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Providing coverage of Alaska and northern Canada's oil and gas industry
February 2011

Vol. 16, No. 6 Week of February 06, 2011

Linc gets UCG exploration license

Alaska Mental Health Trust Land Office issues seven-year license over 181,414 acres; can later be converted to traditional leases

Eric Lidji

For Petroleum News

The Alaska Mental Health Trust Land Office has issued Linc Energy an underground coal gasification exploration license over 181,414 acres of Southcentral and Interior Alaska.

The license is broken into three general areas, one on the east side of Cook Inlet near Nikiski, another on the west side of Cook Inlet near the Beluga Power Plant and a third in the Interior region of the state around Anderson, Healy and Nenana. The license covers almost all of the 190,000 acres the Mental Health Trust offered in June 2010.

Linc Energy is an Australian independent focused on underground coal gasification, a process for generating synthesis gas from deep coal deposits, as well as traditional oil and natural gas exploration. The company completed its first Alaska well in November.

That well targeted a conventional natural gas reservoir and encountered “a number of gas bearing horizons” and “a number of significant coal seams,” the company said. Linc also hopes to soon drill at its acreage at Trading Bay, on the west side of the Cook Inlet basin.

However, that work represented only “stage one” of Linc’s plans for Alaska, a way to generate revenue and experience that can be used toward underground coal gasification.

“The gaining of this acreage marks Linc Energy’s entry into stage two of its Alaska plan. In conjunction with our continuing oil and gas program, coal exploration for UCG will be conducted aggressively over the next 24 months,” CEO Peter Bond said in a statement.

20 billion tons ‘known’

Linc arrived in Alaska in March 2010, acquiring 123,000 acres near Point MacKenzie and Trading Bay from San Francisco-based independent GeoPetro Resources.

Prior to picking up the Mental Health Trust license, Linc estimated that its Alaska leases overlaid some 20 billion tons of “known” coal deposits. The company did not offer an estimate for the license area, other than to describe its coal potential as “extraordinary.”

“Alaska is shaping up to be one of the key territories for Linc Energy to launch its global energy operations,” Bond said. “It is a progressive jurisdiction and has significant infrastructure as an important energy hub.”

Land managers use exploration licenses to generate activity in underexplored areas or for underdeveloped resources. Through a license, a company pays for the right to explore a broad area. If that work yields promising finds, the company can form traditional leases.

In its June offering, the Mental Health Trust proposed a seven-year license at $1 per acre. If the licensing leads to leasing, the Trust proposed to offer the land for an initial five-year term at $4 per acre per year that could be extended by five more years by production.






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