An Australian firm better known for underground coal gasification and gas-to-liquids technology has acquired 14 producing oil fields on the Texas and Louisiana Gulf Coast from Houston-based ERG Resources.
Linc Energy acquired the fields, which span 156 leases on 13,400 acres in the Gulf Coast Region of Texas and Louisiana, for $236 million.
The fields are currently producing 3,300 barrels per day, but Linc plans to use enhanced oil field recovery techniques, such as carbon dioxide injection, and more drilling to improve output.
Linc Energy’s CEO Peter Bond said the acquisition will help the company reach its goals of more than 20,000 barrels per day of oil production by the end of 2012 and grow cash flows from operations.
“These assets are cash flow positive from day one of the acquisition,” Bond said.
The fields contain net proven reserves of 20.5 million barrels of oil and net proven and probable reserves of 22.3 million barrels, the company said.
According to AP, 12 of the fields are located along the Texas Gulf Coast and Texas inland water areas. Five of those fields will be targeted for additional evaluation of production potential. The major field in Louisiana is the Black Bayou field in Cameron Parish where the company plans an aggressive drilling project.
The Royal Bank of Scotland is providing financing to support the acquisition and for the first year of capital expenditures for both the ERC deal and the recently acquired oil field assets in Wyoming of Rancher Energy Corp., Linc said.
Linc currently has operations in Alaska and Wyoming.
Brisbane-based Linc is planning to produce diesel and jet fuel in Australia via underground coal gasification, a process where coal is burned underground and the gas from the process collected at the surface. The gas is then converted to fuel using gas-to-liquids technology that Linc has developed.
