LINC ENERGY LTD // 2009 ANNUAL REPORT

LINC ENERGY LTD // 2009 ANNUAL REPORT
ABN 60 076 157 045
1

A
PROFITAB
FUTURE
UCG to GTL technologies unlock stranded
energy in Australia and other coal rich
nations, providing greater energy security
and alternate supplies of high quality,
cleaner liquid transport fuels.
About Linc Energy
Linc Energy is an innovative, forward-thinking company developing a significant energy business based on the
production of cleaner energy solutions.
Linc Energy has successfully combined two known technologies, Underground Coal Gasification (UCG) and Gas to
Liquids (GTL) and has demonstrated its vision of being a leading supplier of a new source of cleaner liquid transport
fuels for the future.
UCG technology provides access to coal, deep underground and by in-situ gasification produces a high quality
synthesis gas (syngas) containing carbon monoxide and hydrogen. Aboveground, in the GTL process, syngas is
processed via Fischer-Tropsch technology to produce high quality, sulphur free synthetic hydrocarbons.
Linc Energy plans to combine its UCG and GTL technologies commercially at sites in Australia and around the globe
as it realises its vision of becoming the world’s leader in providing cleaner synthetic diesel and jet fuels
from stranded coal resources.
UCG produced syngas can also be used as a feedstock to generate gas turbine combined cycle power, resulting in
reduced greenhouse gas emissions.
With significant coal deposits suitable for UCG technology, Linc Energy can provide alternative sources of liquid
fuels and power generation well into the foreseeable future.
Linc Energy represents a new future for liquid fuels production and high efficiency energy generation.
This Annual Report is printed on 100% post consumer waste.

A
ADING
TECHNOLOGY
The path towards commercialisation
is underway as Linc Energy achieved
the world-first production of liquid
hydrocarbons from its combined UCG
to GTL technologies in October 2008.

A
REMARKAB
INDUSTRY
With proven, combined UCG to GTL
technologies, Linc Energy has a vision
to provide new, environmentally superior
energy solutions for Australia and other
countries around the world.

A
SUSTAINAB
ENERGY
The Chinchilla Demonstration Facility is
a world-class showcase of Linc Energy’s
vision to provide cleaner energy solutions.

A
PEOP
FOCUS
Linc Energy employees are experts in
their field, passionate and committed.
With these skills and values, Linc Energy
is set to become the leader in combined
UCG to GTL technologies.

CONTENTS
01 Chairman’s Message 14
02 Managing Director’s Report 16
03 Establishing Global Locations 24
04 Review of Operations and Activities 26
05 Leadership Team 36
06 Directors’ Report 42
07 Corporate Governance Statement 58
08 Auditor’s Independence Declaration 68
09 Financial Report 70
Notes to the Financial Statements 76
Directors’ Declaration 120
10 Audit Report 121
11 Shareholders Information 123
12 Mining Tenements 125
13 Glossary & Corporate Directory 126

01
CHAIRMAN’S
MESSAGE
To our shareholders,
On behalf of your Board, I am pleased to report that
the 2008–2009 financial year has been a period of
achievement for Linc Energy and its shareholders,
business partners and stakeholders. It has been a
year of considerable milestones for the development
of our company, our technology and the shared vision
to provide new, environmentally superior energy
solutions for Australia and other countries across
the world. I thank you for your support and I am
pleased that the vision of an Underground Coal
Gasification (UCG) to Gas to Liquids (GTL) industry
is closer to being realised.
For Linc Energy, a profitable future lies ahead.
The past year was volatile and unpredictable, yet
one strong message remains: Linc Energy has a clear
vision to provide energy from coal using its UCG and
GTL technologies. Accessing coal deep underground
is Linc Energy’s unique competitive advantage. Coal
suitable for UCG is inaccessible by conventional mining
methods. UCG technology can provide an innovative,
new energy source that will emerge to help satisfy
growing global energy demands in an environment
where oil and other commodity prices are volatile
and continue to rise. Energy security for nations such
as Australia, where a reliance on imported oil and oil
products exists, is paramount. Linc Energy has led
the way for greater national energy security by proving
that coal, from deep underground, can be successfully
gasified and used as a feedstock in the GTL process for
the production of liquid hydrocarbons. Obtaining liquid
hydrocarbons is a precursory step for the production
of fuels such as diesel and jet fuel. Not only is the
combination of UCG and GTL technologies economically
sound, it can be environmentally responsible as well.
As a relatively young company leading an up-and-coming
UCG to GTL industry, Linc Energy has a great deal to be
proud of. Linc Energy added to its already talented and
committed executive management team with the addition
of strategic roles including Commercial Manager, and
GTL and UCG General Managers. Introducing such
roles emphasises the commitment to its vision and to
become the world leader in UCG to GTL technology.
The wider Linc Energy team has also grown, with
additional specialist technology roles and a greater
systems and support network. Staff numbers are
now well over 100 employees.
Alongside growth in employee numbers and experience,
Linc Energy has also executed a significant drilling and
exploration program to prove up resources within its
tenements. This drilling and exploration program has
resulted in resources being defined (in accordance with
the JORC Code) in Chinchilla, Dalby, Emerald, Galilee
and Pentland in Queensland. Where these coal assets
are not suitable for UCG, Linc Energy has taken
appropriate steps for their divestment, engaging the
UBS Investment Bank to manage the sales process.
This divestment strategy will provide positive results
for shareholders and a solid platform for Linc Energy
to build its UCG to GTL commercial operations.
Delivering a world-first
One of the most rewarding milestones in the history of Linc
Energy to date is the completion and commissioning of the
UCG to GTL pilot plant at the Chinchilla Demonstration Facility.
In this rural location, Linc Energy has proven, for the first time
in the world, that UCG synthesis gas is a suitable feedstock for
the GTL process. The first liquid hydrocarbons or syncrude
was produced from combined UCG to GTL technologies on 14
October 2008. Six months later, it was my pleasure to welcome
the Federal Minister for Resources and Energy, the Honourable
Martin Ferguson AM MP to officially open the Chinchilla
Demonstration Facility.
Combined UCG to GTL operations at the Chinchilla
Demonstration Facility have enabled the technical teams
to further refine Linc Energy’s production processes in the
lead up to developing its first commercial operation.
National and global expansion
During February 2009, the Queensland Government
announced a policy to halt Underground Coal Gasification
commercial developments in the state until further scientific
analysis could be conducted. Findings from these studies are
expected to be released around 2011 or 2012. The Chinchilla
Demonstration Facility continues to operate in demonstration
mode under its Mineral Development Licence. The facility
will remain a source of competitive advantage as Linc Energy
continues to refine and validate its technical capability.
Linc Energy demonstrated commercial foresight in its merger
with South Australian petroleum and oil explorer, SAPEX
Limited. The acquisition of SAPEX, completed on 15 October
2008, has provided Linc Energy with access to vast areas of
coal tenements in the Arckaringa and St Vincent Basins in
South Australia. A drilling and exploration program is underway
in these areas to validate original data and determine suitable
locations for Linc Energy’s commercial development phase.
Linc Energy took its first steps into other potentially suitable
UCG locations during the year. Countries such as the United
States and Vietnam have high energy demands, yet are reliant
on imported energy sources and are facing even higher energy
demands in the future.
In April 2009, Linc Energy signed a business cooperation
contract with VINACOMIN (the Vietnam National Coal
and Mineral Industries Group) and Marubeni Corporation
(a Japanese company) to start the Tonkin Project, a trial
UCG project in the Red River Delta, about 60 kilometres
south-east of Hanoi. In May 2009, Linc Energy also signed
a purchase agreement with GasTech Inc for over 92,000
acres of Powder River Basin coal tenements in Wyoming,
USA. That purchase acquisition is now complete. The
Yerostigaz operations in Uzbekistan continue to produce
solid UCG synthesis gas results, providing Linc Energy
with exclusive access to confidential UCG technological
information. The UCG synthesis gas provided is the
feedstock for the nearby Angren Power Station.
Towards commercialisation
The Linc Energy team is clearly focused on the
commercialisation of its UCG to GTL technologies for
the production of cleaner, economic energy solutions.
Combined UCG to GTL was successfully demonstrated
for the first time in the world at the Chinchilla Demonstration
Facility. Work will progress to plan the development of
Linc Energy’s first commercial UCG to GTL operation.
I would like to thank my fellow Board members, Mr
Ken Dark and Mr Peter Bond for their contribution over
the past financial year. Thank you also to the executive
management team for their dedication and for supporting
Linc Energy’s vision. To all Linc Energy staff, thank you for
your commitment and passion for this developing industry.
It is wonderful to see Linc Energy supported by so many
talented individuals. The year ahead is expected to be
especially successful.
Yours sincerely
Brian Johnson
Chairman
14 15

02MANAGING
DIRECTOR’S
REPORT
Dear shareholders,
The last year has been both a challenging and a
rewarding one for Linc Energy. The global financial
crisis has also impacted in a profound way on the global
commodity markets and in particular the confidence
of the business community. Who could have predicted
all of this would have happened just as Linc Energy
was ’hitting its straps’ both in terms of share price and
its achievements via the world-first production of liquids
from our UCG to GTL facility at Chinchilla. In addition
we were also in the middle of the completion of the
merger and acquisition of SAPEX, had just begun
finalising the sale of the Theresa coal asset to China
and were negotiating the purchase of coal acreage
in Wyoming.
Linc Energy was well placed to survive the crisis but few
companies, if any, were immune to the impacts of it!
The positive news is that we have recently seen general
improvements in the share market as well as in the oil
and coal markets. The share market is now up over 40
per cent from the lows of 2008 and we have seen oil
trading above the $70 range for several months.
Importantly for Linc Energy, the energy and coal market
has rebounded much faster than most imagined would
occur, and this indicates that the markets are returning
to some normality with much greater stability and
predictability, which allows Linc Energy to get on
with its plans for 2010 and beyond.
Even though the macroeconomics of the last year
have been difficult and uncertain, Linc Energy has taken
great steps forward. When other companies have been
reducing their work force, we have increased staff; whilst
other companies cut programs and systems, Linc Energy
has consolidated and reinforced ours. The measures
we have taken ensure our ability to manage our
current and future growth.
During the last year we have been heavily focused on
placing the Company in a position of strength and
stability, with the ability to maximise growth from a solid
foundation. The strategic focus of acquiring more coal
acreage in key positions around Australia and the globe
ensures Linc Energy is positioned to aggressively pursue
expansion and growth and its goal of commercialising
UCG and GTL over the coming year. The reasons why
Linc Energy has pursued greater and greater acreage
positions in key locations will become quite evident
over the coming 12 to 24 months, and this trend
of securing more coal and gas tenements in key
locations will continue for the foreseeable future.
The results of our recent drilling program in the Galilee
Basin have exceeded our expectations and provided
a significant increase in the Company’s coal deposit
exploration target in accordance with the JORC Code 1 .
We have seen the original exploration target upgraded
from 3.0–3.4 billion tonnes to 5.0–5.5 billion tonnes 1
in accordance with the JORC Code 2 . We had known
for some time that our coal tenement in the Galilee
Basin was ’special’ and represented a fantastic
opportunity with significant potential to host a large,
long-life, low cost, open cut coal mine. Our drilling
program is now confirming that Linc Energy does
have a world-class coal asset in the Galilee.
The value of this asset will continue to increase as Linc
Energy accelerates its exploration work so that we
can fully comprehend the coal deposit in the shortest
possible time. I have been in and around coal for most
of my adult life and I can say that the Galilee Basin
appears to me to be one amongst a handful of the best
emerging thermal coal assets in the world, and as such
it deserves to be drilled out and explored appropriately
and fully, to ensure full value is unlocked and, in a
nutshell, that is Linc Energy’s intention.
Over the last year we have continued to drill our coal
tenements in Biloela, Pentland, the Surat Basin, the
Walloway Basin (South Australia), the Arckaringa Basin
(South Australia) and of course the Galilee Basin.
This extensive drilling program was one of the largest
undertaken by any company in Australia and we are
getting some outstanding results from that program.
The production of the first liquids at Chinchilla was a
significant milestone, not just for Linc Energy but also
for the global community. Linc Energy has now proven
that it can produce liquid fuels from UCG gas. This
process provides the potential for billions of metric
tonnes of stranded coal resources to be converted
into transport fuels in a more environmentally sensitive
manner. No other company in the world has done this
and when you think that each tonne of coal equates to
approximately 1.0 to 1.5 barrels of diesel or jet A1 fuel,
the potential of what Linc Energy has already achieved
is simply enormous. It has set Linc Energy up for the
future. Now we can pursue our commercial goals of
UCG to GTL and UCG to Power, in a focused manner
from a unique and proven technical base.
Our Chinchilla facility is a source of great competitive
advantage for Linc Energy. It is the only facility of its
kind in the world. It provides us with a unique research
and development capability as we prepare for the
commercialisation of both UCG to GTL and UCG to
Power technologies in locations in Australia and across
the globe. We all understand that the world is moving
toward the adoption of emerging cleaner energy
technologies. This trend highlights the importance
of the emerging clean coal sector, as countries that are
coal-rich but reliant on imported oil and gas such as
India, China, Vietnam, the United States, parts of Europe
and Australia need answers to the energy question.
1 In accordance with the requirements of clause 18 of the JORC Code regarding exploration, the following compulsory statement concerning exploration
targets is included: “The potential quantity and quality is conceptual in nature, there has been insufficient exploration to define a Mineral Resource
and it is uncertain if further exploration will result in the determination of a Mineral Resource.”
2 The information in this report relating to exploration results and coal resources is based on information compiled by Troy Turner, who is a member of the
Australian Institute of Mining and Metallurgy and who is employed by Xenith Consulting Pty Ltd. Troy Turner has sufficient experience which is relevant to
the style of mineralization and type of deposit under consideration and to the activity which they are undertaking to qualify as a competent person as defined
in the 2004 Edition of the “Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves”. Troy Turner consents to the inclusion
in this report of the matters based on their information in the form and context in which it appears.
16 17

02 MANAGING
DIRECTOR’S
REPORT
CONTINUED
Concept design for
20,000 bpd GTL facility
We have appointed Aker Solutions (formerly known as
Aker Kvaerner) to jointly develop the conceptual design
of Linc Energy’s proposed 20,000 barrels per day (bpd)
commercial GTL facility that is planned to be based in
South Australia. Aker Solutions through its subsidiaries
and affiliates, is a leading global provider of engineering
and construction services, technology products and
integrated solutions, with operations in 30 countries.
As a result of concluding this agreement, Aker Solutions
will bring its global resources and process engineering
capability together with Linc Energy’s own technology,
know-how and people to form a strong relationship capable
of further refining and improving Linc Energy’s GTL
technology in order to accelerate its commercialisation.
This conceptual design phase has a schedule of six months
and has already commenced with a target completion
of mid-February 2010. At the completion of the work,
Linc Energy will have data outlining likely operating and
capital costs such that it can further validate the expected
shareholder value that this first plant can realise.
The appointment of Aker Solutions is further recognition
of Linc Energy’s significant progress upon its vision and
technical development. This engineering agreement with
Aker Solutions is an important step in the Company’s
progression towards commercialisation. The outcome
of this work will lay the foundations on which the
execution of the commercial project will be based.
Our experience
Linc Energy is the world leader in UCG technology
development, with 10 years of experience in Australia
and as the owner of the only commercial scale UCG
operation in the world at Yerostigaz in Uzbekistan.
Linc Energy also has a UCG technology team that is
second to none in both the number and quality of UCG
technical specialists with experience and track records
of accomplishments with UCG.
18
We are already the first to commercially produce power
via UCG at our Yerostigaz operation, and with a focus upon
gas turbine power generation, in particular combined cycle
gas turbine for power generation, Linc Energy is aiming to
position itself as the leader in the field of cost-efficient UCG
to Power and commercialise this advantage in quite a large
way over the coming months. Again, watch this space!
In addition, we are the only company in the world
that has successfully developed a UCG to GTL
demonstration facility.
Linc Energy will continue to grow with even more people
being added to our technical teams in the months to
come. Linc Energy is aiming to expand its influence and
accomplishments, via the opening of offices in the USA,
Vietnam and larger offices in South Australia.
Our strategic locations
South Australia (SAPEX)
With the completion of the acquisition of SAPEX Limited
in October 2008, Linc Energy’s efforts in South Australia
have bolstered its domestic position for commercial UCG
operations. Exploration drilling is well under way in the
Arckaringa and Walloway Basins to identify suitable
coal for our commercial UCG operations.
United States
Globally, Linc Energy has aggressively pursued a strategy
to participate in the emerging clean coal energy sector in
the USA, paving the way for UCG to GTL in North America.
The recent acquisition of 92,059 acres of coal lease
areas in the Powder River Basin in Wyoming is our first
step to achieve this goal. We now hold a 100 per cent
interest in these leases and intend to shortly commence
the necessary site selection work, permit and approval
processes required in order to obtain a commercial
UCG operational permit.
Prior to the end of 2009, Linc Energy intends to open
a US head office in Denver, Colorado and a project office
in Casper, Wyoming to support its UCG operations within
Wyoming, and assist in capitalising upon additional
opportunities in North America.
I would like to acknowledge the great support that
Linc Energy received throughout the acquisition process.
Our colleagues at GasTech, President John Wold, and
the Governor of Wyoming, Dave Freudenthal, were on
hand to welcome Linc Energy with significant praise of our
achievements and what Linc Energy brings to Wyoming.
Vietnam
Also, earlier this year we completed negotiations and
signed contracts with our partners in Vietnam, VINACOMIN
and Marubeni. The main aim of the Tonkin project is to
deliver power to over six million households in Vietnam
using Linc Energy’s UCG technology. Stage 1 of the project
will involve the development and operation of a trial
UCG field in the Red River Delta region of Vietnam.
The finalisation of these contracts is a major step for
Linc Energy towards its goal of bringing power generation
fuelled by competitively priced UCG synthesis gas to
countries like Vietnam that have significant increasing
demands for power supply. Our work in Vietnam will
further demonstrate the potential for UCG to be the
next major energy source for the world.
It is exciting to be part of a solution that can positively
impact millions of lives. What we are planning to do in
Vietnam is a demonstration of what Linc Energy can
achieve and how we can potentially help the global
community. We look forward to bringing this project to
commercialisation and continuing our strong working
relationships with our Vietnamese and Japanese partners.
Yerostigaz
Operations in Linc Energy controlled Yerostigaz in
Uzbekistan continue, with positive results being achieved
for the supply of syngas to nearby Angren Power Station.
The government has been particularly pleased with the
quality of the gas supply with Yerostigaz being identified
as one of the country’s best performing energy companies.
Yerostigaz continues to be a huge source of technical
competitive advantage for UCG development for Linc Energy.
Over the coming twelve months some modest improvements
will be made to Yerostigaz’s air compressor operations with
new western style air compressors being purchased and
installed at the site. This will further improve the reliability
and energy efficiency of UCG gas production into
the future, adding to the site’s profitability.
A committed and expert team
The past financial year has seen Linc Energy’s technical
teams grow both in experience and in employee numbers.
Linc Energy is a unique organisation, with specialist
recruitment requirements, which has attracted employees
from all over the world including South Africa, Russia, the
United States and Australia, to name just a few. Linc Energy
staff are indeed an asset and it is their commitment to the
vision of providing cleaner energy solutions that will help
Linc Energy to realise UCG to GTL success.
It is this strong team that has allowed Linc Energy to
deliver on our objectives this year. I am very proud of the
achievements of this outstanding team. We have a strong,
versatile, disciplined, highly trained and experienced team
and it is one of our key strategies to continue to build
this team and to expand it that sets us apart from our
competitors and places Linc Energy firmly at the front of
UCG development and operations. As an example of this,
I am extremely proud of the fact that over the past four
years we have developed the world’s largest and most
relevant UCG technical library in the world; an asset unique
to Linc Energy and its technical team.
19

