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Linc Energy Ltd

32 Edward Street Telephone: +61 7 3229 0800 website: www.lincenergy.com

Brisbane Qld 4000 Fax: +61 7 3229 6800 email: [email protected]

ASX (LNC) OTCQX (LNCGY) ACN 076 157 045

Quarterly Report 1 April 2012 – 30 June 2012

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mailto:[email protected]

HIGHLIGHTS

OIL & GAS CLEAN ENERGY COAL SAPEX (Shale)

Preparation for the 2012–2013 winter drilling season at Umiat on Alaska’s North Slope, including execution of contract for drill rig and site camp for personnel. Continuation of permitting activities, including Umiat pipeline.

High level of drilling and re-completion activity resulting in significant increase in gross production to 4,000 barrels of oil per day (BOPD).

Operations remain on track to achieve targeted increases in oil production by end of 2012 to over 6,000 BOPD.

Commencement of final engineering phase for CO2 flood in Wyoming.

Working closely with GCL to complete proposed joint venture into China.

Gasifier 5 (G5) remained 100% on-stream over the Quarter with custom designed downhole equipment for oxygen injection successfully installed.

Submission of Wyoming R&D License Application.

Completion of 2D seismic program in UCG License Area in Alaska.

Linc Energy and Exxaro UCG Concept Study successfully completed.

Approval of 2 exploration drill wells in Poland.

Options analysis undertaken for the divestment of the coal business.

The drilling continuing to enable the completion of the prefeasibility study commenced.

The works program for the EIS study progressed in line with expectations with the exception of the delays associated with drilling due to excessive wet weather.

Management structure for coal expanded to meet the needs of a growing coal division.

Planning underway for approx. 1000km 2D and 3D seismic in Arckaringa Basin.

Evaluating seismic equipment program.

Evaluating current seismic data.

Setting up of process to commence sale or joint venture of the significant Arckaringa shale acreage Linc Energy owns.

DIRECTORS COMPANY SECRETARY Acting Chairman and Director (Non-Executive) Mr Ken Dark

Managing Director Mr Peter Bond

Mr Brook Burke

Director, Legal & Corporate Affairs Mr Craig Ricato

Director (Non-Executive) Mr Jon Mathews

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Linc Energy Ltd Quarterly Report 1 April 2012 – 30 June 2012 Page 3 of 27

CORPORATE

Management Change

The Chief Financial Officer of Linc Energy, Mr Anton Rohner, has resigned from the Company to take up a position with another company in Western Australia. His resignation takes effect on 3 August 2012. The Company thanks Mr Rohner for his efforts over the past three years and wishes him all the best in his next endeavour. The Company has commenced recruitment of Mr Rohner’s successor and will advise the market once an appointment has been made. There has been speculation that with Mr Rohner’s departure, Linc Energy would seek to complete an equity raising in the market. At this stage, the Board of Directors has no intention of undertaking an equity raising under the current market conditions although the Company has a number of active fiscal alternatives including increasing oil revenues.

Cash Flow

Closing cash at the end of this the Quarter was $27.1 million. During the quarter Linc Energy drew a further $30.0 million of the $120.0 million Fortress Line of Credit Facility, taking total drawings to $60.0 million. The Line of Credit allows the Company to continue its planned activities across all of its business divisions whilst it progresses previously announced commercial initiatives and the US oil operations continue to ramp up to a level sufficient to enable the Group to fund its ongoing cash needs.

Cash revenue for the Quarter from Oil & Gas production was $15.5 million while Linc Energy’s gross revenue for the Quarter was $19.15 million taking into account movements in accrued revenues. A net of $1.7 million was paid in respect of hedges required by the Reserve-Based Lending Facility. During the Quarter the hedge settlement swung from a net liability to a net receivable due to the significant decrease in the price of oil during June.

Other material payments during the Quarter included:

Exploration expenditure of $6.6 million, related to the ramp up in resource

definition and Environmental Impact Report related drilling at the Teresa project ($5.2 million) and UCG exploration in Alaska ($1.2 million).

Development costs of $17.2 million relate mainly to Gulf Coast drilling and recompletions ($9.4 million), Wyoming ($0.3 million), Gasifier 6 ($0.6 million) and CTL technology development ($6.9 million, including Chinchilla operations costs).

Production costs relate mainly to the Gulf Coast Oil & Gas business ($2.7 million) and Yerostigaz ($0.3 million). Please note that the actual production costs recognised in P&L will be materially higher due to trade creditors and accrued expenditure.

Administration costs were $15.6 million ($2.8 million lower than the previous Quarter).

The cashflow for the quarter includes approximately $0.5 million in restructuring costs relating primarily to redundancy payments to Australian staff which were paid in June. Further redundancy costs in the US operations were provided for in June but were paid in July.

Quarter Operational Results

Quarterly production results are driven materially by US Oil & Gas production.

Month

Gross Production

(Bbls)1

Average Bbls per Day Production

April 2012 72,451 2,415

May 2012 89,553 2,889

June 2012 97,886 3,263

Total/Avg 259,890 2,856

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CORPORATE

The Group’s aggressive drilling campaign in the Gulf Coast has had a material impact on average production during the Quarter, as the chart below illustrates.

LINC ENERGY 2012 OIL PRODUCTION (BOPD)

Highlights for this Quarter include:

Gross oil production increased to 4,000 barrels per day by the end of the Quarter.

Average daily production of 2,856 (Gross)/2,060 (Net) barrels, a 17% increase in gross production compared to the previous Quarter.

Total barrels sold increased from 222,032 in Q3 to 259,890 for the current Quarter. Linc Energy’s share of sales was 189,046 barrels (72.74%).

Average sale price per barrel was A$99.502 with average lease operating expenses (costs) of A$36.60 per barrel (Q3: A$30.47) which were higher due to increased workover activity during the Quarter. Production taxes averaged A$5.02 per barrel (Q3: $4.64) and are increasing on an average due to the higher production from Louisiana which has the highest rate of tax at 12.5% (Texas 4.6%, Wyoming 6%).

Notes: 1 Production figures are final reconciled and include true-ups from prior months, 2 All current quarter figures are calculated using an average exchange rate for the quarter of US$1.00/A$1.01.

Gross actual oil production capacity at the end of the Quarter (assuming all available wells were producing) exceeded 4,200 barrels per day. Production at the Atkinson Island field (approx. 350 BOPD) was shut in during the quarter due to Army Corps of Engineers dredging activities in the area.

Linc Energy is confident of reaching its previously announced production target of 6,000 to 7,000 Gross barrels per day by December, 2012. The Group plans to spend approximately $20.5 million on drilling and recompletion activities in the first Quarter of FY2013 targeting new wells and recompletions.

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GULF COAST GROSS PRODUCTION (BOPD) ACTUAL + FORECAST

Port Neches

Leeville Field

Hull Field

Hoskins Mound

High Island

Grass Island

Goose Creek

Cedar Point

Black Bayou

Barbers Hill

Atkinson Island

AQUARIUM

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OIL & GAS

Exploration activities

Alaska

The Company continues preparations for the 2012-2013 Winter drilling program at its Umiat asset on Alaska’s North Slope. The program includes construction of approximately 100 miles of snow road, drilling and testing of shallow vertical and horizontal delineation wells, as well as drilling and testing of a deep exploration well. The information gained from this program will help to validate the geological model, define the extent of the reservoirs, determine oil and rock properties for input into a reservoir simulation model, determine comparative production rates for horizontal and vertical completions, and gather information on deeper reservoirs.

Meanwhile, the Company is actively engaged in all permitting activities, community and agency consultation, and creation of the Project Description and Plan of Development.

