INDEPENDENT REPORTS CONFIRM SIGNIFICANT POTENTIAL FOR LINC ENERGY S SHALE OIL IN THE ARCKARINGA BASIN

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1 ASX Announcement SAPEX DIVISION ASX Code: LNC OTCQX Code: LNCGY 23 January 2013 INDEPENDENT REPORTS CONFIRM SIGNIFICANT POTENTIAL FOR LINC ENERGY S SHALE OIL IN THE ARCKARINGA BASIN Independent prospective resource reports completed by both DeGolyer and MacNaughton (D&M) and Gustavson Associates (Gustavson) confirm the significant potential of shale oil in the Arckaringa Basin Unrisked prospective resources for unconventional reservoirs in the Arckaringa Basin have been estimated by Gustavson to be 233 billion barrels of oil equivalent (BOE) Unrisked prospective resources for unconventional reservoirs in the Arckaringa Basin have been estimated by D&M to be 103 billion barrels oil equivalent Gustavson has also conducted a preliminary assessment of resource potential in conventional reservoirs in portions of the Arckaringa Basin, amounting to a separate 125 billion BOE on an unrisked basis Linc Energy holds a 100% interest in licences and applications covering approx. 65,000 contiguous square kilometres (16 million contiguous acres) in the Arckaringa Basin Linc Energy is working with Barclays Bank to introduce a joint venture partner that has shale oil expertise and will fund the development of the Arckaringa Basin assets Linc Energy (ASX: LNC) (OTCQX:LNCGY) is pleased to announce that two separately commissioned and independent reports from DeGolyer and MacNaughton (D&M) and Gustavson have confirmed the significant resource potential of the three formations of the Arckaringa Basin (the Stuart Range, Boorthanna and Pre-Permian). The unrisked prospective resources for unconventional reservoirs in the Arckaringa Basin have been estimated by Gustavson to be 233 billion barrels of oil equivalent (233 BBOE) and by D&M to be 103 billion barrels oil equivalent (103 BBOE). Executive summaries of both reports have been attached to this announcement. Analysis presented in these reports indicates that the Stuart Range formation and the underlying Boorthanna and Pre-Permian formations are rich in oil and gas prone kerogen that may form the basis of a new liquids-rich shale play. The conclusions presented by D&M and Gustavson are consistent with Linc Energy s view that formations within the Arckaringa Basin have excellent resource play potential with total organic carbon (TOC) levels, permeability, porosity and thickness that compare favourably to prolific US unconventional liquids plays such as the Bakken and Eagle Ford.

2 ASX Announcement continued ASX Code: LNC OTCQX Code: LNCGY The independent experts deal with the unconventional resources of the three formations within the Arckaringa Basin in different ways. Gustavson considered the data gathered to date and assigned the prospective resources in all three formations to the oil generation window of thermal maturity but acknowledged the potential for gas in the deeper parts of the basin. D&M assigned gas-liquids ratios to the various depth intervals in each formation resulting in estimation of prospective resources of oil in the shallower depths and gas in the greater depths. D&M was also commissioned to provide a risked estimate of prospective resources by applying a probability of geologic success. Gustavson also identified the potential for conventional hydrocarbon resources while working with the data presented. The Gustavson report includes prospective resource estimates for a portion of the deeper parts of the Arckaringa basin. These estimates provide strong encouragement that the balance of the basin may also be prospective for conventional hydrocarbon deposits and suggests that additional work on conventional resource potential is justified. DeGolyer and MacNaughton (D&M) is one of the most respected names in the upstream segment of the oil and gas consulting industry, providing reserves consulting services, resources evaluations, field studies, reservoir simulation studies, and many other services for energy companies worldwide. The firm employs more than 100 professional petroleum engineers, geologists, petrophysicists, statisticians and energy economists. Gustavson Associates, LLC (Gustavson) is a global consulting firm consisting of geologists, geophysicists, and petroleum engineers, as well as economists and financial experts dedicated to the business of problem solving in all aspects of natural resource evaluations. Gustavson s work ranges from the first steps of prospecting to design and assessment of production facilities. The company has a 30+ year track record of quality consulting to industry and governments worldwide and utilizes the latest technology to analyse large volumes of data. Linc Energy Petroleum licences cover the majority of the Arckaringa Basin, amounting to more than 16 million contiguous acres throughout the basin. Linc Energy has appointed Barclays Bank to advise on strategic options, including the introduction of an experienced shale operator to joint venture the development of this emerging world-class shale play. Peter Bond, Managing Director and CEO, said, Linc Energy is committed to delivering the best outcome for the development of this acreage and maximising value to shareholders. The best way for Linc Energy to do that is to bring in an industry expert with the know-how and funding to drive this asset forward to production as promptly and as efficiently as possible. Media contact: Belinda Taylor GM Corporate Communications e: belinda.taylor@lincenergy.com - 2 -