02 MANAGING
DIRECTOR’S
REPORT
CONTINUED
Drilling and exploration
Linc Energy has undertaken an extensive drilling program
in order to best identify locations for our commercial
UCG facilities including UCG to GTL and UCG to Power
Generation, and to unlock the value of our coal assets
either by way of sale or UCG development. This drilling
program has been focused in several areas.
Queensland
An extensive drilling and exploration program has
continued in Queensland in Emerald, Biloela, Dalby
and in the Galilee Basin.
Dalby
We have several exploration tenements in the Dalby area which
is within the Surat Basin and one of the exploration programs
for this year produced a total inferred coal resource of 146
million tonnes in accordance with the JORC Code3 . As a result
of this drilling program we have lodged a Mineral Development
Licence with the Department of Mines and Energy.
Galilee
There is a lot of activity within the Galilee Basin with several
companies announcing plans for the development of the
basin and infrastructure within the area. This has assisted
to enhance the profile and value of our own tenements
within the Galilee Basin. As mentioned, we have been
greatly encouraged by the results of the drilling program
to the point where we have engaged a second drilling
contractor to expand our current drilling program from
29 holes to 101 holes. The results so far from both drill rigs
have exceeded expectations and provided a significant
increase in the Company’s coal deposit exploration target,
which has been upgraded from 3.0–3.4 billion tonnes to
5.0–5.5 billion tonnes4 in accordance with the JORC Code1 .
We had already known that our tenement in the Galilee
Basin represented a fantastic opportunity with significant
potential to host a large, long-life, low cost, open cut coal
mine. Our drilling program has confirmed that we have
a world-class asset of enormous potential. The value of
the coal asset will continue to increase as Linc Energy
accelerates its exploration work so that we can fully
comprehend the enormous potential of this coal
deposit in the shortest possible time.
20
South Australia
In South Australia this year we are undertaking a drilling
program in the Arckaringa Basin. In order to do so we
have conducted extensive landowner notifications, Cultural
Heritage Clearances and Environmental Approvals relating
to drilling within our seven Arckaringa Basin Petroleum
Exploration Licences (PELs). The initial focus of the drilling
has been for the potential for UCG and the evaluation
process will require further testing and gathering of relevant
geological data including coal characteristics, geotechnical
and hydrogeological information.
Walloway Basin
Linc Energy also commenced drilling in the Walloway
Basin. The first program which is now just being completed
consists of six holes that will allow us to identify the coal
deposit and the best location within the Walloway for a
commercial UCG operation.
The Walloway Basin holds fantastic potential for Linc
Energy as the tenement is close to port facilities, and has
road and rail infrastructure already in place. What has been
most pleasing and encouraging for our Company is the
wonderful level of community support provided to Linc
Energy by the local landholders, the local government
and the general community at large. If results from the
Walloway Basin are looking promising, Linc Energy will be
quickly and aggressively expanding its drilling program in
this area, to ensure we have the data to turn the Walloway
into potentially Australia’s first commercial UCG site.
Placement and SPP
In order to better position ourselves to aggressively pursue
growth, Linc Energy recently successfully completed an
institutional placement of 41,000,000 new ordinary shares
at $1.40 per share to raise $57.4 million in capital. The
confidence in the market and in particular in Linc Energy
meant that the placement was heavily oversubscribed,
receiving strong support from a range of new institutional
investors from off-shore and Australia.
In addition to the institutional placement we also undertook
an SPP offering to existing shareholders, which honoured
my commitment at last year’s AGM where I stated that if
Linc Energy raised funds via placement to institutions in the
near future, that I would let existing shareholders participate
at the same rate as that offered to those institutions.
Subsequently, Linc Energy raised approximately $7.7 million
from the SPP offer. I would like to take this opportunity to
thank those shareholders who participated in the SPP. I am
very grateful for your continued support and vision.
The $65.1 million raised secures Linc Energy’s financial
future and lets us get on with aggressively pursuing a
number of key outcomes. In particular it allows Linc Energy
to aggressively pursue its core business outcomes of
building a world-class UCG and GTL business, and take the
key steps forward to the commercialisation of that business
upon our SAPEX tenements in South Australia; as well as
expanding our coal tenement and resource footprint across
Australia and the world, via acquisitions like the Wyoming
Powder River Basin coal purchase. The funds raised allow
Linc Energy to get on with the job and take control of its
own destiny, which I’m confident will result in an excellent
outcome for our shareholders.
My key focus for expenditure is to finalise the drilling upon
our South Australian tenements so as to finalise the first
UCG commercial site location and commence a UCG
operation upon that site. This will become the backbone
for our future commercialisation plans, as we intend to very
quickly commence building a UCG to Power generation
station, and simultaneously in parallel, push on with the first
UCG to GTL plant.
Investor Relations
Linc Energy is in the right spot at the right time as the
markets grow in confidence. I am also confident that
the share price will rebound over time, though I am
disappointed that it has not bounced back in line with
the markets in general. I believe that the outcomes we’ve
completed of late will start to rectify that position.
Linc Energy has also had to contend with the weight of
expectation and disappointment relating to the delay in
the coal asset sale. However, by commencing a structured
sales process via UBS, this has opened the opportunity to
numerous parties around the world and is proving to be the
right decision. The first stage of the sales process draws
to a close at the end of September 2009. This will allow for
a number of potential bidders to make an indicative offer
for their preferred coal assets which will allow Linc Energy
and its advisors to rank the bidders, from highest to lowest,
obviously dropping off the lower bids, before proceeding to
a second, more detailed round of negotiations. Interest in
our coal assets has been very strong, and I am pleased with
the progress to date. I believe the UBS coal sales process
will deliver an excellent result for shareholders in a timely
and structured manner.
Linc Energy recognises the importance of keeping
shareholders up to date with the progress of the Company.
Communication with our shareholders and stakeholders is
an extremely important part of the business and over the
last twelve months we have both maintained and enhanced
our communication to shareholders via email, our regular
newsletter InvestorLinc and through our website.
We have made and will make more changes and
enhancements to our website and increase the number
of updates to shareholders in order to provide our
shareholders with more information and to be able to
provide a better overall picture of Linc Energy’s progress. I
believe we didn’t keep the information flowing as quickly as
we could do or in as many forms as is currently available to
us (in terms of electronic updates, etc), so that is something
3 The information in this report relating to exploration results and coal resources is based on information compiled by Troy Turner, who is a member of the Australian Institute of Mining
and Metallurgy and who is employed by Xenith Consulting Pty Ltd. Troy Turner has sufficient experience which is relevant to the style of mineralization and type of deposit under
consideration and to the activity which they are undertaking to qualify as a competent person as defined in the 2004 Edition of the “Australasian Code for Reporting Exploration Results,
Mineral Resources and Ore Reserves”. Troy Turner consents to the inclusion in this report of the matters based on their information in the form and context in which it appears.
4 In accordance with the requirements of clause 18 of the JORC Code regarding exploration, the following compulsory statement concerning exploration targets is included: “The potential
quantity and quality is conceptual in nature, there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of
a Mineral Resource.”
21

02 MANAGING
DIRECTOR’S
REPORT
CONTINUED
I am aiming to rectify over the coming twelve months, to
ensure increased shareholder awareness of Linc Energy’s
activities and accomplishments. For those who have visited
our website you might have noticed that we have added a
section where information sheets are now available to be
downloaded that provide information and explanations on
all aspects of the business.
Continuing on from last year we have conducted numerous
roadshows around the world in order to promote the
business and to sell the Linc Energy story. Linc Energy
has been recognised as the world leader in UCG to GTL
and as such has been invited as key speaker to numerous
conferences in Asia, Europe and the United States. All of
this helps us tell the world why Linc Energy and the UCG
story is so compelling.
I also note that the number of Linc Energy shareholders
has grown from 6,160 to 11,641 at 30 June 2009 (another
amazing year of growth).
Linc Carbon Solutions
We have applied for two patents (pat. Pending) with
Linc Carbon Solutions and we are expanding our focus
into a number of other joint ventures to ensure a successful
outcome for the capture and processing of CO2, including
the opportunity to work with some of the world’s leaders
in CO2 sequestration.
It is my aim to turn Linc Carbon Solutions into a worldclass
company capable of handling Linc Energy’s CO2
requirements. Whether that be selling the CO2 in North
America, geo sequestration or bioreactor sequestration,
what matters is that Linc Energy has the answer to its CO2
question, and in due course I believe this will in fact be a
very strong business for the future.
22
Outlook
Linc Energy has always had an exciting future with growth
potential around the world. We are firmly committed to the
commercialisation of UCG to GTL technologies in Australia
and abroad, and work continues on conceptual design
development and commercial planning for our 20,000 bpd
UCG to GTL facility.
No one could have predicted the volatility in the share
and commodities market over the past twelve months.
Yet despite all the turmoil and uncertainty it has been an
extraordinarily busy and successful year for Linc Energy.
We have delivered on one of the largest exploration and
drilling programs in the Company’s history. Through this
program we have enhanced the value of our coal assets
significantly and are in a competitive process to realise
some of the value of those coal assets as we start to
sell some of them via the UBS sale process. We have
successfully raised over $65.1 million of new capital that
secures the future of the Company to grow and expand.
We purchased the Wyoming coal acreage and have
recently commenced site evaluation of the coal there.
And in a market where companies are reducing their staff
levels we continue to employ more people to strengthen our
team and capability.
We successfully completed the acquisition of SAPEX and
we are seeking more coal in the United States. These
acquisitions set up Linc Energy for growth in both Australia
and in North America. We also signed contracts with our
partners in Vietnam to commence the first UCG project
in Vietnam.
Most importantly, we have delivered a significant world-first
by successfully producing liquids from the UCG to GTL
process and Linc Energy continues to enhance its GTL
program with great success, with a focus upon jet fuel
production over the coming months. The value of this GTL
success should not be underestimated as we have proven
that our vision to monetise stranded coal and turn that coal
into syngas via UCG and then convert that gas into valuable
diesel was right and we as a company can drive forward
to commercialisation. We have now turned to the practical
commercialisation of that vision by appointing Aker
Solutions to undertake the concept design for the
20,000 bpd plant.
These are all significant achievements in any single year, let
alone a year with the uncertainty of the financial melt-down
as we have all just lived through. During these difficult times
we maintained focus on delivering on our commitments
even if the pace of delivery had slowed over these past
few months due to outside influences. Linc Energy has
stayed focused and improved the Company considerably,
particularly consolidating a lot of the good work from last
year into a stable company, creating a platform for Linc
Energy to springboard into the future.
Although I would love to have completed everything faster
and been more aggressive, the world had other ideas upon
timing, and to that extent I am very proud of the way we
at Linc Energy have handled the past twelve months,
and most importantly, that we are very well positioned
to take advantage of the next twelve months.
We are taking some very exciting steps here at Linc
Energy, and each step takes us that much closer to our
first commercial operation. I look forward to that progress
blossoming in front of you in the coming year. It is going
to be a year where Linc Energy truly defines itself through
its accomplishments.
Yours sincerely,
Peter Bond
CEO and Managing Director
23

03
ESTABLISHING
GLOBAL
LOCATIONS
Australia
Linc Energy’s Australian activities include:
• The operation of the Chinchilla Demonstration Facility:
Combined UCG and GTL success was first achieved on
14 October 2008 with the first production of liquids.
Wyoming
• Coal exploration in Queensland: While the primary purpose
is to find suitable sites for UCG operations, deposits more
suited to traditional coal mining are prepared as potential
assets for divestment to fund the development of Linc
Energy’s core business.
• South Australian coal, oil and gas exploration: Following
the 2008 merger with SAPEX Limited, Linc Energy is
progressing with coal exploration for its intended first
commercial scale UCG to GTL operation. Linc Energy
is also progressing with options for coal seam gas and
conventional oil and gas exploration.
United States
Linc Energy has signed a contract for the purchase of over
92,000 acres of coal tenements in the Powder River Basin,
Wyoming. This purchase is the first stage of the intended
acquisition of GasTech Inc first announced in December 2008.
Uzbekistan
Linc Energy has progressively acquired over 70 per cent of
Yerostigaz, the only commercial UCG operation in the
world. The acquisition provides Linc Energy with access to
commercial scale operational knowledge about UCG.
Vietnam
Linc Energy has entered into a business cooperation works
contract with VINACOMIN (Vietnam National Coal Minerals
Industries Group) and Japanese company Marubeni
Corporation, to commence stage one of the Tonkin Project in
the Red River Delta. Additional stages of this project, if feasible,
would use UCG to Power to over six million Vietnamese
households.
Uzbekistan
Vietnam
Chinchilla
South Australia
24 25

04REVIEW OF
OPERATIONS
AND ACTIVITIES
Leading a new industry
Linc Energy is an innovative, forward-thinking company
developing a significant energy business based on the
production of cleaner energy solutions.
Underground Coal Gasification (UCG) is a unique
technology that provides access to coal deep underground,
otherwise inaccessible using traditional mining methods.
Linc Energy accesses this coal by in-situ gasification to
produce a high quality synthesis gas (syngas). Syngas
contains key ingredients carbon monoxide and hydrogen.
Aboveground, UCG syngas is processed in a Gas to Liquids
(GTL) plant using Fischer-Tropsch technology to produce
high quality, sulphur free, synthetic liquid hydrocarbons.
UCG syngas is a suitable feedstock for Linc Energy’s
GTL process to produce cleaner liquid transport fuels
such as synthetic diesel and jet fuel. Syngas is also an
ideal feedstock for combined cycle, gas turbine power
generation. It is also a valuable feedstock for the production
of a range of other chemical and energy commodities.
The 2008–2009 financial year was indeed one of growth
for Linc Energy. Linc Energy grew in experience and
in employee numbers. It has been a year of important
technological achievement with some very significant goals
and challenges achieved and met. Linc Energy is impatient
to achieve its goals towards commercialisation and the
focus for the next period is firmly fixed on the significant
challenges that lie ahead. The 2009–2010 period will
see significant progress in technology development as
plans progress for the construction of Linc Energy’s first
commercial operation.
Securing new energy sources
Australia is a nation rich in coal resources, but is relatively
poor in conventional petroleum. Much of Australia’s coal
is deep underground and stranded if conventional mining
was the sole mining solution. Linc Energy’s combined UCG
and GTL technologies provide a solution for securing
energy within Australia’s borders, reducing the nation’s
reliance on imported oil products.
UCG and GTL technologies have the ability to unlock
stranded energy in other coal rich nations around the world
and can provide such countries with greater energy security
and alternate supplies of high quality, cleaner burning liquid
transport fuels.
The technology
Gas to Liquids
Final construction activities on the GTL pilot plant were
completed in August 2008 and the world’s first UCG to
GTL demonstration facility was ready for commissioning.
Linc Energy’s operations and engineering teams put the
initial design to the test. Part of the challenge to develop
new technologies, and/or combine existing, proven
technologies is to ensure that the appropriate skills
and experience are in place and that these are effective
to overcome challenges. Long hours and hard work paid
off in October 2008 when syngas was first introduced
into the Fischer-Tropsch reactor, achieving conversion
to liquid hydrocarbons.
Following this initial success, a number of start-up
modifications were identified and implemented throughout
the remainder of 2008. During this period, Linc Energy’s
GTL technology team grew in numbers and competence
with the appointment of key, highly skilled engineers
with backgrounds in gas clean-up, Fischer-Tropsch
and refining technologies and with expertise in commercial
and pilot plant operation, plant design, engineering
and project management.
By following a systematic approach to troubleshooting,
stable and reliable operation of the synthesis gas cleaning
and compression systems was achieved. This enabled
the team to focus on comparing actual plant performance
against design values, evaluate optimisation opportunities
in contaminant removal and to gather important information
during sustained periods of UCG to GTL operation to fully
understand the integration of the two technologies. During the
first two quarters of 2009, four Fischer-Tropsch campaigns
were conducted. Each campaign brought incremental
improvement and learning. Linc Energy’s research laboratory
contributed significantly to campaign success by operating
a small scale Fischer-Tropsch reactor while simultaneously
operating the main reactor of the pilot plant on identical UCG
syngas. The laboratory reactor was able to demonstrate high
carbon monoxide and hydrogen conversions over extended
periods using gas taken from the plant. This provided not
only valuable data but also significant confidence that further
process improvement could be achieved.
These achievements, coupled with advances in gas cleanup
through continuous liaison with catalyst and chemical
suppliers, enabled the GTL team to produce even higher
quality syngas with contaminants in the parts per billion
(ppb) range. The subsequent improved performance of
the Fischer-Tropsch reaction section resulted in the production
of appreciable quantities of high quality syncrude during
these campaigns.
The next stage of improvement work will focus on increasing
catalyst activity, and subsequently, production rates. Work to
further improve the Fischer-Tropsch catalyst reduction system
is well under way and a program of Fischer-Tropsch catalyst
options and performance testing (both in-house and external)
is being expanded. Refinements and improvements in the UCG
process, as a result of integrated pilot plant campaigns, have
been implemented in the next generation pilot gasifier, which
is nearing design completion.
The results from the pilot work have and will continue to be
used as key inputs during conceptual engineering of the
commercial scale UCG to GTL facility. Since the beginning
of 2009, the GTL technology team has been working on the
scope for the conceptual project and compiling the design
basis for Linc Energy’s 20,000 barrel per day commercial
UCG to GTL facility planned for South Australia. The team has
also evaluated key Australian-based engineering companies
to assist in Linc Energy’s GTL technology development.
A technology partner selection process resulted in Linc Energy
partnering with Aker Solutions to complete the conceptual
design package by the end of the first quarter of 2010.
Underground Coal Gasification
Linc Energy made a significant investment during the year to
further develop its UCG technology platform. The investment,
largely in the form of a greatly expanded technology team,
resulted in the acceleration of Linc Energy’s UCG technology
development. This will further drive Linc Energy towards
commercialisation as its technologies reach maturity.
The UCG technology platform being developed is multidisciplinary.
It links generator cavity growth modelling with
gasification modelling and engineering, which in turn is
linked with geological and hydrogeology understanding and
modelling. The technology will allow Linc Energy to predict
the volume, quality and cost of synthesis gas (and contained
energy) produced from coal resources as they are identified.
This platform will also be used as the basis for design,
construction and operation of commercial UCG generators.
The Linc Energy technology team is also developing the
drilling, well design and other specialist engineering aspects
of the technology to confirm cost and reliability objectives
for commercial scale operations.
26 27

