BBY Limited
RESOURCES b
Linc Energy
Combining Two Technologies to Produce Ultra Clean Diesel and Jet Fuel
Jeremy Tobias
+612 9226 0086
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May 2006
ASX: LNC
Issue Price:
$0.25
Number of Shares:
320.9m
Market Capitalisation:
$80.2m
Recommendation: BUY

Summary
• Valuation of A$1.52 per share (DCF valuation) using a conservative long-term WTI Oil Price of US$42/bbl.
• The company is aiming to be a world leading producer of ultra clean diesel and jet fuels via the development of a Gas to Liquids (GTL) processing facility located at Chinchilla,
Queensland. This initiative has the potential to deliver significant commercial quantities of gas for the production of ultra-clean, sulphur free diesel and jet fuels to a market exhibiting an ever-increasing demand for these products.
• Linc has developed a three-stage business model incorporating
1) the construction of a 5bpd demonstration GTL plant (Stage 1);
2) the construction/operation of a commercial level 20kbpd GTL plant (Stage 2); and,
3) the expansion of Linc’s Underground Coal Gasification (UCG) and GTL diesel production process into global markets (Stage 3).
• Linc has forward licensing and offtake arrangements in place with various industry leaders including Syntroleum Inc, BP Australia Limited and Ergo Exergy Technologies Inc.
• Chinchilla has an estimated coal deposit of 300Mt supporting a 60-year project life.
• Linc’s capital expenditure estimate of US$22k-24kbpd is within the generally accepted US$20k-40kbpd range.
• The company is led by an experienced and strong management team.