Linc Energy confirms shale oil potential in the Arckaringa Basin

Wednesday, January 23, 2013
  • Independent prospective resource reports completed by both DeGolyer and MacNaughton (D&M) and Gustavson Associates (Gustavson) confirm the significant potential of shale oil in the Arckaringa Basin.
  • Unrisked prospective resources for unconventional reservoirs in the Arckaringa Basin have been estimated by Gustavson to be 233 billion barrels of oil equivalent (BOE).

Linc Energy (ASX: LNC) (OTCQX:LNCGY) announce that two separately commissioned and independent reports from DeGolyer and MacNaughton (D&M) and Gustavson have confirmed the significant resource potential of the three formations of the Arckaringa Basin (the Stuart Range, Boorthanna and Pre-Permian). The unrisked prospective resources for unconventional reservoirs in the Arckaringa Basin have been estimated by Gustavson to be 233 billion barrels of oil equivalent (233 BBOE) and by D&M to be 103 billion barrels oil equivalent (103 BBOE).

Analysis presented in these reports indicates that the Stuart Range formation and the underlying Boorthanna and Pre-Permian formations are rich in oil and gas prone kerogen that may form the basis of a new liquids-rich shale play.

The conclusions presented by D&M and Gustavson are consistent with Linc Energy's view that formations within the Arckaringa Basin have excellent resource play potential with total organic carbon (TOC) levels, permeability, porosity and thickness that compare favourably to prolific US unconventional liquids plays such as the Bakken and Eagle Ford.

The independent experts deal with the unconventional resources of the three formations within the Arckaringa Basin in different ways. Gustavson considered the data gathered to date and assigned the prospective resources in all three formations to the 'oil generation window' of thermal maturity but acknowledged the potential for gas in the deeper parts of the basin. D&M assigned gas-liquids ratios to the various depth intervals in each formation resulting in estimation
of prospective resources of oil in the shallower depths and gas in the greater depths. D&M was also commissioned to provide a risked estimate of prospective resources by applying a probability of geologic success.

Gustavson also identified the potential for conventional hydrocarbon resources while working with the data presented. The Gustavson report includes prospective resource estimates for a portion of the deeper parts of the Arckaringa basin. These estimates provide strong encouragement that the balance of the basin may also be prospective for conventional hydrocarbon deposits and suggests that additional work on conventional resource potential is justified.

DeGolyer and MacNaughton (D&M) is one of the most respected names in the upstream segment of the oil and gas consulting industry, providing reserves consulting services, resources evaluations, field studies, reservoir simulation studies, and many other services for energy companies worldwide. The firm employs more than 100 professional petroleum engineers, geologists, petrophysicists, statisticians and energy economists.

Gustavson Associates, LLC (Gustavson) is a global consulting firm consisting of geologists, geophysicists, and petroleum engineers, as well as economists and financial experts dedicated to the business of problem solving in all aspects of natural resource evaluations. Gustavson's work ranges from the first steps of prospecting to design and assessment of production facilities. The company has a 30+ year track record of quality consulting to industry and governments worldwide and utilizes the latest technology to analyse large volumes of data.

Linc Energy Petroleum licences cover the majority of the Arckaringa Basin, amounting to more than 16 million contiguous acres throughout the basin.

Linc Energy has appointed Barclays Bank to advise on strategic options, including the introduction of an experienced shale operator to joint venture the development of this emerging world-class shale play.

Peter Bond, Managing Director and CEO, said, 'Linc Energy is committed to delivering the best outcome for the development of this acreage and maximising value to shareholders. The best way for Linc Energy to do that is to bring in an industry expert with the know-how and funding to drive this asset forward to production as promptly and as efficiently as possible.'

Full report here.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser. More

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