Linc Energy Ltd (LNC) is pleased to announce that its wholly owned subsidiary, Linc Energy Petroleum (Wyoming) Inc., has acquired three producing oil fields (approximately 27,856 acres) from Rancher Energy Corp., securing immediate oil production and a significant CO2 enhanced oil recovery (EOR) opportunity. The three oil fields have been acquired from Rancher Energy Corp., a Nevada corporation currently in Chapter 11 bankruptcy, for a total consideration of US$20 million. The fields, located 15 miles east of Casper, Wyoming, have combined production of 146.6 million barrels of oil to date from an estimated Original Oil in Place (OOIP) of 466.6 million barrels of oil.
The purchase price of the assets is US$20 million (less adjustments). The assets purchased consist primarily of oil & gas leases, property interests (including all overriding royalty interests held by Rancher Energy) and wells upon the Big Muddy, South Glenrock and South Cole Creek oil fields located in Converse County and Natrone County, Wyoming. The total area of these leases is approximately 27,856 acres. Linc Energy holds significant coal leases in the Powder River Basin and is currently permitting its first underground coal gasification (UCG) operation in that region, with the first gasification operations expected to commence later this year (2011). The acquisition of the Rancher Energy oil fields is the first strategic acquisition by the Linc Energy of producing North American petroleum assets which deliver immediate revenue whilst also providing an entry point into the established EOR market utilizing the valuable CO2 stream produced from UCG operations and other CO2 sources.
Peter Bond, CEO of Linc Energy, said, “We recognized some time ago that significant value could be delivered to our shareholders if we combined UCG operations with Enhanced Oil Recovery from depleted oil fields using CO2 flooding. We have been diligently working on assessing UCG and EOR opportunities in the USA for over 12 months and announced our intentions to enter this market at the end of 2010. The Rancher Energy deal represents the first step in this process and is a milestone for our expanding North American oil operations.”
Linc Energy is an innovative, forward-thinking company developing a significant energy business based on the production of cleaner energy solutions. Linc Energy has successfully combined two known technologies, Underground Coal Gasification (UCG) and Gas to Liquids (GTL) and has demonstrated its vision of being a leading supplier of a new source of cleaner liquid transport fuels for the future. Linc Energy represents a new future for liquid fuels production and high efficiency energy generation.