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Matthew Smith has been a business and financial journalist for more than a decade. He previously worked with the Financial Times Group, reporting from New York on company buyouts and refinancing in the wake of the Global Financial Crisis. He started his career reporting on the funds management industry in Sydney.

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Linc deal six months away, says Bond

Published 24 January 2013 12:13, Updated 28 January 2013 10:52

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Linc deal six months away, says Bond

Linc Energy chief executive Peter Bond says it might be as long a six months before the company writes deal for its South Australian shale assets. Photo: Glenn Hunt

The potential deal that pushed Linc Energy shares up as much as 20 per cent on Wednesday may take six months to come to fruition, Linc chief executive Peter Bond says.

On Thursday, shares in Linc Energy was as high as high as $2.54, bouyed by the apparent potential of a deal for the partial sale of the company’s South Australian shale oil assets.

But that deal may not happen until the second half of 2013, Bond says. “It will be the better part of the next six months before this deal is done.”

Linc released two independent estimates for the shale oil resources on Wednesday – one states the asset potential at 233 billion barrels, the other 103 billion barrels. The company previously appointed investment bank Barclays to find an investment partner to develop the assets.

A 40 per cent shareholder in Linc, Bond, says the independent estimates on its shale oil resources in the Arckaringa Basin were released to whet the appetite of investors leading up to a road show that will take place over the next three to four weeks.

Major oil companies including Shell and Total, as well as second tier oil companies such as Adani and Apache Corporation, as well as large Asian oil companies, would likely be interested in the South Australian shale oil assets – Bond tells BRW – now lauded to be among the most prominent in the world.

Alongside its shale oil assets in South Australia, Australian coal assets and oil assets in North America, Linc has invested heavily in developing underground coal gassification (UCG) technology, a technique used to reach hard-to-get coal deposits.

Bond has previously told BRW his long-term plan for the company is to separately spin off its coal interests in Australia and its oil assets in North America, and seek global partners with coal deposits to co-invest in its UCG technology.

Bond is expected to make a good showing in this BRW’s 2013 Rich 200 list, having doubles Linc’s market cap already this year, adding almost $500 million to his own net worth on paper.

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