3 ASX Announcement continued ASX Code: LNC OTCQX Code: LNCGY Prospective Resource Assessment Summary Unconventional Reservoirs DeGolyer and MacNaughton Unrisked Low Best High Mean Risked Mean Oil Resources MMBBL 14,358 20,915 30,468 21, Gas Resources TCF Condensate Resources MMBBL 16,693 30,578 56,018 34,187 1,263 Solution Gas Resources TCF Total Prospective Resources MMBOE 60,370 95, , ,800 3,510 Gustavson Associates Unrisked Interval Low Best High Stuart Range Formation MMBBL 7,228 13,280 24,873 Boorthanna Formation MMBBL 5,130 12,472 26,010 Pre-Permian Strata MMBBL 74, , ,334 Total Prospective Resources MMBBL 86, , ,217 Note: 1) The information contained in this announcement is based on the DeGolyer and MacNaughton report dated 21 January 2013 and Gustavson Associates, LLC report dated 19 January ) The Prospective Resources estimates presented in these reports have been prepared in accordance with the Petroleum Resources Management System (PRMS) approved in March 2007 by the Society of Petroleum Engineers, the World Petroleum Council, the American Association of Petroleum Geologists, and the Society of Petroleum Evaluation Engineers by DeGolyer and MacNaughton by John W. Wallace (consultant) and Gustavson Associates by Michele Gregg Bishop, each of whom is qualified in accordance with ASX listing rule 5.11 and has consented to the form and content in which their respective prospective resource estimate appears. 3) Prospective Resources are those quantities that are estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Application of any geological or economic chance factor does not equate prospective resources to contingent resources or reserves. 4) Pg, the probability of discovering reservoirs that flow petroleum at a measurable rate, has been applied to the Risked Mean volumes. 5) Low, best, and high estimates in this table are P 90, P 50, and P 10, respectively. 6) There is no certainty that any portion of the prospective resources estimated herein will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the prospective resources evaluated. Media contact: Belinda Taylor GM Corporate Communications e: belinda.taylor@lincenergy.com - 3 -

