Linc Energy Limited (ASX:LNC) Breaks New Ground With UCG Oxygen Injection

Brisbane, May 19, 2010 AEST (ABN Newswire) - Linc Energy Limited (ASX:LNC) (PINK:LNCGY) announced today that its Underground Coal Gasification (UCG) team had successfully commenced and commissioned its 'oxygen injection' process at Chinchilla over the weekend. The Company's UCG team experienced an effective step change in the key quality gas measures within hours of commencing the oxygen enrichment process, including an increase in gas flow rates.

Linc Energy's Chief Executive Officer, Mr Peter Bond said "The philosophy of oxygen injection into the UCG process is that by completing an oxygen enrichment of the air being injected into the underground gasification process, it will ensure a better quality and more pure syngas is produced."

"Injecting more oxygen ensures a better conversion of the coal into carbon monoxide and hydrogen and subsequently less nitrogen." said Bond.

Oxygen injection also allows Linc Energy to complete underground coal gasification in deeper coal seams much more economically thereby opening up a significant number of coal opportunities around the globe.

"The deeper the UCG process, the higher the pressure that is required to pump air or oxygen down the UCG injection well. Subsequently by enriching the air by the injection of oxygen, the result is lower nitrogen and lower compression costs."

Linc Energy has found that oxygen enriched air (being a mixture of oxygen and air which is being injected) is the most proficient, effective and economical way forward and pure oxygen injection is simply not economical.

"We can now reach down to very deep coal seams and one can see how this opens up even more opportunities for our team to unlock the energy value of these stranded coal seams. This achievement of oxygen injection at Chinchilla is a huge credit to the entire UCG team and moves us further towards commercialisation."

"This is an outstanding success for Linc Energy - it allows us, as a Company, to push forward into a number of additional commercial opportunities such as chemical and methanol production."

"It also means that any potential market which has deep stranded coal and requiring high quality syngas can now utilise Linc Energy's groundbreaking work on UCG."

The recent commissioning of Linc Energy's UCG 'Generator 4' continues to be an outstanding success after months of continuous operation and the successful work on oxygen injection into Generator 4 is yet another testament to the level of skills and technology that Linc Energy is pioneering." said Bond.

For the full Linc Energy announcement including figures, please view the following link:

http://www.abnnewswire.net/media/en/docs/62901-ASX-LNC-220753.pdf

Contact

Mr Peter Bond Chief Executive Officer Tel: +61-7-3229-0800 Email: pab@lincenergy.com.au