Linc Energy Ltd., an Australian company planning acquisitions of U.S. oil assets, rose the most in seven weeks in Sydney trading after saying it found a “significant” oil shale deposit in South Australia.
Linc climbed as much as 13 percent to A$1.90, the most since Aug. 10, while the benchmark S&P/ASX 200 Index gained 3.2 percent. The shares traded at A$1.895 at 3:49 p.m. Sydney time.
The Brisbane-based company is exploring for oil and gas in the Arckaringa Basin, where it plans to spend at least A$10 million ($9.86 million) on drilling next year after investing the same amount so far this year, said Craig Ricato, legal and corporate affairs director at Linc. The oil shale deposit was discovered within the Stuart Range Formation in the region.
“It’s early days,” Ricato said in a phone interview today. “We need to define this resource. We’ve got at least a year or two of detailed exploration and definition work.”
Linc has completed three oil and gas wells out of a planned 10-well drilling campaign in the basin, he said. The South Australian oil shale deposit is about 124 meters (407 feet) thick and was intersected at a depth of more than 854 meters, Linc said in a statement today.
“It is a remarkable prospect that we have only just begun to properly explore,” Peter Bond, the company’s chief executive officer, said in the statement.
The energy company, which also converts coal into liquid fuels, aims to sign an agreement to sell its Teresa coal project in Queensland state by the end of this year, Ricato said. Linc is in the final stages of talks with groups from India and China to sell the asset, Bond said Aug. 8.
Linc plans to complete talks in the next month with ERG Resources LLC to acquire oilfields in Texas and Louisiana, Ricato said. While Linc announced in July that a $236 million purchase of 14 oilfields from ERG had been scrapped, it said last month that discussions are still on to complete a deal.
Linc said in June it may spend as much as A$800 million on U.S. purchases.