Linc Energy announces A$77.5M deal to acquire American coal company GasTech December 3, 2008

Australian clean coal technology leader Linc Energy Ltd (ASX: LNC) has signed a Letter of Intent to acquire North-American energy company Gas Tech Inc (GasTech) for US$50 million (A$77.5 million).

GasTech has up to 19 billion tonnes of coal in the Powder River Basin of Wyoming, USA.

Under the terms of the Letter of Intent agreement, Linc Energy will purchase 100% of GasTech’s shareholding for $US50 million. It will pay for the transaction via the issue of Linc Energy ASX scrip at a price of $A4.03 per share (approximately 60% premium to Linc Energy’s current share price).

The GasTech coal areas cover approximately 172,000 acres of the Powder River Basin and have been exceptionally well explored, with more than a 1,000 drill holes. Linc Energy will only need to complete a modest drilling program to prove up and test a number of key potential Underground Coal Gasification (UCG) sites.

It is Linc Energy’s intention to proceed with a UCG pilot plant in Wyoming within the coming twelve months, with the aim of breaking ground on the project in the fourth quarter of 2009.

Peter Bond, Linc Energy’s Chief Executive Officer said “Linc Energy sees the Powder River Basin coal that it will gain from the GasTech acquisition as an exceptional opportunity for the Company to take its first step towards delivering on its strategic goal of the development of production facilities in the USA.”

Linc Energy has already completed initial due diligence on the GasTech acquisition and settlement is expected to be completed in January 2009.

Click here to read the full announcement.

For further information, please contact:

Mr Peter Bond
Chief Executive Officer
Phone: +61 7 3229 0800
E-mail: pab@lincenergy.com.au

or

James Moses
Fortbridge Consulting
Ph: +61 420 991 574
Email: james.moses@fortbridge.com