In Cook Inlet, the majority of the Company’s oil and gas leases reached the end of their primary term and expired on 1 June. The State of Alaska requires that leases either be in production or be held under a Unit in order to carry forward past the end of the primary term. The Company did retain two Cook Inlet oil and gas leases totalling approximately 1950 acres under application for the Angel Unit.

The Angel Unit, composed of one State of Alaska and one Mental Health Trust, will be located southwest of the LEA #1 location and contains the geological and geophysical parameters which makes it highly prospective for conventional natural gas accumulation. The Company will explore and develop the Unit under a three year Unit Plan which includes 3D/2D seismic, drilling and pipeline development. The Unit is situated less than one mile from the regional 20” common-carrier delivery pipeline servicing all of south-central Alaska.

Gulf Coast (Texas & Louisiana)

The J.M. Brown #1 well at Barbers Hill was successfully drilled and completed, encountering over 210 feet of gross pay in 4 intervals. Average production to date: 330 BOPD.

The J.M. Brown #2 well at Barbers Hill was successfully drilled and completed, encountering over 400 feet of gross pay in 7 intervals. Average production to date: 267 BOPD.

NEW TANK BATTERY AT BARBERS HILL, WHICH SERVICES THE

KERLEY #2, BROWN #1 AND BROWN #2 WELLS

The E.C. Kerley #2 well at Barbers Hill was successfully drilled and completed, encountering over 190 feet of gross pay in 2 intervals. Average production to date: 70 BOPD.

PUMPING UNIT AT THE KERLEY #2 WELL

The J. Wilburn A-23 well at Barbers Hill was successfully drilled and completed, encountering multiple pay zones. Average production to date: 200 BOPD. The J.B. Watkins #270 well at Black Bayou was successfully drilled and completed, encountering over 150 feet of gross pay in

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OIL & GAS

3 intervals. Average production to date: 270 BOPD.

The J.B. Watkins #269 well at Black Bayou was successfully drilled to 8,700’, encountering multiple pay zones. Completion operations have commenced.

Recompletions were performed on the Constantin #2 at Leeville Field (150 BOPD), the J.B. Watkins #254 well (120 BOPD) at Black Bayou, and the Higgins #8 well (100 BOPD) at Barbers Hill. A recompletion has commenced on the Higgins #1 well at Barbers Hill.

Drilling has commenced at Barbers Hill on the Monongahela #4 and the Kirby B-46 as well as the Welch Foundation #4 at Hoskins Mound.

INNODRILL VITESSE DRILL RIG THAT DRILLED THE WELCH

FOUNDATION #4 AT HOSKINS MOUND

Production Capacity

Current production capacity from the Gulf Coast and Wyoming assets is approximately 4,200 BOPD. An aggressive drilling and completion program in the Gulf Coast should allow the Company to reach its targeted

production range of 6,000-7,000 BOPD (Gross) by December, 2012.

Gulf Coast

Current oil production capacity in the Gulf Coast region is approximately 4,000 BOPD (Gross). Activity in the Quarter has created a significant ramp-up in production that should continue for the remainder of the year. The Company currently operates 4 drilling rigs and 1 completion rig in the region.

Wyoming

Reservoir modelling is complete and final engineering design is commencing for the CO2 flood in the Glen Rock field in Wyoming. The Company plans to drill and complete the injectors and producers for the Upper Muddy formation CO2 flood in the Glen Rock B Unit in spring and summer 2013 with initial injection of CO2 in early fall of 2013. A significant number of wells will be completed as dual completions which will allow for an accelerated flood of the Dakota formation in the Glen Rock B unit.

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CLEAN ENERGY

Overview

The formalisation of Linc Energy’s four divisional model in March of this year, together with the clear definition of dedicated senior management across the division, has materially contributed to a renewed strategic focus on the execution of the Company’s original mandate – the commercialisation and deployment of Linc Energy’s proprietary UCG and downstream technologies and the unlocking of this value for shareholders.

The Quarter has seen large steps taken to remove a number of distractions from the divisional agenda to focus on a clear mandate of prioritising UCG development opportunities taking into account our current resource and partnering position across the globe. The Clean Energy Division is increasingly well positioned to capitalise on the immediate opportunities through its realignment as a fully integrated and dynamic international team of UCG and downstream professionals whose execution of a timely UCG commercialisation programme has never been more greatly understood.

The Clean Energy team has approximately 24 commercial opportunities which we are evaluating with the aim of ensuring we select the two best commercial opportunities for the Company’s primary focus to take UCG to a commercial operation as quickly as possible. One of the main commercial options remains China through a Joint Venture with GCL.

The following provides an update on key initiatives across the Clean Energy business and the progress made in the Quarter in achieving the division’s mandate.

China

On 16 April 2012, the Commercial Terms Deed was signed with GCL Projects Limited (GCL) which outlined the structure of GCL’s proposed cornerstone investor position in Linc Energy as well as the Joint Venture structure for Linc Energy and GCL to progress UCG to GTL projects in China. Since the announcement, GCL has worked closely and

co-operatively with Linc Energy’s technical teams to complete its “Technical Due Diligence” in Brisbane and both companies are progressing towards completion of the remaining points of negotiation across the suite of legal documents.

Linc Energy and GCL are actively developing the legal documentation, with both companies working with their respective legal firms to facilitate this, which includes items such as Joint Venture structure, Intellectual Property access and protection, site selection and project work definitions. Both teams are working to complete the legal documentation to finalize this very large deal in the second half of the year.

On the technical side, GCL has provided a significant amount of coal resource data and work is progressing on resource definition and project site selection within the large Inner Mongolia coal area owned by GCL. The technical teams are currently scoping the project and preparing the work program to facilitate the start of site drilling activities as soon as possible after completion of the contract documents.

Queensland

Chinchilla

Gasifier 5 (G5) remained 100% on-stream over the Quarter, producing high quality syngas for the GTL facility. The gasification zone in G5 was successfully re-positioned within the horizontal well using Linc Energy’s proprietary coil tubing tools. This repositioning event led to a significant improvement in syngas quality and enabled access to more coal for conversion into gas. The successful repositioning effort has further confirmed the basis of Linc Energy’s UCG technology as being ready for commercial roll out.

A major goal for G5 is the sustained demonstration of the oxygen enriched gasification process. The use of oxygen enrichment leads to improved gas quality, higher gasification efficiency and reduces the capital cost of the downstream GTL plant. During the Quarter custom designed

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CLEAN ENERGY

downhole equipment for oxygen injection into G5 was successfully installed. This equipment enables oxygen injection to be performed safely at any location within the horizontal well and together with downhole instrumentation allows operators to control the oxygen injection process in real-time. Oxygen injection operations were successfully commenced during the Quarter and led to further improvements in syngas quality. Over the next six to nine months G5 will be used to validate Linc Energy’s detailed design for oxygen enrichment and to gather operating data to be used to improve the designs of commercial UCG projects.

Gasifier 4 continued to be decommissioned and is further demonstrating that Linc Energy’s UCG process can be operated from start up to shut down while meeting strict environmental standards. The decommissioning process for G4 is providing valuable operating experience and process data which is being fed into Linc Energy’s UCG design and operating models for commercial projects.

The Chinchilla GTL plant was commissioned and started up in May for the purpose of a dedicated performance test run of theFischer-Tropsch reactor. G5 syngas was fed into the GTL plant for a continuous period of 20 days. The syngas quality from UCG was successfully conditioned to meet the tight specifications required for the Fischer-Tropsch reactor. The performance test run has provided further validation of Linc Energy’s integration of UCG and GTL.