4 ASX Announcement continued ASX Code: LNC OTCQX Code: LNCGY Global Shale Play Comparison Table Shale Property Eagle Ford Bakken Arckaringa Basin Organic-rich Shale Age Cretaceous Devonian, Mississippian Permian Lithology Bituminous Shale Sandstone, Carbonate Marine shale, Siltstones Depth 7,000 14,000 (ft) 2,100 4,300 (m) 8,500 10,500 (ft) 2,600 3,200 (m) 2,000 4,300+ (ft) 600 1,300+ (m) Thickness (ft) (m) (ft) 3 45 (m) (ft) (m) Porosity 6 14 % 3 8 (%) 5 17 (%) Kerogen Type Type II Type I / II Type I / II TOC 2 6% 7 22% % Vitrinite Reflectance (Vro) % % % Tmax ~833 o F ~445 o C ~800 o F ~425 o C ~825 o F ~440 o C Estimated Recoverable ~ 10.8 Billion BOE ~ 5.4 Billion BBL ~ 3.5 Billion BOE (2) Resource (1) Area ( 000 sq km / million acres) (1) 19.7 / / / 4.0 (2) Data Source Wall Street Research Linc Energy Note: 1) Eagle Ford and Bakken estimates based on U.S. Energy Information Administration Annual Energy Outlook 2012, dated June Eagle Ford comprises 2.5 billion BBL liquids and 50.2 TCF gas. EIA area estimate for Eagle Ford includes dry gas acreage - liquids rich acreage amounts to 8,300 km 2 / 2 million acres. 2) Arckaringa Basin prospective resources net to Linc Energy acreage only, adjusted for probability of geologic success, based on D&M report dated 21 January 2013 (3.5 billion BOE at 51% liquids). Area relates to c. 4 million acres within Linc Energy s Arckaringa Basin acreage containing sweet spots where accumulations of organic rich shale are expected. Total Arckaringa Basin area amounts to 80,000 km 2 (19.8 million acres) Media contact: Belinda Taylor GM Corporate Communications e: belinda.taylor@lincenergy.com - 4 -

5 ASX Announcement continued ASX Code: LNC OTCQX Code: LNCGY Arckaringa Basin Location Marla Arckaringa Basin PEL118 PEL117 PELA 604 PEL119 Oodnadatta PEL121 PEL122 Coober Pedy PEL123 Cooper Basin Moomba PEL124 Prominent Hill project NT QLD WA SA NSW VIC Ceduna Linc petroleum exploration licence Linc petroleum exploration licence application Petroleum exploration licence Gas pipeline Gas field Miles Oil/NGL pipeline Oil field Kilometres Port Lincoln Olympic Dam project Port Augusta Whyalla PEL 120 ADELAIDE Leigh Creek Media contact: Belinda Taylor GM Corporate Communications e: belinda.taylor@lincenergy.com - 5 -

6 ASX Announcement continued ASX Code: LNC OTCQX Code: LNCGY Seismic in the Arckaringa Basin Drilling in the Arckaringa Basin Media contact: Belinda Taylor GM Corporate Communications e: - 6 -

7 ASX Announcement continued ASX Code: LNC OTCQX Code: LNCGY About Linc Energy Linc Energy is focused on both conventional and unconventional oil and gas production. The Company owns a diverse and world-class commodity portfolio that includes oil, gas, shale and coal. Conventional oil and gas is focused onshore USA (Alaska, Texas, Louisiana and Wyoming) with current production expected to grow significantly from the Company s existing reserves. Unconventional oil and gas is focused on our world leading capability in Underground Coal Gasification, the process of converting coal into a valuable synthetic gas in situ. Linc Energy has constructed and commissioned the world s only UCG to GTL demonstration facility. The Company also owns and operates the world s only commercial UCG operation in Uzbekistan, which supplies syngas to a nearby power station. Linc Energy is listed on the ASX (Australia) and the OTCQX (USA). About DeGolyer and MacNaughton DeGolyer and MacNaughton (D&M) is one of the most respected names in the upstream segment of the oil and gas consulting industry, providing reserves consulting services, resources evaluations, field studies, reservoir simulation studies, and many other services for energy companies worldwide. The firm employs more than 100 professional petroleum engineers, geologists, petrophysicists, statisticians and energy economists. About Gustavson Associates Gustavson Associates, LLC (Gustavson) is a global consulting firm consisting of geologists, geophysicists, and petroleum engineers, as well as economists and financial experts dedicated to the business of problem solving in all aspects of natural resource evaluations. Gustavson s work ranges from the first steps of prospecting to design and assessment of production facilities. The company has a 30+ year track record of quality consulting to industry and governments worldwide and utilizes the latest technology to analyse large volumes of data. Media contact: Belinda Taylor GM Corporate Communications e: belinda.taylor@lincenergy.com - 7 -

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