04 REVIEW OF
OPERATIONS AND
ACTIVITIES CONTINUED
Underground Coal Gasification
Continued
To provide the necessary confidence in Linc Energy’s
technology, it is important to have an operating UCG site
that provides for technological testing and validation. In this
light, the Chinchilla Demonstration Facility has played a very
significant role during the past year. It remains a source of
significant competitive advantage, as will each subsequent
project opportunity, including those planned for South
Australia, Vietnam and the United States.
Over the past financial year in Chinchilla, Linc Energy’s
Generator 3 (the third UCG generator) was commissioned
and operated. Generator 3 produced syngas continuously
over a period of about 10 months, making it one of the
longest western-world UCG demonstrations. During that
time, it provided syngas for Linc Energy’s GTL plant.
Over a number of GTL campaigns, the UCG syngas was
demonstrated as a suitable feedstock for the production
of high quality liquid hydrocarbons when used with Linc
Energy’s specially configured Fischer-Tropsch technology.
This was a key test for the combined success of its UCG
and GTL technologies.
Generator 3 used air as the oxidant, producing gas at a
pressure of approximately eight atmospheres. During its
operating life, it produced gas of consistent quantity
and quality. When expressed on a nitrogen-free basis, the
gas had a typical composition of 32 per cent hydrogen;
17 per cent carbon monoxide and 18 per cent methane.
The hydrogen/carbon monoxide ratio of 1.81 was ideal
for Linc Energy’s GTL process.
By the end of the year, Linc Energy began to shutdown
Generator 3 and prepare for cavity cleansing and
remediation. Successful shutdown and remediation
is an important phase in the operating life of a UCG
generator. Linc Energy’s ability to demonstrate successful
management of the environmental performance of UCG
during all stages of operations is another critical factor
for its future success. The UCG technology team has
also ably led this important shutdown work.
Linc Energy is well-advanced with the engineering of its
next UCG generator. Generator 4 will be developed using
the latest technology and engineering. It will demonstrate,
amongst other things, higher production rates and
increased coal recovery capability to further validate Linc
Energy’s UCG technology development, much of which
is aimed at further reducing gas production costs and
increasing reliability. Linc Energy is targeting the end of
2009 for the start of Generator 4.
During the year, UCG progress at the Chinchilla
Demonstration Facility required input from the Yerostigaz
team in Uzbekistan. During the early phases of Generator 3
design and commissioning, assistance from this team was
crucial. The Yerostigaz facility remains an ongoing source
of technical support that will continue to prove invaluable
for Linc Energy’s future.
The operations
Chinchilla Demonstration Facility
The Chinchilla Demonstration Facility was significantly
transformed during the past financial year. In addition to
the construction and commissioning of the GTL plant and
UCG Generator 3, there were significant enhancements to
the site infrastructure. This included new roads, extended
and improved IT infrastructure, a new laboratory, safety and
emergency management infrastructure, and lighting and
telecommunications improvements. These enhancements
were essential for the development and operation of a
facility that effectively showcases Linc Energy’s vision to
develop a large synthetic fuels business from its UCG to
GTL technologies. The Chinchilla Demonstration Facility is
a professional, well-maintained operation that can now lay
genuine claim to being a world-class demonstration facility.
During the past year, Linc Energy significantly increased
its focus on safety performance. The Health and Safety
Management Plan was reviewed and revised in preparation
for the start of operations. Key safety standards were
developed for all high risk areas within Linc Energy’s
operations. This review and the standards developed
assisted the implementation of critical safety systems,
including equipment isolation and lock out, electrical safety,
and the handling of hazardous substances. To ensure these
systems were fully and effectively implemented, a significant
amount of training and familiarisation occurred with staff
and contractors and investment was made in site safety
infrastructure and related tools.
The Emergency Management Plan was also reviewed and
elements of this revised plan are regularly tested to ensure
it is capable of responding to an emergency should one
arise. Successful emergency exercises involving local
emergency services were also undertaken. These activities
provide further evidence of Linc Energy’s growth
and maturity.
Safety systems and the resulting levels of compliance were
evaluated by an extensive third party audit process. The
audits confirmed the progress achieved and provided the
basis for future improvement. Linc Energy also conducted
a health risk assessment, targeting the highest potential
health risks at the facility. Findings from the work confirmed
Linc Energy employees are not being exposed to any
substances at levels that may pose any chronic health
impacts. This was a very important validation of Linc
Energy’s operating conditions and work practices.
Although significant effort was made to improve safety
performance during the past year, there were four lost time
injuries (LTIs) suffered by employees and contractors. LTIs
included an off-site motor vehicle accident, two sprained
ankles and an eye injury suffered by a contract driller.
Two of the LTI injuries involved contractors. All LTIs, other
than the motor vehicle accident, were of low potential
consequence. Pleasingly, there were no significant injuries
or incidents encountered during the significant construction
activity associated with the GTL plant nor during the first
half of 2009.
During the latter half of 2008, the Chinchilla Demonstration
Facility laboratory was completed to support UCG and
GTL operations. The laboratory includes a process control
laboratory to provide real time analytical support. A Fischer-
Tropsch reactor laboratory provides the ability to test the
performance of Fischer-Tropsch catalysts under a range of
conditions, using both synthetically blended synthesis gases,
and gas piped directly from the GTL plant during operation.
The ability to confirm the quality of UCG synthesis gas and
expected GTL plant conversions in real time is pivotal for GTL
technical development. Three gas chromatographs are now
available in the laboratory and provide accurate, timely UCG
and GTL gas analysis. The gas chromatographs also provide
the capability for Linc Energy to categorise the nature of
the high quality synthetic liquids produced at the facility.
Linc Energy marked the success of its Chinchilla
Demonstration Facility with the official opening by the Federal
Minister for Resources and Energy, the Honourable Martin
Ferguson AM MP on 22 April 2009. By this time, the Chinchilla
Demonstration Facility had become a world-class showcase of
Linc Energy’s vision. The investment in infrastructure, training
and systems, coupled with the passion and commitment of
the Chinchilla-based operations staff, all contributed to this
remarkable achievement.
Environmental management
During the year, Linc Energy’s environmental management
focused on preparing information for progressing commercial
approval for UCG in Queensland, monitoring environmental
performance of the Chinchilla Demonstration Facility operations
and establishing an environmental management system.
A new environmental policy was developed to reiterate
Linc Energy’s commitment to minimising environmental risk.
The team also began to systemise environmental management
with the development of an environmental management system.
28 29

04 REVIEW OF
OPERATIONS AND
ACTIVITIES CONTINUED
Environmental management
Continued
In February, the Queensland Government released a UCG
policy that established an expert scientific panel to assess
the social, economic and environmental impacts associated
with UCG. The panel will consider ‘pilot project reports’
submitted by various UCG companies operating within
Queensland. The panel will then report its findings to the
Queensland Government.
Linc Energy has progressed its Environmental Impact
Statement (EIS) for the proposed Chinchilla commercial
facility and is able to rely on information collected as part
of that process to contribute strongly to the expert UCG
policy panel. Linc Energy will continue to progress impact
modelling at both pilot and commercial scale sites to
contribute to the assessment activities of the panel.
In 2008, an extensive system of groundwater piezometers
was installed to enable further assessment of Chinchilla
groundwater conditions. This investment provides further
data to allow for the modelling of groundwater impacts and
confirms that, when appropriately designed and managed,
UCG can be undertaken without deleterious impacts on
the groundwater environment. This adds to the already
extensive data set of groundwater parameters gathered
over 10 years at the Chinchilla Demonstration Facility,
confirming the environmental credentials of Linc Energy’s
operations and technologies.
During the year, Linc Energy was free of serious
environmental incidents and was not subjected to any
enforcement action by regulators in any state or territory
of Australia.
Exploration
Linc Energy’s business requires an active exploration
program to identify suitable resources for UCG. Coal that
is suitable for UCG is deep underground and is generally
unsuitable for extraction by traditional methods. With a
diverse and extensive portfolio of coal deposits, Linc Energy
aims to ensure it has sufficient coal resources to sustain
UCG operations well into the future.
Arckaringa Basin
Extensive review of the South Australian Arckaringa Basin
tenements took place following the SAPEX Limited merger.
The review was conducted to identify suitable locations
for initial appraisal drilling within the seven vast Petroleum
Exploration Licences (PELs). Following confirmation of
nine drilling locations, Linc Energy has now conducted all
necessary notifications and clearances and has submitted
final paperwork with Primary Industries and Resources
South Australia (PIRSA), in anticipation for the start of
drilling. The nine exploration wells will seek to evaluate
the UCG potential of Linc Energy’s Arckaringa tenements
through extensive testing and gathering of relevant
geological data, including geophysical, geotechnical
and hydrogeological information.
Biloela
The drilling of a preliminary four hole program was
completed in March 2009 within Exploration Permit for
Coal (EPC) 908, near Biloela, central Queensland. The
basin is considered prospective for tertiary aged low rank
coals, potentially suitable for UCG. Drilling was centred in
the vicinity of historical Geological Survey of Queensland
Stratigraphic hole, Monto 5. Whilst drilling encountered
several coal intersections at depths below 150 metres, they
were found to be of insufficient thickness and continuity to
be considered suitable for the UCG process. A basin wide
review is currently being conducted to appraise all Linc
Energy tenements within the area (EPCs 908, 909, 1248
and 1323) for other potentially suitable drilling locations.
Chinchilla
Linc Energy’s Chinchilla project area consists of Mineral
Development Licence (MDL) 309, EPC 635 and EPC 897.
Linc Energy submitted a Mining Lease application for this
area. From June to December 2008, a significant drilling
program was undertaken and consisted of 26 chip holes
and 30 core holes. This work brought the total exploration
at the site to in excess of 250 holes. The drilling allowed
for a large upgrade in the quantified coal resource (in
accordance with the JORC Code1 ) for the project area.
In January 2009, this totalled 775 million tonnes, consisting
of 24 million tonnes Measured, 383 million tonnes Indicated
and 368 million tonnes Inferred1 .
Dalby
Drilling in Linc Energy’s Dalby tenements (MDL 371a)
concluded in December 2008. Following collation of
drilling results, Xenith Consulting analysed the data and
identified a total Inferred coal resource in accordance with
the JORC Code of 146 million tonnes1 . This report was
lodged with the Department of Employment, Economic
Development and Innovation (previously the Department of
Mines and Energy) in June 2009 as part of the supporting
documentation for Linc Energy’s MDL application 371a. On
5 June 2009, Linc Energy also lodged an EPC application
(EPC 1770) within MDL 371a. This application was an
effective replacement for previous Linc Energy EPC 704.
Emerald
In June 2008, Linc Energy undertook an extensive
exploration drilling program in EPC 980, 1226 and
1267, referred to as the ‘Theresa Project’, with the aim of
delineating an Inferred resource in accordance with the
JORC Code. To date, Linc Energy’s total exploration for the
‘Theresa Project’ has consisted of 47 chip holes and 34
core holes for a total of 21,097 metres drilled.
On 18 November 2008, Linc Energy announced a total coal
resource of 852 million tonnes Inferred (in accordance with
the JORC Code 2 ) for the Theresa area. On 24 November
2008, Linc Energy made an application for a Mining Lease
(MLa 70405) over 104 square kilometres of the area covering
the ‘Theresa’ prospect, which is much of EPC 980 and part
of EPC 1226. A preliminary Initial Development Plan was
completed in support of the Mining Lease application.
On 24 June 2009, Linc Energy appointed the UBS
Investment Bank to commence the strategic sales process
for this non-core asset.
Galilee
In May 2009, Linc Energy began an initial 24 core hole
drilling program in the Galilee Basin in the area covered
by MDL application 372. Based on historical drilling
information and initial Linc Energy drilling results, a coal
mineralisation exploration target3 of 5.0 to 5.5 billion
tonnes1 in accordance with the JORC Code has been
identified, including 1.6 to 1.9 billion tonnes identified with
potential for extraction via open cut mining methods within
a depth limit of 120 metres.
The initial program continues to progress well and subject
to continued positive results, it is Linc Energy’s intention
to expand its Galilee program, where it will seek to further
delineate the full potential of the open cut deposit. By
increasing the amount of drilling Linc Energy will seek to
upgrade to Indicated status the entire area defined to have
open cut potential, in accordance with the JORC Code. This
will require a more substantial program with a revised total of
over 100 holes. Linc Energy believes the program will confirm
the viability of a long life, low cost, high quality thermal coal
open cut mining project, of world-class proportions.
On 24 June 2009, Linc Energy appointed the UBS
Investment Bank to commence the strategic sales process
for this non-core asset.
1 The information in this report relating to exploration results and coal resources is based on information compiled by Troy Turner, who is a member of the Australian Institute of Mining and
Metallurgy and who is employed by Xenith Consulting Pty Ltd. Troy Turner has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration
and to the activity which they are undertaking to qualify as a competent person as defined in the 2004 Edition of the “Australasian Code for Reporting Exploration Results, Mineral
Resources and Ore Reserves”. Troy Turner consents to the inclusion in this report of the matters based on their information in the form and context in which it appears.
2 The information in this report relating to exploration results and coal resources is based on information compiled by Tim Jones, who is a member of the Australian Institute of Mining
and Metallurgy and who is employed by Northern Geoscience Pty Ltd. Tim Jones has sufficient experience which is relevant to the style of mineralisation and type of deposit under
consideration and to the activity which they are undertaking to qualify as a competent person as defined in the 2004 Edition of the “Australasian Code for Reporting Exploration Results,
Mineral Resources and Ore Reserves”. Tim Jones consents to the inclusion in this report of the matters based on their information in the form and context in which it appears.
3 In accordance with the requirements of clause 18 of the JORC Code regarding exploration, the following compulsory statement concerning exploration targets is included: “The
potential quantity and quality is conceptual in nature, there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the
determination of a Mineral Resource.”
30 31

04 REVIEW OF
OPERATIONS AND
ACTIVITIES CONTINUED
Exploration
Continued
Pentland
Linc Energy is the holder of EPC 526 and applicant for
MDL 361a, covering an area of about 30 square kilometres,
13 kilometres south-west of Pentland, in the Galilee Basin.
In August and September 2008, Linc Energy drilled seven
holes. The aim of this drilling and exploration program was
to validate and extrapolate the extensive historical drilling
efforts conducted by the Shell Development Company in
the late 1970s and early 1980s. The information gained
from the drill holes validated the earlier data and was
combined with the historical data for purposes of resource
modelling and estimation, conducted by Xenith Consulting
and made available to Linc Energy in October 2008. Xenith
Consulting identified a total resource in accordance with
the JORC Code of 266 million tonnes of coal1 , consisting of
176 million tonnes in the Indicated category and a further
90 million tonnes in the Inferred category. This report was
lodged with the Department of Mines and Energy (now the
Department of Employment, Economic Development and
Innovation) in support of the MDL application 361.
On 24 June 2009, Linc Energy appointed the UBS
Investment Bank to commence the strategic sales process
for this non-core asset.
Walloway Basin
In addition to the Arckaringa Basin tenements obtained
through Linc Energy’s merger with SAPEX Limited, Linc
Energy also gained access to exploration tenements in
the tertiary age Walloway and St Vincent Basins in South
Australia via PEL 120. The tenement is favourably located
to existing infrastructure and Linc Energy has identified a
drilling target area in the vicinity of Orroroo, 95 kilometres
east of Port Augusta. This area will undergo six exploration
wells which started in mid-August. The lateral extent of
any coal occurrence will be investigated and its geological
characteristics assessed to evaluate suitability for Linc
Energy’s UCG technology. Relevant clearances and
documentation have recently been completed and lodged
in preparation for field work.
Linc Carbon Solutions
Since June 2008, the focus of Linc Carbon Solutions has
been on bio-sequestration, and more specifically, on using
algae to capture and recycle carbon dioxide into biomass
and oxygen.
After careful planning and with a vision of developing a
commercial photo-bioreactor to mitigate carbon dioxide
emissions, Linc Energy established a laboratory to perform
tests on three different algae species, using artificial lighting
systems to replace sunlight. These lighting systems were
configured with different specifications such as intensity,
wavelength and pulsing frequency to determine their effect
on algal photosynthesis.
After commissioning the laboratory, tests ran for about 40
days. The determination of the correct lighting parameters
is critical to improve the overall efficiency of the process,
allowing for commercial scale development of the
technology. The results did not meet expectations; however
the work was sufficiently encouraging for further trials to be
planned.
Early in 2009, Linc Carbon Solutions began discussions
with a university and two private companies to seek third
party review of the original test results and plan for a new
experimentation with different algae species, prototypes
and photosynthetic parameters. The next stage of technical
development will take place in 2009–2010 once the
appropriate partner is confirmed to undertake this work.
Following work completed during the year, Linc Carbon
Solutions has applied for patents for the novel reactor and
lighting system designs it has developed. These patents are
currently pending.
1 The information in this report relating to exploration results and coal resources is based on information compiled by Troy Turner, who is a member of the Australian Institute of Mining and
Metallurgy and who is employed by Xenith Consulting Pty Ltd. Troy Turner has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration
and to the activity which they are undertaking to qualify as a competent person as defined in the 2004 Edition of the “Australasian Code for Reporting Exploration Results, Mineral
Resources and Ore Reserves”. Troy Turner consents to the inclusion in this report of the matters based on their information in the form and context in which it appears.
South Australia
A great deal of progress has been made in South Australia
over the past financial year. The merger agreement
between Linc Energy and SAPEX Limited was finalised on
15 October 2008 and as a result, 366 SAPEX shareholders
joined the Linc Energy share registry.
Throughout the year, SAPEX was integrated into the Linc
Energy business. This included familiarising Adelaidebased
staff, fitting out a new Linc Energy office, merging
business systems and preparing for 2009 South Australian
exploration activities. Linc Energy expects its staffing and
representation in South Australia to increase throughout
2009–2010 as work progresses in exploration and project
development.
As South Australian activities gained momentum, Linc
Energy identified stakeholder engagement as an important
priority. Four stakeholder groups were identified for focused
engagement during the year. These groups were the
Federal Government, South Australian Government, Local
Government (Queensland and South Australia) and the
landowners residing on Linc Energy’s tenements.
Throughout the year Linc Energy representatives met with
the Honourable Martin Ferguson AM MP, Federal Minister
for Resources and Energy, and Minister for Tourism several
times. Discussions were also held with the South Australian
Premier, the Honourable Mike Rann MP; the Minister for
Transport, Energy, the Honourable Patrick Conlon MP; and
the Minister for Mineral Resources and Development, the
Honourable Paul Holloway MLC. All discussions were very
positive, with the level of support from the Premier and the
Ministers greatly appreciated. Linc Energy representatives
also met with other relevant government departments on
numerous occasions where support for Linc Energy’s
success in South Australia was again confirmed. This was
particularly evident when Linc Energy started the process of
obtaining drilling and exploration approvals for its activities
in the Walloway Basin.
Planning for drilling and exploration in the Arckaringa and
Walloway Basins has been another priority for Linc Energy.
Tenements within these basins are strategically located with
access to highways, rail, ports and power. The local Orroroo
Council has assisted Linc Energy with its preparatory
activities for the Walloway program with that drilling planned
for commencement in August 2009. Linc Energy expects
the exploration program to be complete before the end of
2009 to enable Linc Energy to identify a suitable location
for its first commercial operation in South Australia.
Linc Energy continues to enjoy strong support from
the South Australian Government and is developing
a constructive relationship with PIRSA as it continues
with exploration approvals for its 2009 drilling program.
Linc Energy looks forward to assessing the results of
the initial UCG exploration program by the end of 2009.
The next phase of assessment will focus on sites that
appear to have the highest potential for large,
value-creating and sustainable UCG operations.
The PELs acquired through the merger were identified
by SAPEX as being good prospects for conventional oil
and gas resources. The Arckaringa Basin is to date largely
unexplored for petroleum resources and Linc Energy is
working to exploit the potential for economic petroleum
resources in the region. Existing seismic, drilling and
other exploration data is currently being reviewed.
Over the coming year, Linc Energy plans to design and
permit a reconnaissance drilling program to improve
its knowledge of the potential for economic oil and gas
discoveries in the Arckaringa Basin. Linc Energy also plans
to select suitable partners with demonstrated capability to
plan and operate drilling wildcat wells for the evaluation
of oil and gas potential to start drilling for conventional
oil and gas resources.
32 33