United States

Wyoming

On 30 April 2012, the Wyoming Clean Energy Team completed and submitted the final instalment of Linc Energy’s R&D License Application for the Gasifier 6 UCG Demonstration Project to the Wyoming Department of Environmental Quality – Land Quality Division (WDEQ-LQD). The approval process, as advised by the WDEQ, is anticipated to be concluded by the end of

2012, subject to statutory consultations and the number of clarifications sought. On 29 June 2012 Linc Energy received the first round of comments and clarifications back from the WDEQ. The team is quickly addressing each of these comments and will submit its response to the WDEQ in August 2012. The WDEQ must then evaluate Linc Energy’s comments and respond with any further clarifications within 30 days or move forward with the approval process. It is expected (and common) that this response and evaluation process may happen several times until the WDEQ is satisfied with Linc Energy’s license application before moving into the application’s public comment period.

During the Quarter, the exploration and geology team has been evaluating the drilling data obtained from the 2011 Powder River Basin drilling and exploration campaign. Several Logical Mining Units (LMU) have been identified in certain portions of the Powder River Basin that could support a commercial UCG program. With the vast coal mines, transportation infrastructure, natural gas infrastructure, water handling, and energy development in the PRB, the options for commercialization are vast. The challenge now for the next six months is to properly define these opportunities and agree project execution strategies for the post “G6” demonstration phase.

Alaska

Exploration work continued on the Interior UCG License Area acreage with the completion of the 2D seismic program north of Healy, Alaska. 2D profiles acquired along Poker Ridge and Walker Dome areas north of Healy gave some strong positive indications of coal sequences within the depth range most suitable for UCG development. Linc Energy’s seismic tool is adding great value in tracking the down-dip extension of the Suntrana Formation coals mined at the Usibelli Coal mine, which are the target of UCG development in the Interior.

The annual review of the exploration work undertaken on the UCG Exploration License acreage was developed and presented to the

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CLEAN ENERGY

Alaska Mental Health Trust (AMHT) by the Linc Energy Alaska team. AMHT continues to be an engaged and supportive partner in Linc Energy’s UCG development program in Alaska. Plans for the next exploration year (1 May 2012 to 1 May 2013) were outlined and a Plan of Operations Review document was submitted to AMHT.

Planning and preparations commenced for the next round of exploration drilling to be undertaken in support of commercial UCG opportunities in Cook Inlet. Two holes are planned for the Tyonek and Kenai UCG License areas respectively, with a third hole to be located on the Interior UCG License acreage near Anderson, Alaska in the Spring of 2013.

The Buffalo Core Rig (BCR) – a fit-for-purpose rotary-core rig built specifically for Linc Energy’s UCG exploration program neared completion with major components shipped to Alaska for final assembly of the rig. A labour contract to supply experienced drill crews in support of the BCR was executed with Kuukpik Drilling and rig commissioning is slated for early August 2012. Immediately after commissioning, the BCR will be moved to the KEEX02 location for placement of that exploration hole.

Importantly, in addition to the execution of the above drilling programme for the year, a renewed focus on project definition and the commercial terms around these opportunities will be fully explored and stakeholders engaged to consolidate the good work conducted on geological and resource assessment over recent years. Linc Energy remains bullish over the opportunities for UCG commercialisation in Alaska.

Poland

Good progress has been made in Poland with regards to Linc Energy’s “PWD” Coal Exploration Lease in the Upper Silesian Basin over the Quarter. Key highlights include the appointment of a preferred drilling contractor to conduct the first phase of exploratory drilling and downhole geophysics as required under the terms of the exploration lease,

together with completion of several hydrogeological and coal quality reports prepared by the Polish Central Mining Institute.

The first phase of verification drilling will consist of two wells. A further two wells will follow later this year. The principal aim of the drilling is to verify and consolidate Linc Energy’s understanding of the coal resource as currently understood from access to public drilling logs and records dating back some decades.

Further geological evaluation of the coal within the PWD lease area has been conducted with a report on hydrogeology and coal quality of the lease. The results will be used for the interpretation of the verification drilling data and further exploration planning across the lease.

Progress has also been made over the Quarter on additional UCG prospects in Poland with the entering into of a Letter of Intent with one of Poland’s largest state owned coal companies, KHW, regarding the evaluation of UCG commercialisation opportunities across the company’s deep coal resources utilising Linc Energy’s proprietary UCG technology. The Letter of Intent outlines the basis upon which Linc Energy will support co-operation in the assessment of UCG with discussions only now just commencing regarding the exchange of information pertaining to the coal under investigation.

Africa

The Linc Energy & Exxaro UCG Concept Study was successfully completed during the Quarter. The study teams from both organisations co-operated well to deliver the report’s scope well under budget by making optimal use of internal resources and expertise. The final Report was agreed and presented to the respective businesses with a positive result.

As part of the development of the business concept with Exxaro, the study scope was expanded to include the conversion of primary by-products i.e. nitrogen, carbon

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CLEAN ENERGY

dioxide and hydrogen from the UCG to Power and GTL complex to manufacture Urea fertilizer via ammonia (NH3) as an intermediate. Uhde Shedden in Brisbane was contracted to develop a flowsheet and mass balance, which was then integrated by the Linc Energy Engineering Team into the overall complex. The economics developed on an incremental basis showed a clear future expansion opportunity. This provides for a compelling business opportunity with power, fuel and fertilizer solutions for the same site, based on UCG, especially in developing economies.

The companies are currently in discussion to refine and agree the principles underpinning a possible commercial business model framework for progressing with the project to the next phase.

Both companies are busy with internal due diligence processes and peer reviews to evaluate the results of this early work. Follow-up site visits by Exxaro to Linc Energy’s UCG demonstration facilities in Chinchilla Australia are planned for August as part of the above process.

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COAL

Exploration activities

Queensland

Emerald

A review of divestment options for the Teresa coal asset was completed during the Quarter, including IPO, full divestment and partial divestment/joint venture opportunities. Discussions continue with interested parties across all options. The development of the Teresa project continues in parallel to the divestment process and increases the value of the asset to all parties.

The development of the Teresa mine is proceeding to plan.

The initial 91 hole drilling program commenced during the Quarter however wet weather is causing significant delays. The drilling program is designed to enable groundwater monitoring to provide the data required for the EIS as well as defining the first 11 years of planned production as a JORC Reserve. The resource definition is a requirement for participation in port and rail studies, provides further coal quality data, and allows the project to move into the Feasibility Study (FS) stage.

The drilling program required to complete FS is currently being designed.

The collection of base line environmental data for the Environmental Impact Statement (EIS) continues. The Company expects the EIS to be completed by early 2013 with the document to be submitted in Q2 2013 for government review and approval. This has been delayed from late 2012 due to the rain affected drilling program.

The Terms of Reference (TOR) was released by DEHP in March 2012 and is available for download along with the Initial Activity Statement (IAS) on DEHP’s website:

(http://www.ehp.qld.gov.au/management/impact-assessment/eis-processes/teresa_coal_project.html).

Linc Energy is well advanced in the EIS field studies including: ecology (plants and animals identification), water sampling, flood modelling, air quality, noise, traffic as required by the TOR.

The Company continues to develop the infrastructure package for the Teresa mine, including accommodation options, port and rail access and water and power supplies. Based on current development progress, the Company considers that mine construction could commence in 2014 after all necessary approvals have been granted.

Great Northern Leases (GNL)

No further drilling was completed on the Great Northern Leases for the Quarter.

South Australia

Arckaringa Basin Update

The results of the 2011 drilling and seismic programs are still being reviewed, pending development of an exploration program. No exploration drilling or seismic occurred in the Arckaringa Basin during this Quarter.

