BBY Limited
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Linc Energy Limited
Successfully Produces UCG Gas
LNC A$0.70
BUY
3 September 2007 S&P/ASX 200 20 July 2007 XJO Jeremy Tobias
+612 9226 0086
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BBY maintains its BUY recommendation on Linc Energy Limited (LNC) after the company announced that it had commenced flaring gas from its Underground Coal Gasification (UCG) site located at Chinchilla, QLD. Importantly, LNC’s own team has been responsible for the successful commissioning of the UCG gas field and have also been responsible for the design and construction overview of the field as well. Today’s announcement is a significant milestone for the company because it partially de-risks the project, however we note that there are still some hurdles to overcome. We retain our 12 month price target of A$0.90/sh and DCF valuation of A$1.52/sh (Chinchilla only). Key take-outs from the announcement