Linc Energy acquires US oil & gas assets from ERG Resources for $236 million

Australia's Linc Energy yesterday acquired 14 producing oil fields in the US Gulf Coast from ERG Resources, for $236 million – a move aimed at almost doubling its production.

Brisbane-based Linc acquired 14 producing oil fields consisting of 156 leases covering approximately 13,400 acres located in Texas and Louisiana.

The assets purchased consist primarily of oil and gas leases, property interests and 410 wells upon the Texas and Louisiana oil fields which are held directly by ERG Resources or by three wholly-owned subsidiaries of ERG Resources. 

Linc said that according to independent reports commissioned by it indicate that the fields have the potential to increase recoverable oil by up to 24 million barrels by optimisation of current production and additional drilling operations.

Current oil production is about 3,300 barrels per day and Linc said it plans to increase production, through additional drilling and optimisation, to more than 6,300 barrels per day by the fourth quarter of 2012.

"This acquisition is the next big necessary step that Linc Energy has taken to meet its two key business targets over the coming 12 to 18 months. The first of these targets is to achieve in excess of 20,000 barrels per day of oil production by the end of 2012, with at least 10,000 barrels of production by the end of 2011. The second key target for the company, supported directly by achieving this first target, is to develop very profitable, solid cash flows from operations," said Peter Bond, CEO of Linc Energy.