Cooper Basin Update

No work was done on PELAs 568 and 569 pending native title negotiations.

Walloway Basin Update

Walloway project is under technical review.

No further exploration activity took place

during the Quarter.

Operational activities

Tenure management Queensland

Within Queensland, Linc Energy currently holds:

26 tenements under Exploration Permits for Coal (EPCs), with a further seven under application (EPCa); two Granted Mineral Development Licences (MDL) with a further two under application (MDLa), three Mining Lease Applications (MLa) and two Petroleum Lease

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http://www.ehp.qld.gov.au/management/impact-assessment/eis-processes/teresa_coal_project.html




COAL

Applications (PLa). Granted EPCs and those areas under EPC application combine to a total of 4107 sub-blocks, covering an area of approximately 13,964km².

Total area covered under granted Mineral Development Licences (MDL) and applications (MDLa) is 432km².

Total area covered under Mining Lease Applications (MLa) is 129km² and total area covered by Petroleum Lease Applications (PLa) is 112km².

Details of Linc Energy’s Queensland tenements are contained in Annexure 1.

Dalby

The process of coordinating access to Surat Basin leases overlain by petroleum title via the Industry Consultative Committee was ongoing. No field work was undertaken during the period.

Pentland

The Company continues to market Pentland coal and provide technical and commercial detail to interested parties.

Adani Royalty

As mentioned last Quarter Linc Energy notes the progress made by India’s Adani Group in developing the Carmichael Coal tenement (formerly Galilee) for which Linc Energy is entitled to a $2 per tonne royalty (indexed to CPI) for the first 20 years of coal production.

Drilling, Mine Planning and the EIS

Adani has conducted an extensive drilling campaign, progressed with mine planning studies and started work on the EIS for both the mine and the rail.

Adani has also commenced an extensive exploration programme on the asset in order to finalise the mine plan ahead of development and construction work in 2013.

Ports

Adani has made significant progress on the infrastructure to support the development.

Adani purchased Terminal One at the Abbot Point Coal Terminal for approximately AU$1.83 billion in June 2011. In December 2011, Adani and Dudgeon Point Project Management, a subsidiary of the Brookfield Infrastructure Group, were named as the preferred proponents for the proposed Dudgeon Point Coal Terminal. This terminal, some 30 kilometres south of Mackay, will be a dedicated coal export facility adjacent to the existing Hay Point and Dalrymple Bay terminals. The proposed new terminals will provide export capacity of up to 180 million tonnes per year.

Rail

Adani is planning the construction of a 185km railway line from the proposed Carmichael mine to Moranbah. This route has been selected because it offers the most reliable options with the added flexibility to export through Dudgeon Point via the Goonyella system or through Abbot Point via the Newlands system. Importantly, Adani, subject to commercial negotiations, will also be able to access any of the proposed Galilee to Abbot Point networks once they are operational.

Land

Adani has satisfactorily resolved a majority of landowner issues and expects to resolve the remainder in 2012.

Coal Tenements - Australia

Linc Energy has commenced a review of all its coal tenements in Australia, with a view to identifying coal deposits that could potentially be used for UCG as distinct from traditionally minable coal deposits. The traditionally minable coal assets will be managed by the Company’s Coal Division.

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SAPEX

South Australia

Arckaringa Basin Update

No exploration activities were carried out in the Arckaringa Basin in this Quarter. Evaluation is underway for the necessary equipment to enable Linc Energy to run a seismic program without having to rely on 3rd party seismic survey of over 1000 line km in the Arckaringa Basin. The aim of this program is to:

Increase the level of information on the thickness and basin wide extent of the Stuart Range Formation with potential for unconventional oil deposits (shale oil).

Confirm the thickness and extent of the Stuart Range Formation within smaller troughs to the west and south of the Boorthanna Trough as indicated on older seismic in those areas.

Collect 3D seismic over areas where the prospective Stuart Range Formation has been sampled by core drilling and which has the potential to offer significant opportunities for shale oil development.

Further delineate the extent of the coals in the Boorthanna and Phillipson Troughs.

Upgrade some of the oil and gas leads and prospects previously identified to drillable targets.

Eromanga Basin Update

Native title agreements were finalised and PEL 568 and PEL 569 were granted to Linc Energy in June.

No Exploration activities were carried out in Linc Energy’s Eromanga Basin licence areas.

Walloway Basin Update

Walloway project is under technical review. No further exploration activity took place during the Quarter.

Tenure Management South Australia

Within South Australia, Linc Energy (through its wholly owned subsidiary Sapex Ltd)

currently holds 10 Petroleum Exploration Licences (PELs) and 2 Petroleum Exploration Licences Applications , 7 current Exploration Licences (ELs) and 1 Exploration Licence Application and the total combined acreage is 85,564km2. Total area held under current PELs is 67,515km2 with 17,962km2 under application and a total area held under ELs of 3,660km2 (includes 893km2 held under application).

Key tenure matters addressed in the period include the processing of a new PEL application to secure 100% of the conditional relinquished parts of PEL 117, 120, 121 and 122 over portions of the Walloway and Arckaringa Basins. Linc also completed work on native title agreement for PEL 568 and PEL 569 and these tenements were granted in June.

Details of Linc Energy’s South Australian tenements are contained in Annexure 1.

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Annexure 1: Tenement Information

Linc Energy Queensland Tenements and Applications at 30 June 2012.

Tenement Name Tenement # Location Sub-blocks Area ( km²)

Rathdowney EPC 910 40km S Ipswich - Clarence Moreton Basin 41 139

Wowan EPC 908 40km N Biloela - Biloela Basin 123 418

Galilee South EPC 1227 60km W Clermont - Drummond Basin 148 503

Pentland EPC 526 220km SW Townsville - Galilee Basin 12 41

Jambin EPC 909 25km N Biloela - Biloela/Callide Basins 118 401

Tipton Sth EPC 938 60km SW Dalby - Surat Basin 32 109

Teresa/Lucknow EPC 1226 30km N Emerald - SW Bowen Basin 58 197

Biloela EPC1248 40km N Biloela - Biloela Basin 90 306

Cloncurry Nth EPC 1525 120km NW Hughenden -Galilee/Eromanga Basin 150 510

Cloncurry Sth EPC 1526 85km NW Hughenden - Galilee/Eromanga Basins 243 826

Saxby EPC 1549 150km NW Hughenden - Galilee/Eromanga Basin 300 1020

Wilkie EPC 897 40km SE Chinchilla - Surat Basin 40 136

Wilkie EPC 898 30km SE Chinchilla - Surat Basin 50 170

Wilkie EPC 899 20km NW Dalby - Surat Basin 47 160

Teresa EPC 980 20km N Emerald - SW Bowen Basin 37 126

Tipton EPC 1770 30km SW Dalby - Surat Basin 111 377

Chinchilla West EPC 1046 20km S Chinchilla - Surat Basin 16 54

Tipton 2 EPC 902 30km S Dalby - Surat Basin 64 218

Teresa North EPC 1267 20km N Emerald - SW Bowen Basin 10 34

Wowan West EPC 1323 20km NW Wowan - Biloela Basin 30 102

Chinchilla EPC1247 15km SW Chinchilla - Surat Basin 8 27

Chinchilla EPC 635 15km S Chinchilla - Surat Basin 32 109

Dunmore EPC 1537 50km SW Dalby - Surat Basin 36 122

Lily Pond EPC 1550 130km NE Cloncurry - Galilee/Eromanga Basin 300 1020

Dingo EPC 1536 15km NW Biloela - Biloela/Callide Basins 46 156

Cloncurry Central EPC 1527 100km NW Hughenden - Galilee/Eromanga Basin 162 551

Galilee North EPCa 1228 75km NW Clermont - Drummond Basin 299 1017

Agnes EPCa 2541 90km NE Hughenden - Eromanga/Galilee Basins 300 1020

Devlin EPCa 2543 10 S Hughenden - Eromanga/Galilee Basins 300 1020

Pelican EPCa 2549 120 N Hughenden - Eromanga/Galilee Basins 300 1020

Walker EPCa 2551 7 S Hughenden - Eromanga/Galilee Basins 300 1020

Cuthbert EPCa 2552 95 N Hughenden - Eromanga/Galilee Basins 300 1020

Teresa East EPCa 2841 35km NE Emerald - Bowen Basin 4 14

TOTAL: 4107 13964

EPC 1690 sold to another company

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Tenement Name Tenement # Location hectares Area (km²)

