) once the plant reaches a full production run-rate (2015), we arrive at an NPV of
A$1.1-1.5B or A$2.0-2.6 per share. This would translate to a present value of the ADR at US$17-
23 per share from its current US$6.72 value. Alternately applying a 10.8x P/E multiple into 2015
EPS of A$0.51 gives us a 2014 stock price just shy of US$50.
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IMPORTANT DISCLOSURES ON LAST PAGE
Members of the media can obtain a copy of this Merriman Curhan Ford & Co. research report by e-mailing
Michael Mandelbaum at [email protected]
For More Information Contact:
Jesse T. Herrick
Vice President
415-568-3924
[email protected]
Michael Mandelbaum
Mandelbaum & Morgan
310-785-0810
[email protected]