04 REVIEW OF
OPERATIONS AND
ACTIVITIES CONTINUED
United States
Linc Energy chose the Powder River Basin in the state
of Wyoming as its initial entry point into the United States
energy market. The Powder River Basin is the largest coal
producing area in the USA, with annual output in excess
of 450 million tonnes, about 38 per cent of total
US production.
The Powder River Basin is a well-established energy hub
with rail, pipeline and power distribution. A total of 14 active
surface mines operate in the Powder River Basin, with
many of the world’s leading mining companies represented
in the region. The largest mines produce more than 80
million tonnes per annum, making them the largest coal
mines in the world. Thick seams of low sulphur coal occur
close to the surface and provide a low cost energy product
which is transported by rail to nearly all parts of the USA.
In May 2009, Linc Energy signed a purchase agreement
to acquire 94 Wyoming state coal leases. These leases
contain more than 92,000 acres of Powder River Basin
tenements and are believed to hold a significant coal
deposit in the deeper, central parts of the basin. These can
not be mined economically using conventional methods.
The quality of coal in the Powder River Basin deposits is
favourable for UCG. Governor Dave Freudenthal welcomed
Linc Energy to Wyoming and offered the assistance of state
administrators as Linc Energy prepares its first UCG
permit application.
In the coming financial year, Linc Energy plans to establish
offices in the USA and assemble a team of technical,
professional and administrative employees based in the
USA. Linc Energy also plans to submit permit applications
as required to begin a UCG trial operation in the Powder
River Basin, with a view toward moving directly from the
trial to a commercial operation. Ultimately, Linc Energy
aims to evaluate and acquire additional key projects
for development using UCG technology.
Vietnam
Work continues on the trial UCG Tonkin Project, which
is a collaboration between VINACOMIN (Vietnam National
Coal Minerals Industries Group), Marubeni Corporation
(a Japanese company) and Linc Energy. The site for the
trial is about 60 kilometres south-east of Hanoi in the Red
River Delta. This region is in need of energy supply.
The last of the necessary Tonkin Project business contracts
was finalised on 21 April 2009 when VINACOMIN and
Marubeni Corporation attended the official opening of Linc
Energy’s Chinchilla Demonstration Facility. Linc Energy is
currently working with its partners to prepare and submit
the necessary documentation to the local Vietnamese
authorities to obtain an investment licence. It is expected that
project approvals will be in place by late September 2009.
Linc Energy’s Chief Operating Officer Stephen Dumble
attended the first management committee meeting in
Hanoi on 21 May 2009. The management committee has
one representative each from Linc Energy and Marubeni
Corporation, and two representatives from VINACOMIN.
The management committee meetings will play an
important role in guiding the execution and commissioning
of the stage 1 project in addition to overseeing the
governance and management control of the joint venture.
Linc Energy’s technical team continues to work on many
innovative ways to handle the unique challenges to be
confronted in the Red River Delta. This is seen as an
opportunity to develop portable, skid-mounted production
units to provide Linc Energy with a set of tools to routinely
and cost effectively undertake UCG trial projects in any
location in the future.
Stage 1 of the program, including 60 days of gas
production, is planned for completion within twelve months.
This stage will determine the suitability of the Red River
Delta for UCG. If successful, Stage 2 of the program will
start for the development of a commercial UCG field to
provide syngas for much needed power generation
in this region in Vietnam.
Yerostigaz
Linc Energy holds a 72.9 per cent majority controlling share
in the only commercial UCG plant in the world, Yerostigaz.
Based in Angren in the mountains of eastern Uzbekistan,
Yerostigaz produces 1,000,000m 3 of syngas each day to
supply the local state-owned 600 megawatt power station.
A regional city, Angren depends on the reliable consistency
of syngas from Yerostigaz to supply the dual fuel
(thermal coal and syngas) power station. The Uzbekistan
Government acknowledges Yerostigaz as the highest
performing energy asset in the country, using technology
that has consistently provided gas since it began
commercial operations in 1961.
The high quality syngas contains exceptional levels
of carbon monoxide, hydrogen and methane, delivering
a greater energy value above the requirements of Angren
Power Station. Syngas from Yerostigaz is a valuable
product and it compensates the power station when
its supply of coal is strained.
Yerostigaz is well ahead of its drilling program and hopes
to reach stretch targets to minimise the amount of drilling
required during the colder months. This will allow for
maintenance to be conducted during this time.
Current production levels and coal reserves indicate that
Yerostigaz has at least another 30 years of expected life.
A Linc Energy senior executive was recently appointed
to the Yerostigaz Supervisory Board to provide direct
involvement in the plant and its development. In a
modernisation program, older items of plant and equipment
are currently being replaced to further improve the
performance of Yerostigaz. This program will start with
the replacement of drilling equipment and will address
the continuous production aspects of the plant, including
air and gas flow considerations.
UCG technology at the Yerostigaz plant is highly valued.
Yerostigaz UCG exploits and extracts the energy potential
from unrecoverable coal, as an alternative to traditional mining
methods. There is significant interest in Yerostigaz from other
resource owners around the world. The high demand for this
technology demonstrates the significant value that Linc Energy
has and will further gain from this strategic asset, now
and in the future.
34 35

05
LEADERSHIP
TEAM
BRIAN JOHNSON
CHAIRMAN,
NON-EXECUTIVE DIRECTOR
Mr Johnson is a civil engineer
with extensive experience in the
construction and mining industries
in Australia, South-East Asia, and
North America. He has held a
number of directorships in listed
public companies in Australia
and overseas.
As a major shareholder and
Chief Executive, Mr Johnson was
instrumental in establishing both
Portman and Mount Gibson Iron
in the iron ore industry in Western
Australia. Mr Johnson personally
partnered Mr Lang Hancock in
the development and operation of
McCamey’s Monster iron ore mine
in the Pilbara region, prior to its sale
to BHP, and the Woodie Woodie
manganese mines in the same area.
His involvement in the coal industry
has been as Chairman of South
Blackwater Mines and in the
development of the Burton Downs
mine in Queensland, and the
establishment of Austral Coal
in NSW.
PETER BOND
MANAGING DIRECTOR
Mr Bond has a successful track
record in the coal and gold mining
industries, both in Australia
and overseas.
Building on his early engineering
background, he has gained a unique
knowledge and understanding
of the coal mining industry over
the course of a diversified career
spanning more than 20 years. His
various companies are recognised in
the mineral processing industry for
both innovation and efficiency. Mr
Bond has experience in the design,
installation, commissioning and
operation of complex processing
plants and projects.
Mr Bond’s business interests include
mineral, mining and associated
operations in Australia and South
East Asia. Mr Bond was appointed
to the Board in October 2004.
KEN DARK
NON-EXECUTIVE DIRECTOR
Mr Dark was appointed to the Linc
Energy Board in October 2004.
He began his career in the area of
industrial and electrical engineering.
He went on to become a recognised
specialist in the aluminium smelting
industry where he led multidisciplined
project engineering
teams both in Australia and Canada,
including work with Alcan Inc.
Mr Dark later established and
continues to operate a highly
successful business in the fuel
distribution and retail industry. He
has represented fuel distributors
and retailers, chairing the national
marketing committees of two
major fuel companies, leading the
franchise negotiation committee to
the successful renewal of national
contracts with one of the oil majors.
During the past year Mr Dark
has successfully completed
studies required to be admitted
as a graduate of the Australian
Institute of Company Directors. Mr
Dark holds tertiary qualifications
in industrial electronics and
electronics engineering.
STEPHEN DUMBLE
CHIEF OPERATING OFFICER
Stephen Dumble is a Chemical
Engineer by profession, with
extensive technical, operations and
project management experience
in the mining and metals industry.
Stephen joined Linc Energy
following 11 years with Rio Tinto,
including a Project Director role on
the Rio Tinto Yarwun 2 Alumina
Refinery Project in Gladstone. He
has also worked in a wide range
of commodity businesses, both in
operational, project development
and technical leadership roles.
Stephen’s experience in the
process industries, particularly
in the development and
management of major projects,
is invaluable for his role at Linc
Energy. Responsible for all
operational aspects of Linc Energy,
Stephen will guide the business as
it moves to commercialise its own
major project – the construction
of the first commercial UCG to
GTL facility.
ROB STRATFORD
CHIEF FINANCIAL OFFICER
Rob Stratford is a current member
of the Institute of Chartered
Accountants of Australia and
New Zealand, with a Bachelor of
Commerce majoring in Accounting
and Economics.
With 17 years’ experience, Rob has
enjoyed senior financial executive
roles across a wide range of
industries, including energy, banking
and education, most of which
were publicly-listed companies in
Australia and New Zealand. Rob has
a strong background in governance
and creating improved business
outcomes through the application
of his finance acumen, having had
significant experience with IPOs,
mergers, acquisitions and due
diligence.
Rob brings a wealth of experience
and knowledge to the management
team at Linc Energy. As Chief
Financial Officer, he is focused
on ensuring finances are properly
managed, whilst helping shape the
direction of Linc Energy towards
commercialisation.
JUSTYN PETERS
GENERAL MANAGER,
GOVERNMENT AND
BUSINESS DEVELOPMENT
Justyn Peters has more than 25
years’ extensive environmental
management experience. He is also
a qualified solicitor and barrister.
Justyn’s experience includes
University Environment
Lecturer, Legal Counsel for the
Department of Environment
and Heritage, Manager of
Compliance and Investigation
for the Queensland EPA, Acting
Director of Environment for the
EPA, Environment Advisor for the
Queensland Mining Council, and
National Environment and Property
Manager and Head of Business
Development for North Asia for
Airservices Australia, an Australian
Government statutory authority.
His role at Linc Energy
involves managing all affairs
of a government and business
development nature. His
knowledge and experience in North
Asia has seen Linc Energy develop
sound commercial relationships
and opportunities in India, Vietnam,
China and Japan.
36 37

05 LEADERSHIP
TEAM CONTINUED
CRAIG RICATO
COMPANY SECRETARY
AND GENERAL COUNSEL
Craig Ricato has enjoyed a
distinguished legal career and
was formerly a partner in a leading
Brisbane-based law firm, with
specific expertise in the area of
corporate law.
Admitted as a Legal Practitioner
of the Supreme Court in 2001 after
graduating with a Bachelor of Laws
with First Class Honours, his early
career background is in Forensic
Accounting.
In his position at Linc Energy,
Craig ensures compliance with
the regulatory requirements of
both the ASX and ASIC, provides
legal guidance to the Board, and
manages Linc Energy’s legal affairs.
KOBUS TERBLANCHE
GENERAL MANAGER,
GAS TO LIQUIDS
Kobus Terblanche has 20 years’
experience in GTL project
management, operations and
technology management and is
responsible for commercialising
Linc Energy’s GTL business. With
a Masters degree in Chemical
Engineering, specialising in Fischer-
Tropsch slurry technology, Kobus
started his career in basic R&D
with Sasol.
During his career, Kobus has played
a key role in the establishment
and management of organisations
such as Mossgas and PetroSA. He
also turned around and managed
a refining, storage and logistics
business for Glencore in the
Democratic Republic of Congo.
Kobus has an active interest
in business optimisation and
enhancement and has furthered
his expertise through studies at
Stanford University (Executive
Management) and the University
of London (Financial Economics).
NICK COX
MANAGER, GEOLOGY
AND EXPLORATION
Nick Cox has 15 years’ international
experience in the energy services
sector, beginning in the North Sea,
Africa, the former Soviet Union, and
more recently in Asia. He obtained
an Honours degree in Geochemistry
at the Postgraduate Institute of
Sedimentology in Reading, England.
Nick’s previous role as Global
Operations Manager in a coal
seam gas services business saw
him manage teams of engineers
and geologists across the world,
executing a diverse range of energy
projects including coal, oil and
gas exploration and evaluation. He
played a key role in the growth and
success of the company, leading to
a takeover by a large multinational oil
services company.
One of the earliest members of the
Linc Energy UCG technical team as
a Coal Geologist, Nick now leads
the Drilling and Exploration team,
evaluating and testing the diverse
range of targets in Linc Energy’s
exploration portfolio. His experience
in the UCG team greatly assists the
high grading of new UCG projects.
DAVID SMITH
COMMERCIAL MANAGER
David Smith has experience
developing business in
infrastructure, energy, mining,
manufacturing, construction,
telecommunication, generation and
utility industries. As the Commercial
Manager, David is responsible for
developing markets for products
and bi-products of the innovative
UCG and GTL technologies. He is
also responsible for government
relations in Queensland and
managing Linc Energy’s interests
in Yerostigaz in Uzbekistan.
Previously the Operations Manager
for an engineering, environment
and architecture company in the
Middle East, David delivered across
large projects and multi-disciplines.
Prior to that, he was the Chairman
of Infrastructure Association
of Queensland and held many
strategic development management
positions within industry.
David has an MBA from The
University of Queensland, an
Honours degree in Engineering
from the University of Wollongong
and is a Fellow of the Australian
Institute of Company Directors.
MATT BUCHANAN
MANAGER,
ENVIRONMENTAL AFFAIRS
Matt has enjoyed a successful and
diverse career in environmental
management in Queensland over
the last 15 years. He has spent
most of this time in the mining
sector, including as a regulator of
Queensland policy and legislation.
He has successfully completed
challenging projects in the
metalliferous, minerals processing
and mineral sands sectors and
has had significant exposure to
heavy industrial settings, including
smelting, refining and power
generation.
Matt brings to Linc Energy
skills in environmental impact
assessment, project management
and environmental systems and
compliance. In his role, Matt is
responsible for gaining statutory
project approvals, implementing
environmental policy and systems
and managing environmental affairs.
MARIANO MINOTTI
PROJECT MANAGER,
LINC CARBON SOLUTIONS
Mariano Minotti is a highly qualified
Industrial Engineer, with a Masters
in Technology and Management
of Energy Companies from the
ISE, in partnership with the IESE
Business School.
Starting his career in Argentina
as a production engineer for
Kimberly-Clark, he was later
awarded a scholarship by Repsol-
YPF to undertake his Masters
degree in Spain. Prior to joining
Linc Energy, he held a number
of engineering roles including
project management, financial and
technical analysis of investment
projects and production planning
and control.
With international experience and
a versatile background, Mariano
heads up Linc Carbon Solutions,
a subsidiary of Linc Energy which
aims to develop a bioreactor that
will allow greenhouse gas emitters
to safely recycle their carbon
dioxide into oxygen and biomass.
38 39

05 LEADERSHIP
TEAM CONTINUED
DON SCHOFIELD
GENERAL MANAGER,
NEW PROJECTS
Don Schofield has extensive
global experience in founding
mining related private and public
companies and has served in
roles including Managing Director,
General Manager, Mine Manager,
Operations Manager, Exploration
Manager and Project Manager
within the petroleum, coal bed
methane, mineral exploration,
mining and drilling industries. He
was also previously involved in some
of the early UCG work performed in
the USA in the early 1980s.
Don’s qualifications include
Bachelor of Science majoring
in mining engineering and
geology and a Master of Arts in
sedimentation and marine geology.
At Linc Energy, Don is responsible
for New Projects including Linc
Energy’s expansion into the United
States and the evaluation of
petroleum exploration potential
of the organisation’s seven
Petroleum Exploration Licences
in South Australia.
40
KIM FRANKS
MANAGER,
HUMAN RESOURCES
Kim Franks joined Linc Energy
in August 2007 and is the driver
behind creating the company’s
world-class team. She has a
wealth of human resources
experience, working in large global
organisations, as well as medium
sized enterprise.
Her past experience includes
human resources roles with Nicol
Robinson Halletts Lawyers and
Deloitte Consulting.
Kim holds a Bachelor of Commerce
from Griffith University with a
double major in Organisational
Behaviour and Human Resources
Management and Industrial
Relations. Kim is also a member
of the Australian Human
Resources Institute.
JANELLE VAN DE VELDE
MANAGER, INVESTOR
RELATIONS AND CORPORATE
COMMUNICATIONS
Janelle van de Velde has nearly
20 years’ experience working for
publicly-listed companies. Having
previously worked for Ergon Energy,
she has a diverse perspective of
the energy industry. Her previous
experience also includes the role of
General Manager of a multi-million
dollar sporting facility.
Janelle joined Linc Energy in August
2006 with the focus to develop
and implement investor relations
programs to keep investors and
business associates informed
as Linc Energy’s vision unfolds.
She is responsible for ensuring
the organisation has a cohesive
and coordinated stakeholder
engagement strategy to result
in positive or mutually beneficial
outcomes for the business
and its operations.
UCG Generator 3 at Linc Energy’s Chinchilla Demonstration Facility.

