Linc Energy Limited (ASX:LNC) Submits Permit for Wyoming Underground Coal Gasification Demonstration Facility

Brisbane, Oct 28, 2011 AEST (ABN Newswire) - Linc Energy Limited (ASX:LNC) is pleased to announce that it has submitted a permit application and commenced the approval process with the Wyoming Department of Environmental Quality (WDEQ) to build and operate a Underground Coal Gasification (UCG) demonstration plant in one of the richest coal resource sites in the world - Wyoming's Powder River Basin (PRB).

Linc Energy Chief Executive Officer, Peter Bond, said that the plant will allow the Australian company to prove to US stakeholders, investors and potential commercial partners, the viability of the UCG technology in the USA.

"What makes this so exciting is the opportunity to introduce the enormous potential of UCG to an American audience, and prove that it can be done in an environmentally sound and sustainable manner in the backyard of the largest energy market on the planet. This is not just important for our USA customer base, but the success of Gasifier 6 in Wyoming will have a multiplier effect across whole regions and countries that will see this as just one more reason to adopt UCG into their energy platform."

The permit application is based upon more than 16 months of continuous work and collection of baseline data. As part of the permitting requirements and site feasibility, Linc Energy has conducted drilling and coring operations, hydrogeological studies with baseline groundwater sampling and wildlife and vegetation surveys on the UCG demonstration site located near Wright, Wyoming. The application includes detailed hydrogeology models, UCG cavity growth models and subsidence control models prepared using Linc Energy's proprietary UCG technology.

Linc Energy is a significant holder of State owned coal leases in the PRB, controlling approximately 184,210 acres (287 sq. miles or 745 sq. km) of coal within the Wyoming PRB. In addition to Linc Energy's original GasTech lease acquisitions in 2009 and 2010, the Company has acquired an additional 17,280 acres of coal leases from the State of Wyoming in 2011. This additional acreage is near Linc Energy's latest oil field acquisition, advancing the Company's business strategy of converting the gasified coal to saleable Gas to Liquids (GTL) products, exportable power and utilising the CO2 produced in Enhanced Oil Recovery (EOR) projects.

Linc Energy's geologists are in the process of quantifying the size of the coal deposit within the Company's expanding PRB leasehold. In drilling an exploratory well in the PRB it is not uncommon for Linc Energy to discover seven different coal seams present.

On the "Buff Logical Mining Unit" where the demonstration project will commence, Linc Energy has identified the following:

- 15ft (4.6 m) coal seam at 150ft (46m),
- 10ft (3m) coal seam at 600ft (182m),
- 50ft (15m) "Big George" coal seam at 900ft (274m),
- 30ft (9m) "Wyodak" coal seam at 1100ft (335m),
- 20ft (6.1m) coal seam at 1500ft (457m),
- 20ft (6.1m) coal seam at 2000ft (610m), and
- 20ft (6.1m) coal seam at 2100ft (640m).

Linc Energy is targeting the "Wyodak" seam for this particular UCG trial; though the potential to extract vast amounts of energy from this region across several seams is significant and quite common.

In addition to the coal resources, the existing infrastructure and resources in the PRB, such as rail lines, power lines, pipelines, roads, coal and gas fired power stations, gas facilities, refineries and waterways add to the economic benefits and feasibility of a commercial UCG project in the area.

Following the submission of the UCG permit application, the WDEQ will perform a completeness review and then open a public comment period. This process is anticipated to take approximately 180 days. To assist with the permit review the WDEQ has contracted an expert third party firm who will work in conjunction with the WDEQ to review and comment on Linc Energy's permit application.

Once the permit is issued construction for the surface facilities will commence.

The development time for Gasifier 6 will be minimised, as much of the pre-approval preparatory work is already completed. To date, more than 20 monitoring wells have been drilled into the Wyodak coal seam, overburden and underburden and many of the surface facilities will be skid mounted and built prior to permit approval; thus only the flanging up of surface equipment will be required. The Company is also taking steps to erect a site office and, at the request of the WDEQ, plans are in place to drill up to 18 trend wells by the end of the year, forming an ellipse around the proposed gasifier about 200 feet away from the gasifier centreline.

"Linc Energy anticipates igniting the gasifier to complete the 90 day gasification demonstration at the Wyoming UCG Demonstration Site in the second quarter of 2012," Mr Bond said.

"After demonstrating to the WDEQ that Linc Energy has met the conditions outlined in the permit, the Company intends to develop commercial UCG operations in the PRB."

Through the current Wyoming exploratory program, several viable commercial sites have been identified to combine UCG and EOR opportunities at existing oil fields. One of these initial opportunities currently being assessed is the "Buffalo Logical Mining Unit" (Buffalo LMU) near Buffalo, Wyoming. At approximately five square miles, the Buffalo LMU is one of Linc Energy's largest contiguous blocks of acreage with good coal measures. The first exploratory well within the Buffalo LMU exhibited about 60 feet of shale above a 40 foot coal seam at 1200 feet deep, as well as 30 feet of shale below the coal, offering a very attractive site for potential commercialisation.

"While our focus continues to be to complete the permit and demonstration process, we continue to conduct exploration drilling to identify commercial sites amenable to UCG within the PRB leasehold. We have drilled six exploration holes already this year, and plan to drill an additional 20 by the end of 2011. This critical work is aimed at identifying multiple potential commercial UCG sites. In short, Linc Energy is now defining and developing its options that will drive a potential UCG program in the USA. When you combine Wyoming with Linc Energy's recent success of its latest Gasifier 5 UCG Technology, you really get a sense that the planets are aligning for Linc Energy's UCG commercial future," said Mr Bond.

Contact

Linc Energy Limited Tel: +61-7-3229-0800 http://www.lincenergy.com