Linc remains ‘confident’ in Umiat

Linc Energy Ltd. is “extremely confident” in the Umiat field.

Despite the recent decline in oil prices, the Australian independent said it remains optimistic about its prospects for developing the remote oil field in the foothills of the Brooks Range Mountains, according to a company update released April 21.

In mid-2014, the company launched a strategic review after receiving an unsolicited offer for its American operations, including Umiat and operations in Wyoming. The company intended to make a decision by the end of last year. “Linc Energy remains in discussions with a number of interested parties with respect to the sale of its Umiat and Wyoming oil assets. Progress has been slower than previously anticipated as a result of the recent oil and gas market downturn,” the company said in its statement. “However, the Company remains extremely confident in the long-term value of both the Umiat (particularly in light of the pre-appraisal Project Cost Estimate undertaken by NANA Worley Parsons earlier this year) and Wyoming oil assets and will continue to engage with interested parties whilst prudently progressing permitting and development plans for the fields.”

After completing an exploration program at Umiat in early 2014, Linc said it saw a “clear path” to development. The field is price-sensitive, though, because of its remote location and its complex geology, which includes a reservoir partially buried in permafrost.

To adjust to the current oil price environment over the past six months, Linc said it has taken an “increased focus” on divesting non-core assets, optimizing organizational structures and reducing its “total cost per barrel of oil produced” in America below $29.

Linc is also pursuing an Alaska underground coal gasification program, which would convert deep coal deposits into gas, and said “good progress is being made on synthetic natural gas off take opportunities to existing and new participants in the Cook Inlet.”

- Eric Lidji