06
DIRECTORS’
REPORT
The Directors present their report on the consolidated
entity (referred to hereafter as the Group) consisting of Linc
Energy Ltd (the Company) and the entities it controlled at
the end of, or during, the year ended 30 June 2009.
Directors
Unless otherwise stated, the following persons were
Directors of the Company during the whole of the financial
year and up to the date of this report:
• Mr B. Johnson (Chairman)
• Mr P. Bond (Managing Director)
• Mr K. Dark (Non-Executive Director)
Qualifications and experience of
Directors and Company Secretary
Further information in relation to the qualifications and
experience of the Directors and Company Secretary is set
out on pages 36 to 40.
Principal activities
During the period the principal continuing activities of the
Group consisted of:
• Exploration for coal resources; and
• Development and commercialisation of coal to
liquids processes through the combined utilisation
of Underground Coal Gasification (UCG) and Gas to
Liquids (GTL) technologies.
UCG and GTL technologies when combined can
economically convert deep underground coal deposits into
cleaner, sulphur-free diesel and jet fuels.
There were no significant changes in the nature of the
activities of the Group during the year.
Dividends - Linc Energy Ltd
No dividends were declared or paid by the Company during
the year or up to the date of this report.
Review of operations
Information on the operations of the Group and its business
strategies and prospects is set out in the Review of
Operations on pages 26 to 35 of this Annual Report.
The Group recorded a net loss attributable to equity holders
of Linc Energy Ltd of $42,176,000 for the year ended 30
June 2009 (2008: $4,244,000). Basic and diluted earnings
per share amounted to a loss of 10.36 cents per share (2008:
loss of 1.21 cents). Included in the net loss was $15,153,000
(2008: $Nil) of non-cash amortisation expenses attributable
to the coal to liquids development costs intangible asset.
This asset has been estimated to have a useful life of three
years, with ongoing development expenditure having been
expensed as incurred since the commissioning of the
Chinchilla Demonstration Facility in October 2008.
The Group experienced a significant increase in staff
numbers during the financial year as it ramped up its UCG
and GTL technology and operations teams and strengthened
the corporate support functions throughout the business.
Staff numbers increased from less than 20 at the beginning
of 2008 to over 100 during the current year, with employee
benefits expenses increasing from $6,720,000 in 2008 to
$22,334,000 in 2009. Included within this amount were
non-cash share-based payments of $9,172,000 (2008:
$3,446,000) reflecting the fair value of options granted to
new staff under the Employee Option Plan in the current
and prior years. The value of these grants is expensed over
the three year vesting period with a higher amount of the
expense included in the initial years due to the differing
lengths of the vesting periods for each tranche of each
grant. Refer to note 27 to the financial statements for more
information about the Linc Energy Employee Option Plan.
At 30 June 2009 the Group had net assets of $154,737,000
(2008: $146,900,000). Total liabilities at 30 June 2009 were
$24,164,000 (2008: $21,320,000), of which $13,091,000
(2008: $Nil) related to convertible notes outstanding
at year end.
Significant changes in the
state of affairs
Significant changes in the state of affairs of the Group
during the year were as follows:
• Completion of the placement of 27,027,027 shares on 2
July 2008 raising $100,000,000
• Purchase of new shares representing an additional
13 per cent interest in JSPC Yerostigaz for $368,000
• Acquisition of all the issued capital of SAPEX Limited via
an off-market scheme of arrangement at a total cost of
$102,151,000
• Placement of 5,862,069 shares on 14 October 2008
raising $17,000,000
• The Company entered into a convertible note facility
agreement totalling $36,000,000 with investment bank
BBY Limited. Twenty-two notes were drawn down during
the year providing total funding of $20,200,000, net
of fees. Nine notes were converted to shares during
the year.
Matters subsequent to the end
of the financial year
On 3 August 2009 the Company announced that it had
raised $57,400,000 via the completion of a share placement
to sophisticated investors of 41,000,000 shares at $1.40 per
share. On 16 September the Company announced it had
raised a further $7,708,000 (5,505,998 shares) from eligible
shareholders via a share purchase plan.
In conjunction with the share placement, on 31 July 2009
the Company agreed with BBY Limited and the respective
note holders to redeem nine convertible notes that were
outstanding at 30 June 2009. The cash cost of redemption
of the notes was paid out of the proceeds of the share
placement and totalled $10,890,000, representing a face
value of $9,000,000 million, accrued interest of $240,000
and redemption fees of $1,650,000.
On 4 September 2009 the Company announced it
had completed the acquisition of 92,059 acres of coal
tenements in the Powder River Basin in the state of
Wyoming, USA, from Gastech Inc, for the purposes
of exploration and commercial exploitation via UCG.
The acquisition had a total cost of US$5,162,086
(AUD$6,231,393).
There were no other matters subsequent to the end
of the financial year that may impact the Group’s
future operations.
Likely developments and expected
results of operations
Comments on likely developments and expected results of
operations of the Group are included in this Annual Report
under the Review of Operations section on pages 26 to 35.
Further information on likely developments in the operations
of the Group and the expected results of operations have
not been included in this Annual Report because the
Directors believe it would be likely to result in unreasonable
prejudice to the Group.
42 43

06 DIRECTORS’
REPORT CONTINUED
Environmental regulation
The Group is subject to significant environmental
requirements through State Government legislation in both
Queensland and South Australia.
In Queensland, the Group must comply with the
Environmental Protection Act 1994 (EP Act) for
exploration and UCG activities. The EP Act regulates the
environmental performance of the Group when conducting
environmentally relevant activities (which include mining by
UCG and gas processing). The Group has environmental
licences issued for exploration tenements and the
Chinchilla Demonstration Facility.
In South Australia, the Group’s activities are currently limited
to exploration. Environmental regulation of UCG exploration
activities are controlled through the Petroleum Act 2000
and the Petroleum Regulations 2000. The Group has
approved Statements of Environmental Objectives (SEO’s)
and Environmental Impact Reports (EIR’s) for exploration in
the Arckaringa and Walloway Basins.
The Group has complied with its environmental obligations.
Further comments on the Group’s environmental
management activities can be found in the Review
of Operations on pages 29 to 30.
Meetings of Directors
The numbers of meetings of the Company’s Board of
Directors and of each board committee held during the
year ended 30 June 2009, and the numbers of meetings
attended by each director were:
Full meetings
of Directors
Meetings of
Audit and Risk
Committee
A B A B
B. Johnson 8 8 2 2
P. Bond 8 8 2 2
K. Dark 8 8 2 2
A = Number of meetings attended
B = Number of meetings held during the time the director
held office or was a member of the committee
Other Directors’ information
Director
Other current
directorships
B. Johnson EnviroGold
Limited,
TransPacific
Capital Pty Ltd,
Resource
Equities Limited,
Former
directorships
in the last 3
years
Mount Gibson
Iron Limited
Special
responsibilities
Audit and Risk
Committee
member
P. Bond Newtron Pty Ltd None Managing
Director and
Chief Executive
Officer, Audit
and Risk
Committee
member
K. Dark None None Audit and Risk
Committee
Chairman
Retirement, election and continuation
in office of Directors
Mr Ken Dark retires by rotation at the Annual General
Meeting and, being eligible, offers himself for re-election.
REMUNERATION REPORT (audited)
The remuneration report is set out below under the
following main headings:
A. Principles used to determine the amount
and nature of remuneration
B. Key management personnel
C. Service agreements
D. Details of remuneration
E. Share-based compensation.
A. Principles used to determine the nature
and amount of remuneration
The objective of the Group is to ensure that the level and
composition of remuneration is sufficient and reasonable
and that its relationship to corporate and individual
performance is defined. Accordingly the Group has adopted
remuneration policies that attract and retain talented and
motivated Directors and employees so as to encourage
enhanced performance of the Group. It is important that
there be a clear relationship between performance and
remuneration, and that the policy underlying executive
remuneration be understood by investors.
The Board aims to ensure that executive reward satisfies the
following key criteria as part of its good governance practices:
• Competitiveness and reasonableness;
• Acceptability to shareholders;
• Performance linkage/alignment of executive
compensation; and
• Deliver a balanced solution addressing all elements
of total remuneration.
In consultation with external remuneration consultants
(where appropriate), the Group has structured an executive
remuneration framework that is market competitive and
complementary to the strategies of the organisation. The
framework may provide a mix of fixed and variable pay, and
a blend of short and long-term incentives. As executives
gain seniority within the Group, the balance of this mix
shifts to a higher proportion of ‘at risk’ rewards.
Non-Executive Directors
Fees and payments to Non-Executive Directors reflect the
demands which are made on, and the responsibilities of,
the Directors. Non-Executive Directors’ fees and payments
are reviewed annually by the Board.
Directors’ fees
The current base remuneration was last reviewed with effect
from the Company’s debut on the ASX in May 2006. The
Chairman’s remuneration of $50,000 per annum is inclusive
of committee fees while Non-Executive Directors who chair a
committee may receive additional yearly fees. Non-Executive
Directors’ fees are determined within an aggregate Directors’
fee pool limit, which is periodically recommended for
approval by shareholders. The maximum base salary for
non-executive directors currently stands at $40,000 per
director (other than the Chairman).
Executive pay
The executive pay and reward framework has four
components: base pay and benefits; performance-related
bonuses; long-term incentives through participation in
the Linc Energy Ltd Employee Option Plan; and other
remuneration such as superannuation. The combination
of these comprises the executive’s total remuneration.
Base pay and benefits
Base pay is structured as a total employment cost package
which may be delivered as a combination of cash and
prescribed non financial benefits at the executives’
discretion. Executives are offered a competitive base pay
that comprises the fixed component of pay and rewards.
External remuneration consultants and data provide analysis
and advice to ensure base pay is set to reflect the market
for a comparable role. Base pay for senior executives is
reviewed annually to assess whether the executive’s pay
is competitive with the market. An executive’s pay is also
reviewed on promotion. There are no guaranteed base pay
increases included in any senior executives’ contracts. As
part of their base pay arrangements, executives may receive
benefits including motor vehicles, car parking, professional
memberships and conferences.
Performance-related bonuses
The Group has not provided for performance-related
bonuses in the current financial year and its intention is
that it is unlikely to do so until the Company becomes
income generating. A formal short-term incentive program
may be introduced at that point in time.
44 45

06 DIRECTORS’
REPORT CONTINUED
REMUNERATION REPORT (audited) continued
B. Key management personnel
The following table sets out the persons who were either Directors, key management personnel or one
of the five highest remunerated executives of the Group for the financial year.
Name Position Employment period
2009
B. Johnson Chairman Full year
P. Bond Managing Director Full year
K. Dark Non-Executive Director Full year
B. Bertolo Chief Financial Officer Ceased 21 Apr 2009
R. Stratford Chief Financial Officer Commenced 20 Apr 2009
S. Dumble Chief Operating Officer Full year
J. Peters General Manager
Government and
Business Development
Full year
C. Ricato General Counsel
and Company Secretary
Full year
K. Terblanche General Manager Gas to Liquids Commenced 17 Dec 2008
2008
B. Johnson Chairman Full year
P. Bond Managing Director Full year
K. Dark Non-Executive Director Full year
B. Bertolo Chief Financial Officer Commenced 17 Dec 2007
S. Dumble Chief Operating Officer Commenced 04 Feb 2008
J. Peters General Manager
Government and
Business Development
Full year
C. Ricato General Counsel
and Company Secretary
Commenced 12 Mar 2008
D. Schofield General Manager Underground
Coal Gasification
Commenced 19 Nov 2007
J. van de Velde Manager Investor Relations
and Corporate Communications
Full year
C. Service agreements
Remuneration and other terms of employment for the Directors and the other key management personnel are formalised in
service agreements.
The major provisions of these agreements, including termination provisions are set out below:
Name Duration Conditions Termination
B. Johnson Two year
contract.
P. Bond Three year
contract.
K. Dark Two year
contract.
B. Bertolo Full time
employment.
R. Stratford Three year
contract.
S. Dumble Three year
contract.
J. Peters Full time
employment.
C. Ricato Three year
contract.
K. Terblanche Full time
employment.
Director’s Fees of $50,000 per annum as
fixed by shareholders in general meeting.
Eligibility to participate in the Company’s
Employee Option plan.
Base salary, inclusive of superannuation
of $250,000 to be reviewed annually
by the Board.
Director’s Fees of $40,000 per annum plus
9% superannuation as fixed by shareholders
in general meeting. Eligibility to participate
in the Company’s Employee Option plan.
Base salary, exclusive of superannuation
of $280,000 plus 9% superannuation to
be reviewed on a periodic basis. Eligibility
to participate in the Company’s Employee
Option plan.
Base salary, exclusive of superannuation
of $260,000 plus 9% superannuation to
be reviewed on a periodic basis. Eligibility
to participate in the Company’s Employee
Option plan.
Base salary, exclusive of superannuation
of $305,000 plus 9% superannuation to
be reviewed on a periodic basis. Eligibility
to participate in the Company’s Employee
Option plan.
Base salary, exclusive of superannuation
of $240,000 plus 9% superannuation to
be reviewed on a periodic basis. Eligibility
to participate in the Company’s Employee
Option plan.
Base salary, exclusive of superannuation
of $260,000 plus 9% superannuation to
be reviewed on a periodic basis. Eligibility
to participate in the Company’s Employee
Option plan.
Base salary, exclusive of superannuation
of $257,000 plus 9% superannuation to
be reviewed on a periodic basis. Eligibility
to participate in the Company’s Employee
Option plan.
Not eligible for any termination
benefit.
Termination payment equivalent
to six months’ remuneration.
Not eligible for any
termination benefit.
Maximum equivalent
to nine months’ salary.
Maximum equivalent
to six months’ salary.
Maximum equivalent
to six months’ salary.
Not eligible for any termination
benefit.
Maximum payment equivalent
to six months’ salary.
Not eligible for any termination
benefit.
46 47

06 DIRECTORS’
REPORT CONTINUED
REMUNERATION REPORT (audited) continued
D. Details of remuneration
Amounts of remuneration
Details of the remuneration of the Directors and the other key management personnel of the Group are set out
in the following tables.
Name
Cash salary
and fees
Short-term
Nonmonetary
benefits
Postemployment
Superannuation
Long-term
benefits
Share-based
payments
Long Service
leave Options 1 Total
Remuneration
consisting
of options
$ $ $ $ $ $ %
2009
B. Johnson 50,000 - - - 127,435 177,435 71.8
K. Dark 40,000 - 3,600 - 76,461 120,061 63.7
P. Bond 229,359 46,268 20,642 - - 296,269 -
B. Bertolo 217,735 9,149 19,336 - 483,710 729,930 66.3
R. Stratford 50,000 - 4,500 120 109,985 164,605 66.8
S. Dumble 301,827 34,336 27,164 1,736 725,565 1,090,628 66.5
J. Peters 247,692 - 22,292 4,240 187,974 462,198 40.7
C. Ricato 245,385 11,005 22,085 1,576 547,406 827,457 66.2
K.Terblanche 131,635 15,312 11,847 306 705,456 864,556 81.6
1,513,633 116,070 131,466 7,978 2,963,992 4,733,139 62.6
2008
B. Johnson 62,500 - - - 279,227 341,727 81.7
K. Dark 46,667 - 4,200 - 167,878 218,745 76.7
P. Bond 229,358 6 20,462 - - 249,826 -
B. Bertolo 132,462 4 11,922 - 568,258 712,646 79.7
S. Dumble 102,308 12,090 9,208 - 568,258 691,864 82.1
J. Peters 188,077 - 16,927 - 225,597 430,601 52.4
C. Ricato 57,538 4 5,178 - 121,202 183,922 65.9
D. Schofield 115,385 9,118 10,385 - 230,375 365,263 63.1
J. van de Velde 117,135 8 10,542 - 115,572 243,257 47.5
1,051,430 21,230 88,824 - 2,276,367 3,437,851 66.2
1 The values shown in the table above for share-based payments reflects the fair value of the share-based payment recognised as an expense for each
person during the year.
E. Share-based compensation
Employee option plan
The establishment of the Linc Energy Ltd Employee Option Plan was approved by shareholders at the 2005 Annual
General Meeting. Options are granted at the discretion of the Board in accordance with the rules of the plan and all staff
employed by the Company or its subsidiaries are eligible to participate in the plan.
As determined by the Board, a minimum continuous period of employment (usually twelve months) with the Company
or any of its subsidiaries must be served prior to the first exercise date, which falls on 31 December annually. The option
exercise price is set at the discretion of the Board, but is generally the ten day VWAP following commencement of
employment with the Group. Subject to ongoing employment by the Company or any of its subsidiaries, options vest
and are exercisable over three consecutive years from the initial exercise date, with one third of the total options awarded
vesting and exercisable each year. An additional number of options may be granted, with the options exercisable at
the end of the fourth year.
Options granted under the plan carry no dividend or voting rights. When exercisable, each option has a life of two years
and is convertible into one ordinary share. The options were provided at no cost to the recipients.
Option holdings and grants
Set out below is a summary of the options granted as compensation under the Employee Option Plan to key management
personnel of the Group during the reporting period.
Name
Number
of options
granted
during 2009
Grant
date
Vesting
date
Expiry
date 1
Fair value
per option
at grant
date
Exercise
price
Number
of options
vested during
2009
Number Number
2009
J. Peters 100,000 1 Jul 2008 31 Dec 2011 31 Dec 2013 1.47 3.16 -
K. Terblanche 666,667 17 Dec 2008 31 Dec 2009 31 Dec 2011 0.78 1.91 -
666,667 17 Dec 2008 31 Dec 2010 31 Dec 2012 0.79 1.91 -
666,666 17 Dec 2008 31 Dec 2011 31 Dec 2013 0.78 1.91 -
R. Stratford 666,667 20 Apr 2009 31 Dec 2010 31 Dec 2012 0.80 2.35 -
666,667 20 Apr 2009 31 Dec 2011 31 Dec 2013 0.80 2.35 -
666,666
4,100,000
20 Apr 2009 31 Dec 2012 31 Dec 2014 0.77 2.35 -
1 Options vest and are exercisable over three consecutive years from the initial exercise date, with one third of the total options awarded vesting and
exercisable at 31 December each year following completion of a minimum service period, usually twelve months. Where an employee has been
employed for greater than three years, an additional award of options may be granted at the discretion of the Board in the employee’s fourth year.
No options have been granted to Directors or key management personnel since the end of the financial year.
48 49

