Linc Energy Limited (ASX:LNC) Acquires Oil Field In Alaska

Brisbane, June 16, 2011 AEST (ABN Newswire) - Linc Energy Limited (ASX:LNC) (PINK:LNCGY) is pleased to announce that its wholly-owned subsidiary, Linc Energy (Alaska) Inc., has acquired a controlling interest in the Umiat oil field, which is located in the National Petroleum Reserve, Alaska (NPRA), approximately 140 miles southwest of Prudhoe Bay and approximately 80 miles west of the Trans-Alaska Pipeline System (TAPS).

Linc Energy has acquired its controlling interest via the acquisition of 100% of Renaissance Alaska LLC, which holds an 84.5% interest in Renaissance Umiat LLC. Renaissance Umiat LLC holds a 100% working interest in the Umiat oil field and an 80% net revenue interest in the project. The purchase price of the acquisition is US$50 million plus adjustments for working capital, deposits and inventory.

The 80% net revenue interest in the acquired leases is currently attributed Net Probable & Possible Reserves (3P) of 201 million barrels of oil equivalent (201 MMBOE), with the current estimated Original Oil in Place (OOIP) within the acquired Umiat lease area of one billion barrels (1,000 MMBO).

Linc Energy will fund the acquisition from the Company's cash reserves. Following acquisition, additional exploration and completion of feasibility and engineering studies, it is anticipated that the majority of the capital expenditure for construction of the oil field and pipeline infrastructure will be debt funded.

Umiat Oil Field

The Umiat oil field consists of 19,358 gross acres over three leases (two managed by the United States Department of Interior, Bureau of Land Management (BLM), and one by the State of Alaska) located in the western foothills/foldbelt province of the North Slope Foothills of Alaska.

In December 2009 the State of Alaska announced plans to build an all-season gravel road from the Dalton Highway (adjacent to the TAPS pipeline) to the Umiat area. Subject to the determination of the final route, the road is anticipated to be approximately 92 miles (148km) long. It is estimated that construction could commence within the next 12 to 24 months and take approximately 18 months to complete. The U.S. Army Corps of Engineers and the State of Alaska have started work on the federal environmental impact statement for the road. The public commitment by the State of Alaska to develop this infrastructure was a SIGNIFICANT factor in the decision by Linc Energy to pursue this Alaskan development opportunity.

It is anticipated that, working closely with the State, Linc Energy will permit and develop the pipeline infrastructure between the Umiat oil field and TAPS in parallel with the Umiat road development, with the pipeline to be trenched into the road.

The completion of this pipeline will mark the first significant all-season oil transport infrastructure into the southern part of the NPRA, opening up the area for further significant development.

Previous independent studies by NANA WorleyParsons LLC commissioned by Renaissance Umiat LLC, confirmed the viability of a cold pipeline buried in the road, with a preliminary construction estimate of US$207m (including a 25% contingency) and a construction period of one season (4-5 months). Linc Energy will complete further detailed feasibility and engineering studies on the pipeline development before finally committing to the pipeline project.

During the Umiat road and pipeline development period, Linc Energy intends to undertake further exploration, resource delineation and development of the Umiat field. The final capital budget allocation for this work will be determined immediately following the completion of the acquisition; however Linc Energy's Alaskan team has already commenced a detailed evaluation and review of existing plans and costings as part of Linc Energy's due diligence upon the asset.

Subject to permitting, Linc Energy aims to fly a drill rig into the Umiat 5583' (1.7 km) airstrip as soon as practically possible to commence further drilling of the area. In addition, Linc Energy plans to commence shooting additional 2D and 3D wireless seismic upon the Umiat leases as soon as practicable and before this Alaskan Winter.

Peter Bond, Chief Executive Officer of Linc Energy, said, "Linc Energy's decision to invest in Alaska and pursue a significant conventional oil and gas exploration and development program was greatly assisted by the availability of a number of generous State of Alaska incentives. These incentives provide a natural opportunity to create a "win win" situation for the State of Alaska, local communities and companies like Linc Energy, who are keen to invest in new resource projects in the region."

"I am very proud of the team we are building in Alaska and very excited about our current land position and the many opportunities we can see for expanding our operations in the State. We are thrilled to have the opportunity to effectively team up with the State of Alaska and the local community to pursue our mutual objectives of identifying additional oil resources and developing infrastructure so that production can be brought on-line quickly and in an environmentally responsible manner."

"Linc Energy is extremely well positioned, with access to the necessary capital and resources, to take this project into production on an aggressive timetable. The Umiat asset is the "book-end" oil project we are planning to develop and bring on-line over the next 4 years. I believe that this project has great potential and should contribute significantly towards Linc Energy reaching its 100,000 barrel per day production goal over the coming years."

"The assets we are developing in the lower 48 states of the USA and in South Australia will be the foundation oil production assets for the Company, and are key to Linc Energy's plans to produce early and strong profits that take the Company to a new level. But Umiat is a cornerstone asset with the potential to create large volume, very profitable on-shore oil production that can grow a company very quickly."

"This acquisition marks another significant step in our USA business strategy and evidences our long-term commitment to our Alaskan operations as one of the centrepieces of the Company. Using Umiat as a northern base of operations, we intend to increase our oil, natural gas and coal exploration and development activities across the North Slope Foothills. I sincerely believe that the potential in this area for all of Linc Energy's Oil & Gas, Coal & Clean Coal and Clean Fuel operations is simply staggering and virtually impossible to replicate in any other part of the world," Mr Bond said.

Completion of the transaction is scheduled for 6 July 2011. To support the development of the Umiat project and future expansion plans in Alaska, Linc Energy will be significantly expanding its current Alaskan-based workforce over the coming months.

Contact

Information for Media: Greg Meyer Media Manager Phone: +61-7-3229-0800 E-mail: greg.meyer@lincenergy.com.au ASX Contact: Brook Burke Company Secretary Phone: +61-7-3229-0800 E-mail: brook.burke@lincenergy.com.au Information for Investors: Justyn Peters General Manager Investor Relations Ph: +61-7-3229-0800 Email: justyn.peters@lincenergy.com.au http://www.lincenergy.com.au