Administrators recommend Linc liquidation

Outside administrators have recommended that Linc Energy Ltd. liquidate its assets.

In a May 13 report, administrators Stephen Longley, Grant Sparks and Martin Ford of Australian advisory firm PPB Advisory concluded that placing the independent exploration and production company into liquidation is currently “the only option available to creditors.” Creditors will consider the recommendation at a May 23 meeting.

Linc Energy entered “voluntary administration” on April 15. The provision of Australian securities law allows a company to temporarily hand over control to outside entities.

In their report, the three administrators blamed the recent financial difficulties of the company on “the rapid deterioration of global commodity prices,” on an inability to raise money after the government of Queensland accused the company of “environmental damage” relating to an underground coal gasification project, and on “the unwillingness of major shareholders” to participate in a proposed restructuring of the company.

As the administrators reviewed company history and worked with creditors, they also marketed company assets for sale and reduced company operations around the world.

Among its global properties, Linc Energy owns the Umiat oil field in the foothills of the Brooks Range, along the National Petroleum Reserve-Alaska boundary. Umiat is among the largest undeveloped oil fields in Alaska, stalled by its complicated geology and remote location. The company completed an exploration program in recent years and has been in the early stages of permitting a development program at the field.

Any liquidation might impact U.S. operations differently because assets in Alaska, Louisiana, Texas and Wyoming operate under different subsidiaries. But, according to the report, “the US subsidiaries are currently considering restructuring options.”

- ERIC LIDJI