06 DIRECTORS’
REPORT CONTINUED
REMUNERATION REPORT (audited) continued
Fair value of options granted
The assessed fair value at grant date of options granted to Directors and key management personnel during the year
ended 30 June 2009 varied between $0.77 and $1.47 per option. The fair value at grant date is independently determined
using a Monte-Carlo option pricing model that takes into account the exercise price, the term of the option, the share price
at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate
for the term of the option.
The model inputs for options granted during the year ended 30 June 2009 included:
• Options are granted for no consideration, have a three year life, and 33 per cent of each tranche is exercisable on 31
December annually following the completion of a minimum continuous period of employment (usually twelve months);
• Exercise prices range from $1.91 to $3.16;
• Grant dates range from 01 July 2008 to 20 April 2009;
• Expiry dates: 31 December 2011, 31 December 2012, 31 December 2013 and 31 December 2014;
• Share prices at grant dates range from $2.00 to $3.69;
• Expected price volatility of Linc Energy’s shares: 75 per cent;
• Expected dividend yield: 0 per cent; and
• Risk free interest rate: based on Australian Government 5 year bond rates ranging from 3.17 to 6.61 per cent.
The expected price volatility is based on the historic volatility adjusted for any expected changes to future volatility due
to publicly available information.
Set out below is a summary of the number of options granted under the Employee Option Plan to key management
personnel of the Group and held at the end of the financial year.
Name
Expiry
date 1
Exercise
price
range
Balance
at start
of year Granted Exercised Disposed 2 Forfeited
Balance at
end of year
$ Number Number Number Number Number Number
2009
B. Johnson 31 Dec 2011 0.25 5,000,000 - - (584,000) - 4,416,000
K. Dark 31 Dec 2011 0.25 3,000,000 - (1,000,000) - - 2,000,000
P. Bond - - - - - - -
B. Bertolo 31 Dec 2012 0.76 5,000,000 - (400,000) (1,266,667) (3,333,333) -
R. Stratford 31 Dec 2014 2.35 - 2,000,000 - - - 2,000,000
S. Dumble 31 Dec 2012 0.76 5,000,000 - (166,667) - - 4,833,333
J. Peters 31 Dec 2012 0.25 to 0.60 2,400,000 100,000 (240,000) - - 2,260,000
C. Ricato 31 Dec 2012 0.70 1,500,000 - - - - 1,500,000
K. Terblanche 31 Dec 2013 1.91 - 2,000,000 - - - 2,000,000
21,900,000 4,100,000 (1,806,667) (1,850,667) (3,333,333) 19,009,333
Weighted average exercise price $ 0.53 2.15 0.41 0.60 0.76 0.91
2008
B. Johnson 31 Dec 2011 0.25 5,000,000 - - - - 5,000,000
K. Dark 31 Dec 2011 0.25 3,000,000 - - - - 3,000,000
P. Bond - - - - - - -
B. Bertolo 31 Dec 2012 0.76 - 5,000,000 - - - 5,000,000
S. Dumble 31 Dec 2012 0.76 - 5,000,000 - - - 5,000,000
J. Peters 31 Dec 2012 0.25 to 0.60 2,500,000 - (100,000) - - 2,400,000
C. Ricato 31 Dec 2012 0.70 - 1,500,000 - - - 1,500,000
D. Schofield 31 Dec 2012 0.76 - 2,000,000 - - - 2,000,000
J. van de
Velde
31 Dec 2012 0.25 to 0.60 1,000,000 600,000 (82,000) - - 1,518,000
11,500,000 14,100,000 (182,000) - - 25,418,000
Weighted average exercise price $ 0.28 0.80 0.25 - - 0.54
1 Options vest and are exercisable over three consecutive years from the initial exercise date, with one third of the total options awarded vesting and
exercisable at 31 December each year following completion of a minimum service period, usually twelve months. The expiry date disclosed is the expiry
date of the third and final tranche of options.
2 In accordance with a resolution of the Board, employees may dispose of their vested options to a third party. The third party remains subject to the
employee option plan rules in respect of options held.
50 51

06 DIRECTORS’
REPORT CONTINUED
REMUNERATION REPORT (audited) continued
Exercise of options granted as compensation
During the reporting period, the following shares were issued on the exercise of options previously granted as
compensation to key management personnel:
Number of
shares
Amount paid
per share
Directors
K. Dark
Key management personnel
1,000,000 0.25
B. Bertolo (including options disposed to a third party and subsequently exercised) 1,666,667 0.76
S. Dumble 166,667 0.76
J. Peters 240,000 0.25
There were no amounts unpaid on the shares issued as a result of the exercise of the options in the 2009 financial year.
Option values
The options over ordinary shares in the Company held at the end of the financial year by each Director and other key
management personnel of the Group, including their personally related parties, are set out below. In the table below,
the values shown for the categories of options granted, options exercised and options lapsed during the year reflect
the total amount of share-based payment expense recognised for each person.
Name
Balance at
the end of
the year
Vested at the
end of the
year
Unvested at
the end of
the year
Value of
options
granted
during the
year
Value of
options
exercised
during the
year
Value of
options
disposed
during the
year
Value of
options
lapsed
during the
year
Number Number Number $ $ $ $
2009
B. Johnson 4,416,000 2,749,334 1,666,666 - - 68,195 -
P. Bond - - - - - - -
K. Dark 2,000,000 1,000,000 1,000,000 - 116,772 - -
B. Bertolo - - - - 126,760 401,405 1,215,100
R. Stratford 2,000,000 - 2,000,000 1,577,600 - - -
S. Dumble 4,833,333 1,500,000 3,333,333 - 52,817 - -
J. Peters 2,260,000 993,334 1,266,666 147,450 28,025 - -
C. Ricato 1,500,000 500,000 1,000,000 - - - -
K. Terblanche 2,000,000 - 2,000,000 1,566,467 - - -
19,009,333 6,742,668 12,266,665 3,291,517 324,374 469,600 1,215,100
2008
B. Johnson 5,000,000 1,666,667 3,333,333 - - - -
P. Bond - - - - - - -
K. Dark 3,000,000 1,000,000 2,000,000 - - - -
B. Bertolo 5,000,000 - 5,000,000 1,741,521 - - -
S. Dumble 5,000,000 - 5,000,000 1,741,521 - - -
J. Peters 2,400,000 400,000 2,000,000 - 24,652 - -
C. Ricato 1,500,000 - 1,500,000 1,599,524 - - -
D. Schofield 2,000,000 - 2,000,000 706,022 - - -
J. van de Velde 1,518,000 251,334 1,266,666 188,314 4,102 - -
25,418,000 3,318,001 22,099,999 5,976,902 28,754 - -
52 53

06 DIRECTORS’
REPORT CONTINUED
REMUNERATION REPORT (audited) continued
Employee share plan
A scheme under which shares may be issued by the Company to employees for no cash consideration was approved
by shareholders at the 2005 Annual General Meeting. Staff are eligible to participate in the plan if they have been
continuously employed by Linc Energy for a period of one year. Shares are granted at the discretion of the Board
in accordance with the rules of the plan.
The Board may offer shares for subscription or acquisition under the plan for consideration (if any) determined by the
Board. The Board may also impose disposal restrictions as it sees fit on any shares acquired under the plan. Shares
to be issued under the plan will be valued at the volume weighted average share price of shares traded on the ASX
in the ordinary course of trading during the five business days immediately preceding the day the shares are issued
or transferred to the employee.
The shares granted under this plan will rank equally in all respects with existing shares from the date of allotment,
including voting rights, distributions, dividends, future rights and bonus issues. No shares have been issued under
the plan in the current financial year.
Shareholdings
The numbers of shares in the Company held during the financial year by each Director and other key management
personnel of the Group are set out below. There were no shares granted during the reporting period as compensation.
Name
Balance at
the start of
the year Additions Disposals
Balance at
the end of
the year
Number Number Number Number
Ordinary shares
2009
B. Johnson 2,000,000 - (1,000,000) 1,000,000
P. Bond1 201,557,383 - - 201,557,383
K. Dark 200,503 1,000,000 (378,000) 822,503
B. Bertolo - 400,000 (400,000) -
R. Stratford - - - -
S. Dumble - 166,667 (166,667) -
J. Peters 100,000 240,000 (299,520) 40,480
C. Ricato - - - -
K. Terblanche - - - -
203,857,886 1,806,667 (2,244,187) 203,420,366
2008
B. Johnson 2,000,000 - - 2,000,000
P. Bond 202,757,383 - (1,200,000) 201,557,383
K. Dark 150,617 80,503 (30,617) 200,503
B. Bertolo - - - -
S. Dumble - - - -
J. Peters - 100,000 - 100,000
C. Ricato - - - -
D. Schofield - - - -
J. van de Velde - 82,000 - 82,000
204,908,000 262,503 (1,230,617) 203,939,886
1 Mr Bond’s shares are held via Newtron Pty Ltd or its nominees.
54 55

06 DIRECTORS’
REPORT CONTINUED
Loans to Directors and executives
There are no loans to any Directors or executives.
Insurance of officers
Linc Energy Ltd has obtained Directors and Officers Liability Insurance. The policy covers Directors and Officers Liability,
Company Reimbursements and Company Securities Claim Liability. The limit of liability is $10,000,000 and the cover
expires on 30 September 2009. The Directors are currently in the process of renewing this policy.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought
against the officers in their capacity as officers of the Company, and any other payments arising from liabilities incurred
by the officers in connection with such proceedings. This does not include such liabilities that arise from conduct involving
a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage
for themselves or someone else or to cause detriment to the Company. It is not possible to apportion the premium
between amounts relating to the insurance against legal costs and those relating to other liabilities.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings. No proceedings have been brought or
intervened in on behalf of the Company with leave of the Court under section 237 of the Corporations Act 2001.
Share options
At the date of this report, total unissued ordinary shares of the Company under option are:
Expiry date Exercise price range Number of shares
31 December 2009 $0.25 1,998,001
16 April 2010 $0.76 80,000
30 June 2010 $0.66 319,206
31 December 2010 $0.25 to $0.76 6,851,673
25 June 2011 $0.76 3,000,000
31 December 2011 $0.25 to $3.16 14,136,680
31 December 2012 $0.25 to $3.16 9,765,669
31 December 2013 $0.59 to $3.16 5,273,648
31 December 2014 $1.34 to $3.16 1,711,995
Total 43,136,872
The options do not entitle the holder to participate in any share issue of the Company.
Share buy-back
There is no current on-market buy-back.
Brian Johnson
Chairman
24 September 2009
56 57
Auditor
Following a competitive tender process, KPMG was appointed as auditor at the Annual General Meeting on 27 November
2008 and continues in office in accordance with section 327 of the Corporations Act 2001.
Non-audit services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s
expertise and experience with the Company is important. The Board of Directors has considered the non-audit services
provided during the year by the auditor and in accordance with the written advice of the Audit and Risk Management
Committee, is satisfied that the provision of those non-audit services during the year by the auditor is compatible with,
and did not compromise, the auditor independence requirements of the Corporations Act 2001 for the following reasons:
• All non-audit services were subject to the corporate governance procedures adopted by the Company and have been reviewed
by the Audit and Risk Management Committee to ensure they do not impact the integrity and objectivity of the auditor; and
• the non-audit services provided do not undermine the general principles relating to auditor independence as set out
in APES 110 Code of Ethics for Professional Accountants as they did not involve reviewing or auditing the auditor’s
own work, acting in a management or decision-making capacity for the Company, acting as an advocate for
the Company or jointly sharing risks and rewards.
During the year the following fees were paid or payable for audit and non-audit services provided by the auditor
of the Company, its related practices and non related audit firms:
2009
$
Audit services
Services provided by KPMG in respect of the audit and review of financial reports and other
audit work under the Corporations Act 2001
152,935 -
Other auditors:
Audit and review of financial reports (PricewaterhouseCoopers Australia)
Non-audit services
69,050 188,300
Consulting services provided by PricewaterhouseCoopers Australia - 121,000
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 68.
Rounding of amounts
The Company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments
Commission, relating to the ‘rounding off’ of amounts in the Directors’ Report. Amounts in the Directors’ Report have been
rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.
This report is made in accordance with a resolution of the Directors.
2008
$

07CORPORATE
GOVERNANCE
STATEMENT
Linc Energy’s approach to Corporate Governance:
Compliance with the ASX Principles
The Linc Energy Board (the Board) is committed to best
practice standards of governance underpinning how Linc
Energy conducts its business. Linc Energy has chosen
early adoption of the ASX ‘Corporate Governance Council,
Corporate Governance Principles and Recommendations –
2nd Edition’ (ASX Principles) issued in August 2007.
The Board considers that Linc Energy complies with
the ASX Principles and this statement provides details
as to how the Company addresses each principle and
describes Linc Energy’s response.
ASX Principles are derived from:
Principle 1: Lay solid foundations for management
and oversight
Principle 2: Structure the Board to add value
Principle 3: Promote ethical and responsible
decision-making
Principle 4: Safeguard integrity in financial reporting
Principle 5: Make timely and balanced disclosure
Principle 6: Respect the rights of shareholders
Principle 7: Recognise and manage risk
Principle 8: Remunerate fairly and responsibly
The Board’s philosophy is to adopt principles, practices
and recommendations that are in the best interests of Linc
Energy’s stakeholders. Consistent with the ASX Principles,
Linc Energy’s corporate governance practices are regularly
reviewed and are available on Linc Energy’s website.
Recommendation 1.1 – Companies should establish the
functions reserved to the Board and those delegated to
the Executive Team (Role of Board and management).
The Board is responsible for the governance of Linc Energy.
The role of the Board is to provide overall strategic guidance
and effective oversight of management. The Board derives its
authority to act from Linc Energy’s constitution. The Board’s
responsibilities are encompassed in a formal Charter published
on Linc Energy’s website. The Charter is reviewed annually to
determine whether any changes are necessary or desirable.
The major powers the Board has reserved to itself are:
• Reviewing and approving Linc Energy’s strategic
plans and performance objectives and reviewing
the underlying assumptions and rationale;
• Monitoring financial outcomes and the integrity of
reporting, and in particular, approving annual budgets
and longer-term strategic and business plans;
• Monitoring the effectiveness of Linc Energy’s audit,
risk management and compliance systems that are in
place to protect Linc Energy’s assets and to minimise
the possibility of Linc Energy operating beyond
acceptable risk parameters;
• Monitoring compliance with legislative and regulatory
requirements (including continuous disclosure) and
ethical standards, including reviewing and ratifying
codes of conduct and compliance systems;
• Selecting, appointing and monitoring the performance
of the Chief Executive Officer (CEO), and if appropriate,
terminating the appointment of the CEO;
• Reviewing senior management succession planning
and development;
• Reviewing and recommending to shareholders the
appointment or if appropriate the termination of the
appointment of the external auditor; and
• Monitoring the timeliness and effectiveness of reporting
to shareholders.
To assist it in carrying out its responsibilities the Board has
established two standing committees of its members.
They are:
• The full Board that deals with, People and Performance
(see Principle 2) Safety, Sustainability and Corporate
Responsibility (see Principle 7); and
• Audit and Risk Management Committee (see Principle 4).
The timetables for Board and Committee meetings are
agreed annually to ensure that the Board and individual
Directors dedicate sufficient and appropriate time to
reviewing and overseeing Linc Energy’s business.
New Directors
New Directors receive a formal letter of appointment along
with an induction pack. The contents of the appointment
letter and induction pack contain sufficient information
to allow the new Director to gain an understanding of:
• Linc Energy’s financial, strategic, operational and risk
management position;
• The rights, duties and responsibilities of Directors;
• The roles and responsibilities of the Executive Team; and
• The role of Board Committees.
Delegation to the CEO
The Board delegates to the CEO, responsibility for
implementing Linc Energy’s strategic direction and for
managing Linc Energy’s day-to-day operations. Clear lines
of communication have been established between the
Chairman and the CEO to ensure that the responsibilities
and accountabilities of each are clearly understood.
Specific limits on the authority delegated to the CEO and
other officers and management of Linc Energy are set out
in the Delegated Authorities Manual approved by the Board.
Recommendation 1.2 – Companies should disclose
the process for evaluating the performance of the
Executive Team (Performance evaluation)
All Executive Team members have formal position
descriptions and each year key performance measures
are established in line with their roles and responsibilities.
The CEO has personal objectives, as well as objectives
related to business units and Linc Energy as a whole.
The Chairman, together with the full Board, assess the
performance of the CEO against those objectives on an
annual basis, or more frequently if required. The Board
also monitors the performance of the Chief Operating
Officer (COO), Chief Financial Officer (CFO), Company
Secretary and other members of the Executive Team.
Executive Team performance evaluations have been
conducted for the financial year ending 30 June 2009.
Details of the evaluation process and the linkages between
the result of performance evaluations and remuneration are
disclosed in the Remuneration Report on page 45 to 55
of this Annual Report.
Newly appointed executives
All newly appointed Executives receive formal letters of
appointment describing their terms of appointment, duties,
rights and responsibilities and entitlements on termination.
An induction program is in place to enable newly appointed
Executives to gain an understanding of:
• The Company’s financial position, strategies, operations
and risk management policies; and
• The respective rights, duties, responsibilities and roles
of the Board and the Executive Team.
58 59

