GICS - Energy

Linc Energy Ltd ASX Code: LNC Price: $0.675

Business Summary Snapshot Linc Energy Ltd (LNC) is involved in development and commercialisation of Date 10 July 2012 Coal-to-Liquids (CTL) processes through the combined utilisation of Market Cap. $341m Shares on issue 504.5m Underground Coal Gasification (UCG) and Gas to Liquids (GTL), using clean 12 Month High $2.99 coal technology. LNCs operations are located in four principal locations: 12 Month Low $0.59 Australia (QLD and SA), North America (Colorado, Wyoming, Montana and Alaska), Europe (London) and Asia (Uzbekistan). The operations consist of Investment Fundamentals three key divisions namely coal, clean energy and oil & gas. FYE 30 Jun 2008A 2009A 2010A 2011A Coal: The division focuses on acquisition, exploration, development of LNC's Profit $m -4.2 -42.2 -16.3 -204.6 coal resources to support UCG operations. Currently, the division has drilling Profit (norm)* $m -4.2 -42.2 -16.3 296.5 programs upon Northern Leases (QLD), SAPEX leases (SA) which includes EPS* ¢ -1.2 -10.4 -3.5 -39.8 Arckaringa, Copper and Walloway Basins, Powder River Basin leases EPS Growth % 0.0 0.0 0.0 0.0 (Wyoming) and Cook Inlet Basin leases (Alaska). Currently, LNC plans to P/E* x 0.0 0.0 0.0 0.0 Plans for develop an underground longwall mine at Teresa coal asset in the P/E Relative % 0.0 0.0 0.0 0.0 Bowen Basin in QLD. DPS ¢ 0.0 0.0 0.0 0.0 Clean Energy: The division focuses on UCG or other gasification processes Yield % 0.0 0.0 0.0 0.0 combined with downstream operations. The platforms of clean energy include Franking % 0.0 0.0 100.0 0.0 Underground Coal Gasification (UCG), Modularised Gas to Liquids (GTL), * Adjusted for unusual items power generation, investment in emerging technologies (PowerHouse and Source: Aspect Huntley historical financials AFC Energy fuel cells) and development of additional downstream options Share Price Chart (e.g. methanol). Currently, the division is working on UCG Gasifier 5 (G5) in Chinchilla and UCG operation in Wyoming. Oil & Gas: The division focuses on production of traditional oil and gas from new and depleting known reservoirs in USA using traditional and CO2 Enhanced Oil Recovery (EOR) techniques. LNC has four prospective areas: Wyoming, Gulf Coast (Texas & Louisiana), Alaska and Arckaringa Basin (SA). To date, Gulf Coast and Wyoming are in the first year of production, with a daily oil production capacity of approximately 2,350 (Net)/ 3,175 (Gross) as at December 2011.

Total Return on $10,000 Investment

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Profit & Loss ($M) Cash Flow ($M) 2007A 2008A 2009A 2010A 2011A 2007A 2008A 2009A 2010A 2011A Sales Revenue -- 0 2 2 4 Receipts from Customers -- 0 3 2 4 Total Revenue ex. Int. 0 0 2 2 505 Funds from Operations -3 -3 -16 -12 -30 EBITDA -4 -4 -20 -40 -78 Net Operating Cashflow -3 -3 -18 -15 -62 Depreciation & Amort. -0 -0 -16 -20 -12 Capex -10 -26 -37 -49 -84 Goodwill Amortisation ------Acquisitions & Investments -- -9 -86 -- -35 EBIT -4 -5 -36 -59 -90 Sale of Invest. & Subsid. ------Net Interest 1 1 -4 -5 22 Net Investing Cashflow -9 -34 -121 -49 401 Profit Before Tax -3 -4 -40 -64 -69 Proceeds from Issues 0 34 122 70 8 Income Tax -- -0 -2 48 -136 Dividends Paid ------50 Outside Equity Int. -- 0 -0 0 0 Net Financing Cashflow 2 33 140 68 -37 Profit after Tax -3 -4 -42 -16 -205 Net Increase Cash -10 -4 2 4 302 Significant Items after Tax ------501 Cash at Beginning 18 8 3 3 7 Reported Profit after Tax -3 -4 -42 -16 296 Exchange Rate Adjust. -- -- 0 -0 1 Preferred Dividends ------Cash at End 8 3 5 7 310

Ratios and Substantial Shareholders Balance Sheet ($M) 2007A 2008A 2009A 2010A 2011A 2007A 2008A 2009A 2010A 2011A Profitability Ratios Cash & Equivalent 8 3 5 7 310 EBITDA Margin % -- -3,275 -967.80 -1,965 -2,110 Receivables 1 101 0 0 2 EBIT Margin % -- -3,608 -1,755 -2,934 -2,447 Inventories -- 0 0 0 1 Net Profit Margin % -- -3,290 -2,074 -802.72 -5,532 Other Current Assets 0 0 0 1 17 Return on Equity % -23.32 -2.89 -27.29 -6.97 -39.83 Current Assets 8 105 15 22 339 Return on Assets % -17.66 -2.38 -21.14 -4.72 -34.00 Prop. Plant & Equipment 5 46 58 10 38 Intangibles -- 1 1 1 2 Debt/Safety Ratios Other Non-Current Assets 0 0 0 3 22 Net Debt/Equity % -38.53 0.20 7.80 -0.46 -59.51 Non-Current Assets 10 64 163 242 262 Interest Cover x 5.63 5.73 -8.12 -13.16 4.16 Total Assets 18 168 179 264 601 Interest Bearing Debt 2 4 17 6 5 Top 5 Substantial Shareholders Other Liabilities 2 18 7 25 83 Newtron Pty Ltd 40.0% Total Liabilities 4 21 24 31 87 UBS AG and its related bodies corporate 6.3% Net Assets 14 147 155 233 514 Share Capital 34 166 199 287 309 Reserves 1 4 23 29 40 Retained Earnings -20 -25 -67 -83 164 Outside Equity Int. -- -0 0 0 0 Total Shareholders Equity 14 147 155 233 514

Current Analyst Recommendations * Principals & Directors Principals Company Secretary Mr Brook Burke Directors Mr Peter Adam Bond(Managing Director) Mr Kenneth Eidler Dark(Non-Executive Director) Mr Craig Steven Ricato(Executive Director) Mr Jon Mathews(Non-Executive Director)

* Source: Morningstar. This chart shows the spread of recommendations from those broker analyst's in Australia with research coverage of this stock.

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