Chinchilla MDL 309 15km S Chinchilla - Surat Basin 155 2

Tipton MDLa 371 30km SW Dalby - Surat Basin 29344 293

West Pentland MDL 361 220km SW Townsville- Galilee Basin 2711 27

Chinchilla Extended MDLa 407 15km S Chinchilla - Surat Basin 11004 110

TOTAL: 43214 432

Hopeland 1 MLa 50242 15km S Chinchilla - Surat Basin 3010 30

Teresa MLa 70405 20km N Emerald - SW Bowen Basin 6878 69

Teresa North MLa 70442 30km N Emerald - SW Bowen Basin 3040 30

TOTAL: 12928 129

Hopeland 2 PLa 284 20km S Chinchilla - Surat Basin 8 (Rentable

Units) 8

Lucknow PLa 286 30km N Emerald - SW Bowen Basin 104 (Rentable

Units) 104

TOTAL: 112 112

Note: Some tenures/applications may overlap in part or full

Note: 1 sub-block = approximately 3.4 km²

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Linc Energy South Australian Tenements at 30 June 2012

Tenement Name Tenement # Location Sub-blocks Area (sq km)

PEL117 Arckaringa Basin 6329



PEL120

Begins N Adelaide, extends N 257km ~50km W Port Augusta - St Vincent/Walloway Basins 6335





PEL 568 Eromanga Basin 3656

PEL 569 Eromanga Basin 2554

PELa 604 Arckaringa Basin 9454

PELa 606 Walloway & Stansbury Basin 8508

TOTAL: 85477

Arckaringa EL 4502 130 NE Coober Pedy - Arckaringa Basin 185

Williams Bore EL 4501 90 NE Coober Pedy - Arckaringa Basin 304

Walloway EL 4148 90km SE Port Augusta - Walloway Basin 173

Cadaree Hill EL 4272 80km NE Coober Pedy 632

Mt Andrews EL 4273 70km SW Oodnadatta 693

Orroroo EL4454 90km E Port Augusta, Orroroo Region - Walloway Basin 693

Weira Plain EL 4540 90km ENE Port Augusta, Orroroo Region - Walloway Basin 87

Mt Andrews Ela 178/11 70km SW Oodnadatta 893

TOTAL: 3660

Note: Most ELs and ELAs are also covered by Linc's PELs or PELAs

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Linc Energy Tenements at 30 June 2012 - Wyoming, Montana & North Dakota.

Lease Name County State Gross Total Gross Cum True Net Our Dev

Cum True Our Net Undev

Frank C And Clara Michels Wibaux Montana 801.3200 160.6000 0.0000 64.2940

Annabelle Emily Edsall, Ak Wibaux Montana 321.4700 0.0000 0.0000 32.1740

The Salvation Army Wibaux Montana 160.0000 160.0000 0.0000 160.0000

Carol A Burch et vir Wibaux Montana 960.0000 960.0000 0.0000 32.0000

Herbert & Alice M Michels Wibaux Montana 321.4700 160.8700 0.0000 32.1740

James P & Ruthann Zielsdor Wibaux Montana 639.7700 639.7700 0.0000 213.2609

James P & Ruthann Zielsdor Golden Valley

North Dakota

1405.6300 1405.6300 0.0000 226.0875

Dorothy Michels Stolberg Wibaux Montana 321.4700 0.0000 0.0000 32.1740

Eleanor Michels, a widow Wibaux Montana 321.4700 0.0000 0.0000 32.1740

Joann K Jablonski, a widow Wibaux Montana 161.4800 161.4800 0.0000 161.4800

Emrys Lloyd Eckre, A Singl Wibaux Montana 160.0000 160.0000 0.0000 60.0000

Frank C & Clara Michels Golden Valley

North Dakota

97.2400 97.2400 0.0000 19.4480

Dorothy Michels Stolberg Golden Valley

North Dakota

97.2400 0.0000 0.0000 19.4480

Eleanor Michels, a widow Golden Valley

North Dakota

97.2400 0.0000 0.0000 19.4480

Annabelle Emily Edsall Aka Golden Valley

North Dakota

97.2400 0.0000 0.0000 19.4480

Herbert & Alice M Michels Golden Valley

North Dakota

97.2400 0.0000 0.0000 19.4480

The Salvation Army Wibaux Montana 319.5800 319.5800 0.0000 160.0000

Sharon M Zinsli, a widow Golden Valley

North Dakota

160.0000 160.0000 0.0000 160.0000

Marion E Thompson, a widow

Wibaux Montana 640.0000 640.0000 0.0000 320.0000

John Casselman Jr Wibaux Montana 640.0000 0.0000 0.0000 13.3333

Aleta F Heckaman Golden Valley

North Dakota

259.3500 259.3500 0.0000 32.4188

Charles W & Boontuang Heck Golden Valley

North Dakota

259.3500 0.0000 0.0000 32.4188

Thomas W & Joan Y Heckaman

Golden Valley

North Dakota

259.3500 0.0000 0.0000 32.4188

Duane L & Joan M Heckaman Golden Valley

North Dakota

259.3500 0.0000 0.0000 32.4188

Rkt Trust (J M Mcclure Tte Wibaux Montana 320.0000 320.0000 0.0000 106.6667

Ernest Wojahn, A Single Ma Wibaux Montana 1040.0000 1040.0000 0.0000 60.0000

Esther E. Lloyd Wibaux Montana 160.0000 160.0000 0.0000 60.0000

Donald E Wojahn, Mmdssp Wibaux Montana 320.0000 320.0000 0.0000 1.1850

A & L Begger Trust Wibaux Montana 166.7400 166.7400 0.0000 166.7400

Continental Oil Company Converse Wyoming 89.7000 89.7000 89.7000 0.0000

Continental Oil Company Converse Wyoming 90.9600 90.9600 90.9600 0.0000

WYW 164691 Converse Wyoming 200.0000 200.0000 0.0000 200.0000



E R Mcquaid et ux Converse Wyoming 320.0000 320.0000 120.0000 200.0000

C M Kopp et ux Converse Wyoming 640.0000 640.0000 120.0000 520.0000

Iona M Campbell et vir Converse Wyoming 320.0000 320.0000 120.0000 200.0000

T R Kopp et ux Converse Wyoming 280.0000 280.0000 280.0000 0.0000




St Wy 0-02900 Converse Wyoming 600.0000 600.0000 440.0000 160.0000


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Gary Pothe Ut Ux Converse Wyoming 317.0500 317.0500 157.0500 160.0000


