Australia’s Linc plans merger with SAPEX

Australia’s coal-to-liquid company Linc Energy has agreed to take over upstream junior SAPEX, an oil and gas exploration company, the companies said on June 12. Under the terms of the deal, Linc Energy would acquire all of the shares and options in SAPEX for a cash consideration of A$0.72 (US$0.68) and A$0.50 (US$0.47) respectively. SAPEX shareholders and option holders would have the alternative of taking 50% or 100% of the cash consideration in Linc Energy shares. SAPEX holds a range of properties with coal seam gas or underground coal gasification potential, including seven petroleum exploration licences covering around 65,000 sq km in the under explored onshore Arckaringa Basin in South Australia. Linc Energy has built and begun commissioning a CTL demonstration plant at Chinchilla in Queensland and has a 60% interest in Yerostigaz in Uzbekistan, which is the only commercial underground coal gasification operation in the world. The company has signed a memorandum of understanding with SAPEX and other entities in China and Vietnam with access to significant coal resources, with the ultimate aim of establishing underground coal gasification fields and CTL facilities. (June 13, 2008)