Australia-based Linc Energy Limited has signed a purchase agreement to acquire a 100% interest in 92,059 acres of coal tenement lease areas in the Powder River Basin in Wyoming USA from GasTech Inc, a company based in Casper Wyoming. Immediately after settlement, Linc Energy will commence the permit and approval process required in order to undertake an underground coal gasification (UCG) pilot program to produce syngas, which it has committed to completing within 24 months of the acquisition.
Linc Energy will establish an office in Wyoming to ensure completion of an underground coal gasification (UCG) pilot program and to support its planned commercialization of UCG to Gas to Liquid (GTL) in the USA.
The 92,059 acres being acquired have a coal deposit exploration target range of 7 to 8 billion metric tonnes (non-JORC Code standard) based on existing drilling data.
The Powder River Basin is the largest coal producing region in the United States with current production from surface mines representing over 45% of the total US production. The area being acquired by Linc Energy contains multiple subbituminous coal seams ranging from 6 to 15 metres thick and occurring at depths in excess of 150 metres, making them excellent targets for Underground Coal Gasification (UCG) operations.
Linc Energy has agreed to pay US$5 million for the purchase of the GasTech coal tenements. This agreement follows the Letter of Intent between Linc Energy and GasTech which was announced on 3 December 2008 and completes the first phase of the proposed GasTech purchase, with the remaining area subject to a further transaction pending resolution of pre-emptive rights held by a major petroleum company.
The completion of the purchase of these coal areas from GasTech is an important step forward in Linc Energy’s international expansion program. Linc will now have access to several billion tonnes of coal in the state of Wyoming, one of America’s key energy producing areas, which will allow the Company to move quickly to commercialization of UCG to produce GTL fuels like ultra clean diesel and Jet A1.—Peter Bond, Linc Energy’s Chief Executive Officer
In October 2008, Linc Energy successfully produced the first hydrocarbon liquids from its Chinchilla demonstration facility which introduces underground coal gasification (UCG) synthesis gas into a Fischer-Tropsch reactor that produces high quality synthetic fuel. (Earlier post.)