07 CORPORATE
GOVERNANCE
STATEMENT CONTINUED
Compliance with the ASX Principles
Recommendation 1.2
Continued
Membership and expertise of the Board
The Board’s size and composition is subject to limits
imposed by Linc Energy’s constitution, which provides
for a minimum of three Directors and a maximum of eight.
The Board as at 30 June 2009 comprised two Non-
Executive Directors and one Executive Director. Steps are in
place in increase the Board to five members. The Managing
Director is the Executive Director and CEO of Linc Energy.
The Directors of Linc Energy at any time during the financial
year are listed with a brief description of their qualifications,
experience and special responsibilities on page 36 of
this Annual Report. The Board met eight times during
the financial year. Director’s attendances are set out
on page 44 of this Annual Report.
Recommendation 2.1 – The majority of the Board should
be independent Directors (Independent Decision-Making)
Directors have unfettered access to Linc Energy’s records
and information reasonably necessary to fulfil their
responsibilities. Directors also have access to the Company
Secretary on any matter relevant to their role as a Non-
Executive Director. In addition, the Board has access
to other relevant senior management to seek explanations
and information. Subject only to obtaining approval of
the Chairman, which may not be unreasonably withheld,
each Director has the added right to seek independent
professional advice at Linc Energy’s expense. Part of
each scheduled Board meeting is taken up in private
session (with only the Non-Executive Board members
present) to discuss management issues or matters
of a particularly sensitive nature.
Independent Directors
In accordance with the ASX Principles, the Board consists
of a majority of independent Directors. The structure of
the Board is as follows:
• Mr Brian Johnson (Chairman and independent Director);
• Mr Ken Dark (independent Director); and
• Mr Peter Bond (CEO and Managing Director).
Linc Energy considers an independent Director to be a
Director who does not have any material relationship with
Linc Energy that a reasonable person would consider
may influence the Director’s ability to:
• Objectively make decisions on matters that come
before the Board;
• Carry out their duties as a Director acting in the best
interest of the Company; or
• Be free of real or reasonably perceived conflict
of interests.
An individual who has held an Executive Team role within
Linc Energy, including that of Managing Director, may
not become Chairman or a Non-Executive Director for a
period of at least three years from the date the individual
ceased to be employed by Linc Energy. A principal of a
material professional adviser or consultant to Linc Energy,
or an employee materially associated with the provision
of such services, may not become Chairman or a Non-
Executive Director of the Company for a period of at
least three years from the date those services were last
provided. In assessing independence, the Board reviews
the relationship that the Director and their immediate family
have with the Company. In particular, the Board applies
the following criteria in determining independence:
• The extent of any relationship that exists with a substantial
shareholder or officer of an organisation holding more
than 5 per cent of the shares in Linc Energy;
• The extent of any relationship that exists either as
a principal, an employee or a major shareholder of
a supplier of goods or services to Linc Energy; and
• The extent of any relationship that exists either as
a principal, an employee or a major shareholder
of a customer of Linc Energy.
The Board regularly assesses the independence of Non-
Executive Directors and has specifically considered
the independence of all Non-Executive Directors, in
accordance with the above criteria, during the financial
year. The Board has determined that each Non-Executive
Director remains independent.
No Director has received or become entitled to receive
a benefit because of a contract between any company in
the Linc Energy Group and the Director, or a firm in which
the Director is a substantial member, or an entity in which
the Director has a substantial financial interest, other than:
In the case of Non-Executive Directors:
• Remuneration as disclosed in the Annual Report which
includes participation in the shareholder approved
Linc Energy Share Options Purchase Plan; and
• In the case of the CEO, a contract of employment
and associated entitlements.
Recommendation 2.2 – The Chair should be an
independent Director
The Board selects the Chairman. An individual who has
held an Executive Team role within Linc Energy, including
that of Managing Director, may not become Chairman
or a Non-Executive Director of the Company for a period
of at least three years from the date the individual ceased
to be employed by the Company. The Chairman is
currently Mr Brian Johnson who is a Non-Executive
and independent Director.
Recommendation 2.3 – The roles of Chair and Chief
Executive Officer should not be exercised by the
same individual.
The Chairman presides over the Board and general
meetings of Linc Energy. The Chairman has the task
of ensuring that the Board is well informed and effective,
and that the Directors, individually and as a group, have
the opportunity to air differences, explore ideas and
generate the collective views and wisdom necessary
for the proper operation of the Board and Linc Energy.
The Chairman must ensure that general meetings
are conducted efficiently, and that shareholders have
adequate opportunity to air their views and obtain
answers to their queries.
The role of Chairman and the role of Chief Executive Officer
are not exercised by the same individual.
As outlined above with reference to Recommendation
2.1, Mr Peter Bond is the CEO and Mr Brian Johnson
is the Chairman.
Recommendation 2.4 – The Board should establish
a nomination committee
A nomination committee has not been formally
established, however the full Board deals with all matters
that relate to People and Performance (equivalent to
a nomination committee) comprising two Non-Executive
and independent Directors. The Board has a formal Charter
that is reviewed regularly. A copy of that Charter is available
on Linc Energy’s website. A purpose of the full Board is
to review and ratify remuneration and people policies,
procedures and programs designed to:
• Meet long-term people needs through effective talent
management and succession planning;
• Achieve clear alignment between the needs and
requirements of key stakeholder groups (i.e. customers,
shareholders and communities) and the objectives
and values of Linc Energy people;
• Promoting excellent performance by implementing
appropriate remuneration and other policies to keep
employees committed and motivated;
• Promote Linc Energy as an employer of choice;
• Achieve compliance with relevant legislation and
corporate governance principles on remuneration
practices and employment policies; and
• Provide fair remuneration and other benefits to all
Linc Energy employees.
60 61

07 CORPORATE
GOVERNANCE
STATEMENT CONTINUED
Compliance with the ASX Principles
Recommendation 2.4
Continued
The Board is responsible for making recommendations
relating to the following matters:
• Reviewing strategic issues and commercial changes
that impact Linc Energy and the energy sector to
determine the most appropriate structure, size,
composition and tenure of the Board;
• Maintaining a healthy balance of skills, knowledge and
experience across the Board by recommending new
appointments and ongoing development for Directors;
• Determining Board performance assessment criteria
and assessing performance;
• Rewarding Directors responsibly and fairly for their
contributions to enhancing Linc Energy’s performance;
• Recommending to the Board appointment and removal
of Directors for the consideration of a general meeting
of shareholders; and
• Recommending in relation to Board succession,
planning and Director remuneration policy.
Recommendations relating to the CEO
• The recruitment, retention and termination policies
and procedures for the CEO;
• Setting and reviewing performance objectives for the
CEO and evaluating the contribution and effectiveness
of the CEO against those objectives; and
• Rewarding the CEO responsibly and fairly for his/her
contribution to enhancing Linc Energy’s performance.
Recommendations relating to the Executive Team
• Reviewing the CEO’s recommendations on
remuneration and reward for Linc Energy’s Executive
Team, and on succession plans for key senior positions
within Linc Energy;
• Maintaining a balance of skills, knowledge and
experience across the Executive Team, through
reviewing recommended structures, new appointments
and assessing ongoing leadership development;
• The recruitment, retention and termination policies
and procedures for members of the Executive Team;
• Providing counsel and guidance to the business in
relation to talent, succession planning and performance
management; and
• Monitoring remuneration policies and practices to
ensure they enable Linc Energy to attract and retain
people who create value for shareholders and who
uphold and develop the culture of Linc Energy.
The Board collectively and its members individually have
access to internal and external resources, including access
to advice from external consultants or specialists.
Recommendation 2.5 – Companies should disclose
the process for evaluating the performance of the Board,
its committees and individual Directors
The Board undertakes ongoing self-assessment and
review of its performance and of the performance of the
Chairman, individual Directors and Board Committees.
The performance review process conducted in 2009
included interviews with Directors, Group Executives
and the Company Secretary. These reviews were wide
ranging and included each Director’s contribution
to Board discussions.
The Board is currently developing a selection and
appointment procedure for new directors and the
re-election of incumbents. Details of the Board’s policy
on nomination and appointment of Directors will be
made publicly available on the Company’s website
once completed.
Recommendation 3.1 – Companies should establish a
Code of Conduct
Linc Energy has a Code of Conduct and legislative
compliance polices that deal with:
• Practices necessary to maintain confidence in
Linc Energy’s integrity;
• Practices necessary to take into account the legal
obligations and expectations of Linc Energy’s
stakeholders; and
• Responsibility and accountability of individuals for
reporting and investigating reports of unethical
practices.
The Code of Conduct applies to Directors as well as
Linc Energy employees. It is part of the induction pack for
new Directors. As part of their induction new Linc Energy
employees are required to confirm they have reviewed
and are aware of Linc Energy’s Code of Conduct. The
Code applies equally to all consultants and contractors to
Linc Energy. The Code provides a mechanism to enable
employees to report breaches of the Code without any fear
of retribution. Linc Energy’s Code of Conduct is available
on Linc Energy’s website.
Legislative compliance policies
Linc Energy has established policies that deal with
legislative compliance and governance. These policies
are published on Linc Energy’s website. Consistent
with its Code of Conduct, Linc Energy is committed to
the highest standards of integrity, fairness and ethical
conduct, including full compliance with all relevant legal
requirements. There is no circumstance under which it
is acceptable for Linc Energy or a person associated with
Linc Energy to knowingly or deliberately not comply with
the law or to act unethically in the course of performing
or advancing Linc Energy’s business. Behaviour of this
kind will lead to disciplinary measures that may include
dismissal. Any person who intentionally breaches the
law will not receive support from Linc Energy.
Recommendation 3.2 – Companies should establish
a policy concerning trading in securities by Directors,
Executive Team and employees
Linc Energy has a policy and set procedures on share
trading by Directors, senior executives and employees,
as well as conflicts of interest. The Linc Energy Board
and its employees are prohibited from dealing in, or
influencing others to deal in, securities of Linc Energy
or any related companies where:
• They possess information that is not generally available
to the market; and
• The information is potentially ‘price sensitive’ and, if it
were known to the market, may reasonably be expected
to have a material effect on the share price of the
Company. Additionally, Directors and senior managers
may only deal in Company shares during the four-week
periods immediately following the release of the halfyear
results, the full-year results and the Annual General
Meeting; and
• Linc Energy’s Share Trading Policy is circulated to all
Linc Energy personnel each year and is available on
the Company’s web site.
Recommendation 4.1 – The Board should establish an
audit committee
To assist it in carrying out its responsibilities the Board has
established an Audit and Risk Management Committee.
The primary function of the Committee is to assist the
Board in fulfilling its responsibilities to provide shareholders
with timely and reliable financial reports. This includes
protecting the interests of shareholders, customers,
employees and the broader community through the
effective identification, assessment, monitoring
and management of risks.
62 63

07 CORPORATE
GOVERNANCE
STATEMENT CONTINUED
Compliance with the ASX Principles
Continued
Recommendation 4.2 – The audit committee should be
appropriately structured
The Audit and Risk Management Committee comprises
two Non-Executive/independent Directors, both with
appropriate and relevant financial experience, and an
Executive Director. They are Mr Ken Dark, Mr Brian
Johnson and the CEO, Mr Peter Bond. The committee
members’ qualifications are disclosed on page 36 of this
Annual Report. The Non-Executive and Executive Directors’
remuneration is disclosed in the Annual Report, which
includes any participation in the shareholder approved
Linc Energy Employee Option Plan.
The Chief Financial Officer and Company Secretary (who,
along with the CEO, have responsibility for Linc Energy’s
Risk and Compliance function), and the external auditor
attend Committee meetings at the discretion of the
Committee. The Company Secretary is the secretary
to the Committee. The Committee has agreed to meet
privately with the external auditor on general matters
concerning the external audit and other related matters,
including the half-year and full-year financial reports.
The Company Secretary distributes copies of the minutes
of a meeting of the Committee to the Board for discussion
at the next full Board meeting. The Chairman of the
Committee reports to the Board on the Committee’s
conclusions and recommendations.
The Committee collectively and its members individually
have access to internal and external resources, including
access to advice from external consultants or specialists.
The Committee met two times during the year. Directors’
attendances are set out on page 44 of this Annual Report.
Recommendation 4.3 – The audit committee should have
a formal charter
The Committee operates under a formal Charter published
on Linc Energy’s website. The Charter is reviewed annually
to determine whether any changes are necessary. The
Charter sets out the roles and responsibilities, composition,
structure and membership requirements of the Committee.
The Committee’s primary responsibilities include:
• Monitoring the integrity of financial reporting;
• Monitoring and reviewing the external auditor’s
qualifications, performance and independence;
• Monitoring the effectiveness of risk management
processes;
• Monitoring the effectiveness of Linc Energy’s Audit
functions;
• Monitoring legislative and regulatory compliance; and
• Monitoring the adequacy and completeness
of internal controls.
Non-audit services
The Board is preparing a formal policy on the provision
of auditing and related services including the selection,
appointment and rotation of external auditors. Under the
policy the external auditor will be precluded from providing
any services that might threaten their independence, or
conflict with their assurance and compliance role. Quarterly
reports on the provision of auditing and related services
will be provided to the Board through the Audit and Risk
Management Committee. The Directors have concluded
that non-audit services provided did not compromise
the external auditor’s independence requirements under
the Corporations Act. There is also in place an agreed
rotation policy for the senior auditor of KPMG. The external
auditor annually provides a letter to the Committee on their
independence. No officers of Linc Energy were partners
or directors of KPMG during this reporting period. Linc
Energy’s Auditor Independence Policy will be published on
Linc Energy’s website.
Recommendation 5.1 – Companies should establish
continuous disclosure policies and ensure compliance with
those policies
Market disclosure
A continuous disclosure regime operates throughout Linc
Energy and is documented in Linc Energy’s Continuous
Disclosure Policy which is located on Linc Energy’s
website. The policy is in place to ensure matters that a
person could reasonably expect to have a material effect
on the share price are announced to the ASX in a timely
manner. The Continuous Disclosure Policy describes Linc
Energy’s continuous disclosure obligations and how they
are managed by Linc Energy, as well as how Linc Energy
communicates with financial markets. Senior management,
comprising the CEO, Company Secretary, Chief Financial
Officer, Chief Operating Officer and Head of Investor
Relations monitor Linc Energy’s disclosure requirements.
The purpose of this monitoring process is to help Linc
Energy achieve its objective to establish, implement
and supervise continuous disclosure within Linc Energy.
This includes responsibility for ensuring that all Linc Energy
announcements are made in a timely fashion, contain
material information as well as being objective and factual,
and are clearly written to allow investors to assess the
impact of information on their investment decisions.
The Group is also responsible for recommending
changes to Continuous Disclosure Policy.
Accountability
The Company Secretary as the nominated Continuous
Disclosure Officer reports to the Board quarterly on
matters that were either notified or not notified to the ASX.
Directors receive copies of all announcements immediately
after notification to the ASX. All ASX announcements are
available in the media centre on the Linc Energy website.
Direct reports to the CEO also confirm to the Board,
on a quarterly basis, that matters which might need
to be disclosed have been brought to the attention
of the Continuous Disclosure Officer for review.
Financial market communications
Communication with the financial market is the
responsibility of the CEO, Chief Financial Officer
and Head of Investor Relations. Communication with
the media is the responsibility of the CEO and the Head
of Investor Relations. The Continuous Disclosure Policy
covers briefings to institutional investors and stockbroking
analysts, general briefings, one-on-one briefings, blackout
periods, compliance and review of communications
as well as media briefings.
Recommendation 6.1 – Companies should establish
a shareholder communication policy
Shareholder communication
Linc Energy communicates with shareholders in
accordance with the Corporations Act and Listing Rules
of the ASX. All ASX announcements, press releases
and pertinent shareholder information is maintained on
the Linc Energy website for a minimum of three years.
All announcements made to the ASX are available to
shareholders by email notification when a shareholder
provides the Linc Energy share registry with their email
address and elects to be notified of all Linc Energy
ASX announcements.
In addition, Linc Energy has designed a Shareholder
Communications Policy for promoting effective
communication with shareholders and encouraging
shareholder participation at the Company’s AGMs.
The policy is located on Linc Energy’s website.
64 65

07 CORPORATE
GOVERNANCE
STATEMENT CONTINUED
Compliance with the ASX Principles
Recommendation 6.1
Continued
Meetings
At the AGM, the Chairman encourages questions and
comments from shareholders and seeks to ensure the
meeting is managed to give shareholders an opportunity
to participate. Shareholders can ask questions about
or comment on the operations of the Company and the
performance of the Board and management of Linc Energy.
The Chairman may respond directly to questions or, at his
discretion, may refer a question to another Director, the
CEO or a member of the Executive Team. New Directors
or Directors seeking re-election are given the opportunity
to address the meeting and to answer questions from
shareholders. The external auditor attends Linc Energy’s
AGM. Shareholders may submit written questions to the
auditor to be considered at the AGM in relation to the
conduct of the audit and the preparation and content of the
Independent Audit Report by providing the questions to
Linc Energy at least five business days before the day of the
AGM. Shareholders are also given a reasonable opportunity
at the AGM to ask the auditor questions relevant to the
conduct of the audit, the Independent Audit Report, the
accounting policies adopted by Linc Energy and the
independence of the auditor. The Chairman will provide
reasonable time following the consideration of reports for
questions and comments.
Recommendation 7.1 – Companies should establish risk
management policies
Risk management policies
Linc Energy faces a wide variety of risks due to the nature
of its operations and the regions in which it operates.
Linc Energy has a formal, holistic, enterprise-wide risk
program for the oversight and management of material
business risks which is based on Standards Australia’s
AS/NZS 4360:2004 (Risk Management). This program is
supported by the Linc Energy management team, the CEO,
the Board and Linc Energy’s Audit and Risk Management
Committee. In addition to the Audit and Risk Management
Committee itself, the Company has established a number
of other policies that directly or indirectly serve to reduce
and/or manage risk. These include but are not limited to
the following which are located on Linc Energy’s website:
• Continuous Disclosure Policy;
• Audit and Risk Management Committee Policy;
• Code of Conduct;
• Share Trading Policy;
• Shareholder Communications Policy;
• Ethical Business Conduct Policy; and
• Health, Safety and Environment Policy.
Risk management roles and responsibilities
Linc Energy’s management team monitors and oversees the
continuous improvement of risk identification, assessment,
treatment and reporting, including legislative compliance.
Linc Energy’s Risk and Compliance processes supports
Linc Energy’s business units in the implementation of
the Linc Energy-wide risk management framework.
Recommendation 7.2 – Companies should establish risk
management and internal control systems to manage
material business risk
The Board has required management to design and
implement a risk management and internal control system
to manage Linc Energy’s material business risks as follows:
• In 2009/2010 Linc Energy will perform regular audits
of the internal control systems and risk management
compliance across the Group. These audits take
account of both the nature and materiality of risk.
• The Audit and Risk Management Committee will review
quarterly reports of the activities and findings of the Risk
and Compliance Group and Audit. All outstanding audit
issues are monitored through to satisfactory completion.
• The external auditor will report findings on relevant risk
and control issues to the Audit and Risk Management
Committee and to the Board on a six-monthly basis.
• Management is required to provide monthly reports to
the Board which include the identification of material
business risks and matters relating to the effectiveness of
Linc Energy’s management of its material business risks.
Recommendation 7.3 – CEO and CFO assurance
The CEO and the CFO have provided the Board with written
assurances that the declaration provided in accordance
with section 295A of the Corporations Act is founded on
a sound system of risk management and internal control
and that the system is operating effectively in all material
respects in relation to financial reporting risks.
Recommendation 8.1 – The Board should establish
a remuneration committee
The full Board manages Linc Energy’s People and
Performance matters. Linc Energy has not established
a formal remuneration committee. However, the Board’s
responsibility, among other things, is to consider and
take decisions on remuneration policies and packages
applicable to Board members and to senior Linc Energy
management. The Chief Operating Officer attends meetings
of the Board by invitation when required to report on
and discuss senior management performance,
remuneration and related matters.
Recommendation 8.2 – Companies should clearly
distinguish the structure of Non-Executive Directors’
remuneration from that of Executive Directors
and senior executives
A description of the structure of Non-Executive Directors’
remuneration and Executive Directors’ remuneration is
contained in the remuneration report on pages 45 to 55
of this Annual Report.
66 67

08AUDITOR’S
INDEPENDENCE
DECLARATION
Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001
To: the Directors of Linc Energy Ltd
I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year ended
30 June 2009 there have been:
• no contraventions of the auditor independence requirements as set out in the Corporations Act 2001
in relation to the audit; and
• no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Simon Crane
Partner
Brisbane
24 September 2009
68
Linc Energy staff inspect GTL equipment at the Chinchilla Demonstration Facility.