C E Kopp et ux Converse Wyoming 640.0000 0.0000 173.3320 40.0000


A J Kopp et ux Converse Wyoming 640.0000 0.0000 173.3332 40.0000

George A Leach Et Al Converse Wyoming 320.0000 320.0000 155.4 22.2000

USA WYW 077843 Converse Wyoming 1025.5200 1025.5200 1025.5200 0.0000


St Wy 0 7790 Converse Wyoming 959.7800 959.7800 959.7800 0.0000


Gus Engleking Et Al Converse Wyoming 320.0000 320.0000 40.0000 280.0000

Chicago & N Western Trans Converse Wyoming 17.0000 17.0000 17.0000 0.0000


H C Young Et Al Converse Wyoming 800.0000 800.0000 800.0000 0.0000


V R Ranch Converse Wyoming 1612.1600 0.0000 1074.7733 0.0000


Edward Walkinshaw et ux Converse Wyoming 80.0000 80.0000 80.0000 0.0000





WYW 172989 Natrona Wyoming 160.0000 160.0000 0.0000 160.0000









J L Goodner et ux Converse Wyoming 40.0900 40.0900 7.1962 0.0000

Ted Stewart Et Al Converse Wyoming 40.0900 0.0000 5.4763 0.0000



Leslie Gay Bolin, a widow Converse Wyoming 680.9700 680.9700 15.9200 11.1826

Miner D Crary Jr Converse Wyoming 680.9700 0.0000 20.1600 14.1609

Horace I Crary Converse Wyoming 680.9700 0.0000 20.1600 14.1609

KGN Mineral Trust (Susan) Converse Wyoming 680.9700 0.0000 6.4800 4.5517


KGN Mineral Trust (Phyllis Converse Wyoming 680.9700 0.0000 6.4800 4.5517

Arthur E Symons Converse Wyoming 680.9700 0.0000 44.8000 31.4686



KGN Mineral Tr (Mary Louis Converse Wyoming 680.9700 0.0000 16.0000 11.2388



KGN Mineral Trust(Rich Eyr Converse Wyoming 680.9700 0.0000 2.3907 1.6801

KGN Mineral Trust(D C Bram Converse Wyoming 680.9700 0.0000 2.3907 1.6801



KGN Mineral Trust(T C Davi Converse Wyoming 680.9700 0.0000 6.4800 4.5517

KGN Mineral Trust(R H Davi Converse Wyoming 680.9700 0.0000 6.4800 4.5517

KGN Mineral Trust(W H Davi Converse Wyoming 680.9700 0.0000 6.4800 4.5517

Westport Oil And Gas Co Lp Converse Wyoming 800.9700 120.0000 91.2000 91.4212

KGN Mineral Trust(R G W Ma Converse Wyoming 680.9700 0.0000 2.6903 1.8897

KGN Mineral Trust(L C Gris Converse Wyoming 800.9700 120.0000 8.5920 0.0000

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KGN Mineral Trust(D G Davi Converse Wyoming 680.9700 0.0000 11.0317 0.0000

Stephen T Crary Marital Tr Converse Wyoming 680.9700 0.0000 18.3862 0.0000

Ann Obrzut Converse Wyoming 680.9700 0.0000 15.9200 11.1826

KGN Mineral Trust(C Y Kell Converse Wyoming 680.9700 0.0000 0.0066 0.0046

The Northwest Oil Company Converse Wyoming 40.0000 40.0000 40.0000 0.0000






Carolyn L Ridley Et Al Converse Wyoming 680.9700 0.0000 28.6400 0.0000


Westport Oil And Gas Co Converse Wyoming 40.0000 40.0000 5.0000 0.0000

KGN Mineral Trust Dt 9/9/9 Converse Wyoming 40.0000 0.0000 35.0000 0.0000

J L Goodner Et Al Converse Wyoming 197.3200 197.3200 105.7772 0.0000

Clydem Watts Et Al Converse Wyoming 157.3200 0.0000 15.4206 0.0000

James C Tvaruzek et ux Converse Wyoming 197.3200 0.0000 73.0084 0.0000



Fred Walkinshaw Et Al Converse Wyoming 76.5900 76.5900 75.0741 0.0000

Charles B Olin Et Al Converse Wyoming 938.4100 938.4100 834.5590 87.0000

Minnie O Moffett Converse Wyoming 165.0000 165.0000 161.7135 0.0000

Pamela Dugan Converse Wyoming 680.9700 0.0000 2.4800 1.7420

Willilam Barber Converse Wyoming 90.3200 90.3200 67.2931 0.0000

Fenex Oil Company, Et Al Converse Wyoming 160.0000 160.0000 160.0000 0.0000

S M Anderson Et Al Converse Wyoming 447.7200 447.7200 204.4081 178.6995

C Leonard Smith Estate Converse Wyoming 410.1400 410.1400 4.7850 0.0000

Lincoln Petroleum Company Converse Wyoming 447.7200 0.0000 55.9650 0.0000

WYW 0-000610 Converse Wyoming 160.0000 160.0000 160.0000 0.0000

Glenrock Sheep Company Converse Wyoming 200.0000 200.0000 200.0000



Susanne B Brubaker Converse Wyoming 120.0000 120.0000 120.0000 0.0000

Susanne B Brubaker Converse Wyoming 40.0000 40.0000 40.0000 0.0000

George W Kelly Et Al Converse Wyoming 1612.1600 1612.1600 537.3867 0.0000

Chris Eyre Converse Wyoming 680.9700 0.0000 4.0708 0.0000

KGN Mineral Trust(M S Yerk Converse Wyoming 680.9700 0.0000 12.2200 0.0000

KGN Mineral Trust(S Stroug Converse Wyoming 680.9700 0.0000 12.2200 0.0000

KGN Mineral Trust(G H Ande Converse Wyoming 680.9700 0.0000 12.2200 0.0000

KGN Mineral Trust(W C Vale Converse Wyoming 680.9700 0.0000 12.2200 0.0000

KGN Mineral Trust(J K Carr Converse Wyoming 680.9700 0.0000 0.0112 0.0000

Thomas L. Christinck Campbell Wyoming 371.7700 7.0700 0.0000 20.7454

Margaret A Bath Campbell Wyoming 371.7700 0.0000 0.0000 15.0196

State of Wyoming No 0-4115 Campbell Wyoming 1280.0000 1280.0000 0.0000 640.0000

State of Wyoming No. 0-41 Johnson Wyoming 1280.0000 1280.0000 0.0000 1280.0000

State of Wyoming No. 0-41 Johnson Wyoming 1120.0000 1120.0000 0.0000 1120.0000

State of Wyoming No 42164 Sheridan Wyoming 1280.0000 1280.0000 0.0000 1280.0000


State of Wyoming No 41100 Johnson Wyoming 1280.0000 1280.0000 0.0000 1280.0000



State of Wyoming 41104 Johnson Wyoming 1280.0000 1280.0000 0.0000 1280.0000






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State of Wyoming 41112 Johnson Wyoming 1280.0000 1280.0000 0.0000 1280.0000








State of Wyoming No 41120 Campbell Wyoming 1280.0000 1280.0000 0.0000 1280.0000























State of Wyoming No 41146- Campbell Wyoming 640.0000 640.0000 0.0000 640.0000























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State of Wyoming No 42719 Converse Wyoming 640.0000 640.0000 0.0000 640.0000




























State of Wyoming No 42799 Carbon Wyoming 640.0000 640.0000 0.0000 640.0000

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State of Wyoming 42810 Carbon Wyoming 640.0000 640.0000 0.0000 640.0000



State of Wyoming 42813 Sweetwater Wyoming 640.0000 640.0000 0.0000 640.0000


State of Wyoming No 42811 Lincoln Wyoming 640.0000 640.0000 0.0000 640.0000

TOTALS: 254396.51 228607.47 19895.03 202,318.17

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Linc Energy Tenements at 30 June 2012 - Alaska.

