Linc Energy Ltd. (LNC), an Australian company that bought oilfields in Texas from ERG Resources LLC, said it is studying two or three more deals in the Gulf coast region and may spend about $500 million on a single transaction.
“The Australian dollar is still strong, making it attractive,” Chief Executive Officer Peter Bond said in a telephone interview today from Brisbane after Linc completed the $236 million acquisition of 13 oilfields from ERG.
Linc aims to double production at the ERG fields in Texas and Louisiana within two years to more than 6,000 barrels of oil equivalent a day, Bond said. The company may add as much as 6,000 barrels a day of crude output with another Gulf area purchase, he said, without identifying the asset.
The company plans to expand its oil business in the U.S. as it seeks to take advantage of a strong Australian dollar and “potential upside from medium- to long-term oil pricing,” Linc said in a statement today announcing the ERG transaction.
The Australian dollar rose to a three-week high today, gaining as much as 0.7 percent to $1.0233, after a report showed the nation’s unemployment rate fell last month for the first time since March as employers added more workers than forecast.
Linc advanced 1.5 percent to close at A$2.10 in Sydney, compared with the 1 percent gain in the benchmark S&P/ASX 200 Index.
The company, which also converts coal into liquid fuels, has narrowed the discussions to sell its Teresa coal project in Queensland to two bidders, Bond said, declining to be more specific. Linc is seeking to reach an agreement on the sale within the “next few weeks,” he said.
The company is also exploring for oil and gas in the Arckaringa Basin in South Australia and said last month it discovered a “significant” shale-oil deposit in the region.
To contact the reporter on this story: James Paton in Sydney at firstname.lastname@example.org
To contact the editor responsible for this story: Amit Prakash at email@example.com