Lease Name County State TOTAL (acres)

TOTAL (km²)

State Of Alaska ADL 390588 Matanuska-Susitna Borough Alaska 4,630.66 18.7357

State Of Alaska ADL 390591 A Matanuska-Susitna Borough Alaska 5,616.55 22.7246

State Of Alaska ADL 390590 A Matanuska-Susitna Borough Alaska 5,543.97 22.4309










State Of Alaska ADL 390583 Matanuska-Susitna Borough Alaska 771.32 3.1208



AK Mental Health Trust Matanuska-Susitna Borough Alaska 1,569.69 6.3523

MHT 9300061

Linc Energy (Alaska) Inc Matanuska-Susitna Borough Alaska 10 0.0405

State Of Alaska ADL 390558 Kenai Peninsula Borough Alaska 5,760.00 23.305






State Of Alaska ADL 390574 Matanuska-Susitna Borough Alaska 516.89 2.0913






AK Mental Health Trust Denali & Fairbanks N.Star Borough Alaska 60,265.12 243.8843

MHT 9400434

AK Mental Health Trust Kenai Penninsula Borough Alaska 82,122.70 332.3388

MHT 9200462

AK Mental Health Trust Matanuska-Susitna Borough Alaska 25,374.88 102.6885

MHT 9200461

State Of Alaska ADL 390720 North Slope Borough Alaska 907.46 3.6724

State Of Alaska ADL 390884 North Slope Borough Alaska 807.48 3.2678

AA 084141 (Bureau of Land Mgmt) North Slope Borough Alaska 11500 46.5388

AA 081726 (Bureau of Land Mgmt) North Slope Borough Alaska 6133 24.8194

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Linc Energy Tenements at 30 June 2012 – Texas & Louisiana.

Lease Name County State Gross Acres

Net Acres

State Tract 126 Chambers TX 640 640


E.W. Barber "D" (Samson) Chambers TX 25 25

A.E. Barber Chambers TX 73 73

L.E. Fitzerald Unit Chambers TX 47.5 47.5

Kirby "A" Chambers TX 73 73

Kirby "B" Chambers TX 107.45 107.45

Kirby "C" Chambers TX 30 30

Kirby Petroleum Company (Samson) Lease Chambers TX 49.5 49.5

O.K. Winfree Chambers TX 43 43

Gulf Fee "C" 64 Chambers TX 60.26 60.26

Gulf Fee Fisher Chambers TX 23.5 23.5

Kirby Petroleum Company 15 Acres Chambers TX 15 15

J. Wilburn Chambers TX 65 65

J.F. Wilburn "B" Chambers TX 50 50

Wilburn "C" #9 And #10 Wilburn "D" Wilburn "E" Chambers TX 93.95 93.95

Wilburn, J. "A" Chambers TX 52.5 52.5

Z.T. Wilburn Fee Chambers TX 20.2 20.2

Higgins Chambers TX 16.57 16.57

Higgins-B- Chambers TX 7.05 7.05

Chambers County Agricultural Company Chambers TX 205.1 205.1

Chambers County Agricultural Company Chambers TX 50 50

Zadie Fisher Chambers TX 17.836 17.836

Smith, J.H. Chambers TX 20 20

Winfree, O.K. Chambers . 14 14

Fitzgerald, J.M. ("A") Chambers TX 51.44 51.44

Jones, Lyle Chambers TX 21.93 21.93

Lula Barber Chambers TX 33 33

Woodward Chambers TX 20 20

Winfree, E.H. Chambers TX 41.129 41.129

Gulf Fee Monongahela Chambers TX 17.2 17.2

H.L. Phillips Fee Chambers TX 5 5




State Tract 128-Marlin Chambers TX 280 280

Strip Leases Lots 3 Chambers TX 4.485 4.485

Strip Leases Lots 5 Chambers TX 4.427 4.427

Mound Company, Robert A.Welch, Ima Hogg Brazoria TX 2500 2500

The State Of Texas-Lease No. M-71950, M-97186, M-99176

Calhoun TX 640 640

Harrell "C" Lease Harris TX 1 1

Rena Berry Fee Harris TX 2.503 2.503

Tabb "A" , "B" , W.Tabb "A" Harris TX 14.63 14.63

W.H. Stark, James V.Polk, James V.Polk, Henry J. Kuhn Orange TX 3809.51 3809.51

Armelin L. Fee, Baldwin J.C.Fee, Failor E.K. Fee, Hannah D. Lease, Hannah D. Fee Lease, Partlow-Hodnett

Liberty TX 35 35

Marie Howell Cade Galveston TX 10 2.5

Beverly Hodges Davis Galveston TX 10 0.625

Roy Hamilton Davis, Indv. & Aif Galveston TX 10 0.625

Frances Henshaw Gill Galveston TX 10 0.005028

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Net Acres

Ashbel Burnham Henshaw Galveston TX 10 1.04167

Linda Jean L. Henshaw, et al Galveston TX 10 1.25

Thomas R. Howell, Indv. & Trustee Galveston TX 10 2.5

Mary Henshaw Jernigan Galveston TX 10 0.005028

James Odom & Folly Family LLC Galveston TX 10 1.25

Barbara Henshaw Roberts Galveston TX 10 0.005028

Linda Henshaw Weeks Galveston TX 10 0.005028

Amoco Production Company Galveston TX 10 9.56

Blair Lea Ellis Galveston TX 10 0.002991

D. Caffery Mccay, et al Galveston TX 10 0.15549

Maryann Ellis Bohr Galveston TX 10 0.002991

Lloyd Addison Ellis, Iii Galveston TX 10 0.002991

Charles Barker Galveston TX 20 1.319444

Robert Barker Galveston TX 20 1.319444

Melanie Wiggins Galveston TX 20 0.79861

T.C. Craighead & Company Galveston TX 20 0.79861

David Speer Galveston TX 20 0.79861

Charles Barker Trust Galveston TX 20 0.79861

Melanie Wiggins Trust Galveston TX 20 0.208333

Betty Taylor Trust Galveston TX 20 0.208333

Margaret Carter Trust Galveston TX 20 0.104167

David Speer Trust Galveston TX 20 0.104167

Katherine Taylor Miller Galveston TX 20 0.104167

Ruth McLean Bowers Galveston TX 20 3.333333

Marie Howell Cade Galveston TX 10 2.5

Beverly Hodges Davis Galveston TX 10 0.625

Roy Hamilton Davis, Indv. & Aif Galveston TX 10 0.625

Frances Henshaw Gill Galveston TX 10 0.005028

Ashbel Burnham Henshaw Galveston TX 10 1.04167

Linda Jean L. Henshaw, et al Galveston TX 10 1.25

Thomas R. Howell, Indv. & Trustee Galveston TX 10 2.5

Mary Henshaw Jernigan Galveston TX 10 0.005028

James Odom & Folly Family LLC Galveston TX 10 1.25

Barbara Henshaw Roberts Galveston TX 10 0.005028

Linda Henshaw Weeks Galveston TX 10 0.005028

D. Caffery McCay, et al Galveston TX 10 8.73975

Maryann Ellis Bohr Galveston TX 10 0.16315

Blair Lea Ellis Galveston TX 10 0.16315

Lloyd Addison Ellis, III Galveston TX 10 0.16315

Marion Caffery Campbell, Trustee Galveston TX 10 0.7708

Charles Barker Galveston TX 20 2.6388

Robert Barker Galveston TX 20 2.6388

T.C. Craighead & Company Galveston TX 20 3.19444

Katherine C. Holt Trust Galveston TX 20 1.666666

David T. Speer Galveston TX 20 1.59724

Betty Speer Taylor Galveston TX 20 1.59724

Ruth Mclean Bowers Galveston TX 20 6.666667

BP America Production Co. Galveston TX 126.51 126.51

Ruth Mclean Bowers Galveston TX 50 50

Barbara Gordon McNeill & Melinda Gordon Paret Galveston TX 50 50

George E Smith Galveston TX 88.28 88.28

George E Smith Galveston TX 96.48 96.48

Verna Hooks Mclean & Ruth Mclean Bowman Galveston TX 2.48 2.48

Nellie B. League et al Galveston TX 24.83 24.83

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Net Acres

Virginia B. Ball Estate By American National Trust & Robert B. Ball

Galveston TX 9 9

Wells Stewart Galveston TX 9 9

Stewart Mineral Company Galveston TX 9 9

Robert George Bisbey, Trustee Galveston TX 9 9

Charlotte E. Smith Galveston TX 253 253

Elizabeth Ker Cade, et al Galveston TX 50.86 50.86

BP America Production Co. Galveston TX 35.49 35.49

Gulf & Interstate Railway Company Of Texas . TX 19.3 19.3

The Estate Of Shearn Moody, Jr. Galveston TX 40 40

Robert L. Moody Galveston TX 10 10

Robert L. Moody Galveston TX 10 10

Casey Stehling Independent Executor Of The Estate Of Edward Jakovich

Galveston TX 40 40

Donna Cameron Goode Linda Jakovich Meyer Independent Executor Of The Estate Of Andrew Jakovich

Galveston TX 40 40

DJS Land Company, Ltd Galveston TX 40 40

Carol Ann Burns Galveston TX 40 40

JB Watkins Cameron LA 2435 2435

Constantine #2 Leeville LA 100 100

Constantine #1 Leeville LA 52.09 52.09

Barrow, R.R. Leeville LA 40 40

Ll&E #290 Leeville LA 70 70

Totals 14180.23371 14180.234

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Appendix 5B Mining exploration entity quarterly report

+ See chapter 19 for defined terms. 17/12/2010 Appendix 5B Page 1

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10

Name of entity

Linc Energy Ltd

ABN Quarter ended (“current quarter”)

60 076 157 045 30 June 2012

Consolidated statement of cash flows

Cash flows related to operating activities

Current quarter $A’000

Year to date (12 months) $A’000

1.1 Receipts from product sales and related debtors

15,538 47,796

1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration

(6,627) (17,225) (3,059)

(15,586)

(33,879) (62,900) (14,988) (66,266)

1.3 Dividends received - - 1.4 Interest and other items of a similar nature

received 421

3,835

1.5 Interest and other costs of finance paid (2,654) (10,086) 1.6 Income taxes paid 48 (9,51) 1.7 Other (provide details if material) (1,667) (3,634)

Net Operating Cash Flows

(30,811) (149,556)

Cash flows related to investing activities

1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets

- -

(3,136)

(299,361) (1,804) (8,591)

1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets

- -

22

- -

22 1.10 Loans to other entities - - 1.11 Loans repaid by other entities - - 1.12 Other (cash security for guarantees, loan to

director) 1,618 (3,658)

Net investing cash flows

(4,732) (313,392)

1.13 Total operating and investing cash flows (carried forward)

(35,543) (462,948)

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+ See chapter 19 for defined terms. Appendix 5B Page 2 17/12/2010

1.13 Total operating and investing cash flows (brought forward)

(35,543) (462,948)

Cash flows related to financing activities

1.14 Proceeds from issues of shares, options, etc. - 2,133 1.15 Proceeds from sale of forfeited shares - - 1.16 Proceeds from borrowings 30,000 191,433 1.17 Repayment of borrowings (255) (3,080) 1.18 Dividends paid - - 1.19 Other (payment for share buy-back) - (12,093)

Net financing cash flows

29,745 178,393

Net increase (decrease) in cash held

(5,798)

(284,555)

1.20 Cash at beginning of quarter/year to date 32,084 310,343 1.21 Exchange rate adjustments to item 1.20 826 1,324

1.22 Cash at end of quarter 27,112 27,112

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

Current quarter $A'000

1.23

Aggregate amount of payments to the parties included in item 1.2 547

1.24

Aggregate amount of loans to the parties included in item 1.10 -

1.25

Explanation necessary for an understanding of the transactions

Executive Directors Fees = $377,543

Non Executive Directors Fees = $46,704

Payments to Directors related parties = $123,014

Non-cash financing and investing activities

2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

N/A

2.2 Details of outlays made by other entities to establish or increase their share in projects in

which the reporting entity has an interest

N/A

Financing facilities available

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Add notes as necessary for an understanding of the position.

Amount available $A’000

Amount used $A’000

3.1 Loan facilities *

247,965 187,965

3.2 Credit standby arrangements

3,365 2,970

* As at 30 June 12 the Group had a Reserve Based Lending facility with a credit limit of

US$300,000,000. The amount available for drawdown under the facility is determined based upon the current level of proved developed producing reserves (PDP’s) and the oil price. At 30 June 12 the Group had utilised US$131,000,000 of the facility out of an available US$131,000,000. In addition to the above, Linc Energy also had access to a $120,000,000 corporate line of credit facility which can be drawn at any time. There are no restrictions on the availability and use of funds under this facility. At 30 June 12 the Group had drawn down $60,000,000.

Estimated cash outflows for next quarter

$A’000

4.1 Exploration and evaluation

10,600

4.2 Development

23,400

4.3 Production

5,300

4.4 Administration

18,000

Total

57,300

Reconciliation of cash

Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.

Current quarter $A’000

Previous quarter $A’000

5.1 Cash on hand and at bank 27,022 31,995

5.2 Deposits at call 90 89

5.3 Bank overdraft - -

5.4 Other - -

Total: cash at end of quarter (item 1.22) 27,112 32,084

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+ See chapter 19 for defined terms. Appendix 5B Page 4 17/12/2010

Changes in interests in mining tenements Tenement

reference Nature of interest (note (2))

Interest at beginning of quarter

Interest at end of quarter

6.1 Interests in mining tenements relinquished, reduced or lapsed

6.2 Interests in mining tenements acquired or increased

Issued and quoted securities at end of current quarter Description includes rate of interest and any redemption or conversion rights together with prices and dates.

Total number Number quoted Issue price per security (see note 3) (cents)

Amount paid up per security (see note 3) (cents)

7.1 Preference +securities (description)

Nil

7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions

7.3 +Ordinary securities

509,952,685 509,952,685

7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs

(a) 460,741

(b) Nil

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7.5 +Convertible debt securities (description)

Nil

7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted

7.7 Options (description and conversion factor)

(a) Options 16,621,827 (b) Rights 9,526,342

Exercise price (a) Various

(b) Nil

Expiry date (a) Various

(b) Various

7.8 Issued during quarter

(a) Nil (b) 583,984

7.9 Exercised during quarter

(a) Nil (b) 871,098

7.10 Expired during quarter

(a) 25,000 (b) 460,721

7.11 Debentures (totals only)

Nil

7.12 Unsecured notes (totals only)

Nil

Compliance statement 1 This statement has been prepared under accounting policies which comply with

accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 5).

2 This statement does give a true and fair view of the matters disclosed.

Sign here: ............................................................ Date: ..31 July 2012.

(Company secretary) Print name: Brook Adrian Burke.

== == == == ==

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