09
FINANCIAL
REPORT
FOR THE YEAR ENDED 30 JUNE 2009
01 INCOME STATEMENTS 72
02 BALANCE SHEETS 73
03 STATEMENTS OF RECOGNISED INCOME AND EXPENSE 74
04 CASH FLOW STATEMENTS 75
05 NOTES TO THE FINANCIAL STATEMENTS 76
06 DIRECTORS’ DECLARATION 120
This financial report covers both the separate financial
statements of Linc Energy Ltd (Company) as an individual
entity and the consolidated financial statements for the
consolidated entity consisting of Linc Energy Ltd and its
subsidiaries (Group). The financial report is presented
in Australian Dollars.
Linc Energy Ltd is a company limited by shares, incorporated
and domiciled in Australia. Its registered office and principal
place of business is:
32 Edward Street
Brisbane, Qld 4000
A description of the nature of the entity’s operations and its
principal activities is included in the review of operations
and activities on pages 26 to 35 and in the Directors’
Report on pages 42 to 57, both of which are not part
of this financial report.
The financial report was authorised for issue by the Directors
on 24 September 2009. The Directors have the power
to amend and reissue the financial report.
Through the use of the internet, we have ensured that our
corporate reporting is timely, complete, and available globally
at minimum cost to the Company. All press releases, financial
reports and other information are available at our Investors
Centre on our website: www.lincenergy.com.au.
70 71

09 FINANCIAL REPORT
LINC ENERGY LTD
INCOME STATEMENTS
For the year ended 30 June 2009
Consolidated Parent Entity
2009 2008 2009 2008
Notes $’000 $’000 $’000 $’000
Revenue 2 2,034 129 - -
Cost of sales 1,717 377 - -
Gross margin 317 (248) - -
Other income 2 441 86 431 27
Expenses
Management 525 214 525 214
Business development 1,817 1,006 1,817 1,006
Public and investor relations 1,915 1,762 1,915 1,762
Administration and corporate 3,710 1,510 3,612 1,389
Site operating costs 27,988 - 27,988 -
Exploration and evaluation 507 - 507 -
Results from operating activities (35,704) (4,654) (35,933) (4,344)
Finance income 1,869 1,159 1,850 1,159
Finance expenses 3 (6,267) (347) (6,259) (347)
Net finance income / (expense) (4,398) 812 (4,409) 812
Loss before income tax (40,102) (3,842) (40,342) (3,532)
Income tax benefit / (expense) 4 (2,026) (481) (2,026) (481)
Loss for the year (42,128) (4,323) (42,368) (4,013)
Attributable to:
Equity holders of Linc Energy Ltd (42,176) (4,244) (42,368) (4,013)
Minority interest 48 (79) - -
Loss for the year (42,128) (4,323) (42,368) (4,013)
Cents Cents
Earnings / (loss) per share attributable to the
ordinary equity holders Linc Energy Ltd:
Basic earnings / (loss) per share 23 (10.36) (1.21)
Diluted earnings / (loss) per share 23 (10.36) (1.21)
The above Income statements should be read in conjunction with the accompanying notes.
LINC ENERGY LTD
BALANCE SHEETS
As at 30 June 2009
Consolidated Parent Entity
2009 2008 2009 2008
Notes $’000 $’000 $’000 $’000
ASSETS
Current assets
Cash and cash equivalents 5 4,842 3,321 4,572 3,299
Share placement cash receivable 6 - 100,000 - 100,000
Trade and other receivables 7 595 1,059 324 954
Inventories 8 241 130 - -
Assets classified as held for sale 9 9,774 - 9,774 -
Total current assets 15,452 104,510 14,670 104,253
Non-current assets
Receivables 7 65 58 65 58
Intangibles 10 154,641 41,389 54,598 40,280
Available-for-sale financial assets 11 - 16,065 - 16,065
Property, plant and equipment 12 7,893 6,198 7,295 5,878
Other assets 13 850 - 104,818 1,449
Total non-current assets 163,449 63,710 166,776 63,730
Total assets 178,901 168,220 181,446 167,983
LIABILITIES
Current liabilities
Trade and other payables 14 3,925 16,887 6,630 16,553
Borrowings 15 473 341 473 341
Provisions 16 1,716 - 1,716 -
Total current liabilities 6,114 17,228 8,819 16,894
Non-current liabilities
Payables 14 298 186 184 -
Borrowings 15 16,431 3,271 16,431 3,271
Provisions 16 1,320 635 1,320 635
Total non-current liabilities 18,049 4,092 17,935 3,906
Total liabilities 24,163 21,320 26,754 20,800
Net assets 154,738 146,900 154,692 147,183
EQUITY
Contributed equity 17 198,628 166,301 198,628 166,301
Reserves 18 22,684 5,154 22,751 5,201
Accumulated losses 19 (66,757) (24,550) (66,687) (24,319)
Total equity attributable to equity holders
of Linc Energy Ltd 154,555 146,905 154,692 147,183
Minority interest 183 (5) - -
Total equity 154,738 146,900 154,692 147,183
The above Balance sheets should be read in conjunction with the accompanying notes.
72 73

09 FINANCIAL REPORT
LINC ENERGY LTD
STATEMENTS OF RECOGNISED
INCOME AND EXPENSE
For the year ended 30 June 2009
Consolidated Parent Entity
2009 2008 2009 2008
Notes $’000 $’000 $’000 $’000
Changes in the fair value of available-for-sale
financial assets, net of transaction costs
and tax 18 - 1,200 - 1,200
Transfer of prior period revaluation on derecognition
of available-for-sale financial assets (1,200) - (1,200) -
Exchange differences on translation
of foreign operation 97 (78) - -
Income and expense recognised
directly in equity (1,103) 1,122 (1,200) 1,200
Loss for the year (42,128) (4,323) (42,368) (4,013)
Total recognised income and expense for the year (43,231) (3,201) (43,568) (2,813)
Attributable to:
Equity holders of Linc Energy Ltd (43,309) (3,091) (43,568) (2,813)
Minority interest 78 (110) - -
Total recognised income and expense for the year (43,231) (3,201) (43,568) (2,813)
The above Statements of recognised income and expense should be read in conjunction with the accompanying notes.
LINC ENERGY LTD
CASH FLOW STATEMENTS
For the year ended 30 June 2009
Consolidated Parent Entity
2009 2008 2009 2008
Notes $’000 $’000 $’000 $’000
Cash flows from operating activities
Receipts from customers and other debtors
(inclusive of goods and services tax) 2,508 490 182 325
Payments to suppliers and employees
(inclusive of goods and services tax) (18,058) (3,584) (15,291) (3,141)
Interest and borrowing costs paid (2,169) (293) (2,160) (292)
Net cash outflow from operating activities 5 (17,719) (3,387) (17,269) (3,108)
Cash flows from investing activities
Payments for property, plant and equipment (1,933) (60) (1,734) (60)
Proceeds from disposal of property, plant
and equipment 22 59 22 3
Payments for exploration and evaluation (11,050) (252) (11,050) (252)
Payments for coal to liquids
Technology Development (23,572) (25,845) (23,572) (26,027)
Interest received 1,907 1,114 1,879 1,114
Acquisition of Yerostigaz, net of cash acquired - (474) - (487)
Additional investment in Yerostigaz - - (368) -
Purchase of available-for-sale financial assets - (8,558) - (8,558)
Acquisition of SAPEX Limited, net of cash acquired (85,932) - (88,841) -
Investment in Linc Carbon Solutions Pty Ltd - - (394) (50)
Net cash outflow from investing activities (120,558) (34,016) (124,058) (34,317)
Cash flows from financing activities
Proceeds from issue of shares 117,823 33,920 117,822 33,920
Proceeds from the exercise of share options 4,072 568 4,072 568
Share issue costs (3,679) (1,148) (3,679) (1,148)
Proceeds from the issue of convertible notes 22,000 - 22,000 -
Loan from subsidiary - - 2,804 -
Repayment of other borrowings (419) (236) (419) (236)
Net cash inflow from financing activities 139,797 33,104 142,600 33,104
Net increase / (decrease) in cash
and cash equivalents 1,520 (4,299) 1,273 (4,321)
Cash and cash equivalents at the beginning
of the financial year 3,321 7,620 3,299 7,620
Effect of exchange rate fluctuations on cash held 1 - - -
Cash and cash equivalents at end of year 5 4,842 3,321 4,572 3,299
The above Cash flow statements should be read in conjunction with the accompanying notes.
74 75

09 FINANCIAL REPORT
LINC ENERGY LTD
NOTES TO THE
FINANCIAL STATEMENTS
30 June 2009
1. Summary of significant accounting policies
The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have
been consistently applied to all the years presented, unless otherwise stated.
(a) Basis of preparation
This general purpose financial report has been prepared in accordance with Australian Accounting Standards (“AASB’s”)
(including Australian Interpretations) adopted by the Australian Accounting Standards Board (“AASB”) and the
Corporations Act 2001.
Compliance with IFRSs
The consolidated report of the Group and the financial report of the Company comply with International Financial
Reporting Standards (“IFRS’s”) and interpretations adopted by the International Accounting Standards Board (“IASB”).
Historical cost convention
These financial statements have been prepared under the historical cost convention.
Critical accounting estimates
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying accounting policies. The areas involving a higher degree
of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are
disclosed in note 1(bb).
(b) Principles of consolidation
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the Company as at the
end of the reporting period and the results of all subsidiaries for the year then ended. The Company and its subsidiaries
together are referred to in this financial report as the Group or the consolidated entity.
Subsidiaries are all those entities over which the Group has the power to govern the financial and operating policies,
generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect of potential
voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls
another entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated
from the date that control ceases. The purchase method of accounting is used to account for the acquisition of subsidiaries
by the Group.
The Group applies a policy of treating transactions with minority interests as transactions with equity owners of the Group.
For purchases from minority interests, the difference between any consideration paid and the relevant share acquired
of the carrying value of net assets of the subsidiary is deducted from equity.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted
by the Group. Minority interests in the results and equity of subsidiaries are shown separately in the consolidated income
statement and balance sheet respectively. Investments in subsidiaries are accounted for at cost in the individual financial
statements of the Company.
Losses applicable to the minority in a consolidated subsidiary that exceed the minority’s interest in the subsidiary are
allocated to and absorbed by the majority where the minority interest is not obligated or unable to cover the losses.
(c) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net
of returns, trade allowances and amounts collected on behalf of third parties. Revenue is recognised for the major business
activities as follows:
Gas sales revenue
The Group has entered into a gas sales contract with its customer containing a take or pay arrangement. Revenue from
the sale of gas is recognised when the gas is delivered to the customer. If the contracted minimum volume of gas is not
taken, the customer must pay for the minimum contracted volume. Revenue paid in advance by the customer is recognised
as a liability until the gas is delivered.
Interest income
Interest income is recognised on a time proportion basis using the effective interest method.
(d) Income tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on
the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements,
and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets
are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction.
The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the
deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset
or a liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction,
other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary differences and losses. Deferred tax assets and liabilities are offset
when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate
to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right
to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. Current
and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.
Tax consolidation
Any current tax liabilities or assets and deferred tax assets arising from unused tax losses of the subsidiaries are assumed
by the head entity in the tax-consolidated group.
76 77

09 FINANCIAL REPORT
LINC ENERGY LTD
NOTES TO THE
FINANCIAL STATEMENTS
30 June 2009
1. Summary of significant accounting policies
Continued
(e) Cash and cash equivalents
For cash flow statement presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call
with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that
are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value,
and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.
(f) Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision
for doubtful debts. Trade receivables are due for settlement no more than 30 days from the date of recognition.
Collectibility of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written
off. A provision for doubtful receivables is established when there is objective evidence amounts will not be able to be
collected according to the original terms of receivables. The amount of the provision is the difference between the asset’s
carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.
Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial. The amount
of the provision is recognised in the income statement.
(g) Inventories
Raw materials and stores
Raw materials and stores are stated at the lower of cost and net realisable value.
(h) Intangibles
Coal to liquids development costs
Costs incurred on coal to liquids development projects (relating to the design and testing of the Group’s coal to liquids
technology) are recognised as intangible assets when it is probable that the project will, after considering its commercial
and technical feasibility, be completed and generate future economic benefits and its costs can be measured reliably.
The expenditure capitalised comprises all directly attributable costs, including costs of materials, services, direct labour
and an appropriate proportion of overheads. Other development expenditures that do not meet these criteria are
recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as
an asset in a subsequent period. Capitalised development costs are recorded as intangible assets and amortised from
the point at which the asset is ready for use on a straight-line basis over its useful life. The useful life of capitalised coal
to liquids development costs is currently three years, being the estimated period from commissioning of the Group’s
pilot plant demonstration facility until commercial implementation of the technology.
Exploration and evaluation
Exploration and evaluation expenditure incurred is either written off as incurred or accumulated in respect of each
identifiable area of interest. Costs are only carried forward to the extent that they are expected to be recouped through
the successful development of the area, sale of the respective areas of interest or where activities in the area have not
yet reached a stage which permits reasonable assessment of the existence of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision
to abandon the area is made. When production commences, the accumulated costs for the relevant area of interest
are transferred to development costs and amortised over the life of the area according to the rate of depletion of the
economically recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward
costs in relation to that area of interest. Restoration, rehabilitation and environmental costs necessitated by exploration
and evaluation activities are expensed as incurred and treated as exploration and evaluation expenditure.
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable
assets of the acquired subsidiary at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible
assets. Goodwill is not amortised. Instead, goodwill is tested for impairment annually or more frequently if events or
changes in circumstances indicate that it might be impaired and is carried at cost less accumulated impairment losses.
Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. Each of those cash-generating units
represents the Group’s investment in each country of operation by each primary reporting segment.
(i) Investments
Available-for-sale financial assets
Available-for-sale financial assets, comprising principally marketable equity securities, are non-derivatives that are either
designated in this category or not classified in any of the other categories. They are included in non-current assets unless
management intends to dispose of the investment within 12 months of the reporting date. Investments are designated
as available-for-sale if they do not have fixed maturities and fixed or determinable payments and management intends
to hold them for the medium to long-term.
Recognition and derecognition
Regular purchases and sales of financial assets are recognised on trade-date - the date on which the Group commits to
purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets
not carried at fair value through profit or loss.
Subsequent measurement
Available-for-sale financial assets carried at fair value. Changes in the fair value are recognised in equity. Details on how
the fair value of financial instruments is determined are disclosed in note 1(s).
78 79

09 FINANCIAL REPORT
LINC ENERGY LTD
NOTES TO THE
FINANCIAL STATEMENTS
30 June 2009
1. Summary of significant accounting policies
Continued
(j) Property, plant and equipment
All property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that
is directly attributable to the acquisition of the items. Cost may also include transfers from equity of any gains/losses
on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item
can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial
period in which they are incurred.
Land is not depreciated. Depreciation on other assets is calculated using the diminishing value method to allocate their
cost or revalued amounts, net of their residual values, over their estimated useful lives, as follows:
Land 0 years
Buildings 40 years
Motor vehicles 5 years
Office equipment and furniture 2 to 5 years
Plant and equipment 5 to 40 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount (note 1(t)). Gains and losses on disposals are determined by comparing
proceeds with carrying amount. These are included in the income statement.
(k) Leases
Leases of property, plant and equipment where the Group has substantially all the risks and rewards of ownership are
classified as finance leases. Finance leases are capitalised at the lease’s inception at the lower of the fair value of the leased
property and the present value of the minimum lease payments. The corresponding rental obligations, net of finance
charges, are included in other long-term payables. Each lease payment is allocated between the liability and finance cost.
The finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate
of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired
under finance leases is depreciated over the shorter of the asset’s useful life and the lease term.
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified
as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are
charged to the income statement on a straight-line basis over the period of the lease.
(l) Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year
which are unpaid. The amounts are unsecured and are usually paid within 45 days of recognition.
(m) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in the income statement over the period of the borrowings using the effective interest method.
Fees paid on the establishment of loan facilities, which are not incremental costs relating to the actual draw-down
of the facility, are recognised as prepayments and amortised on a straight-line basis over the term of the facility.
(n) Finance expenses
Finance expenses comprise interest expense on borrowings and bank fees and charges. All borrowing costs are
recognised in profit and loss using the effective interest method. Fees paid on the establishment of loan facilities,
which are not incremental costs relating to the actual draw-down of the facility, are recognised as prepayments
and amortised on a straight-line basis over the term of the facility using the effective interest method.
(o) Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events
and it is probable that an outflow of resources will be required to settle the obligation and the amount has been
reliably estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined
by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with
respect to any one item included in the same class of obligations may be small.
If the effect is material, provisions are measured at the present value of management’s best estimate of the expenditure
required to settle the present obligation at the balance sheet date. The discount rate used to determine the present value
reflects current market assessments of the time value of money and the risks specific to the liability. The increase in
the provision due to the passage of time is recognised as interest expense.
Site restoration
In accordance with its environmental obligations the Group recognises a provision for the cost of decommissioning its
demonstration CTL facility and rehabilitating its exploration drill holes. A provision for decommissioning and restoration and
the related expense is recognised when an area is disturbed as a result of the construction of petroleum facilities.
A provision for rehabilitation and the related expense is recognised when a drilling program is completed.
Onerous lease
A provision for onerous leases is recognised when the expected benefits to be derived by the Group from the leased
property is lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured
at the present value of the lower of the expected cost of terminating the contract and the expected net cost of
continuing with the contract (including any related sub-lease income).
(p) Contributed equity
Ordinary shares are classified as equity. Convertible notes are classified as liabilities as the number of shares to be
issued on conversion is based on a fixed discount to the market price of Linc Energy Ltd shares listed on the ASX
on the date of conversion. Therefore, as a variable number of shares may be issued on conversion, AASB 132 Financial
Instruments: Presentation deems them to be a financial liability.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
80 81

09 FINANCIAL REPORT
LINC ENERGY LTD
NOTES TO THE
FINANCIAL STATEMENTS
30 June 2009
1. Summary of significant accounting policies
Continued
(q) Foreign currency translation
Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment
in which the entity operates (‘the functional currency’). The financial statements are presented in Australian Dollars,
which is the Group’s functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from
the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in the income statement.
Group companies
The results and financial position of all Group entities that have a functional currency different from the presentation
currency are translated into the presentation currency as follows:
• Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;
• Income and expenses for each income statement are translated at the exchange rate at the date of the transaction; and
• All resulting exchange differences are recognised as a separate component of equity.
(r) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or
as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.
(s) Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for
disclosure purposes.
The fair value of financial instruments traded in active markets (such as available-for-sale securities) is based on quoted
market prices at the balance sheet date. The quoted market price used for financial assets held by the Group is the
current bid price; the appropriate quoted market price for financial liabilities is the current ask price.
The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate
their fair values.
(t) Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets
are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of
assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which
are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets
other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.
(u) Non-current assets held for sale
Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale
transaction rather than through continuing use. They are measured at the lower of their carrying amount and fair value
less costs to sell.
(v) Business combinations
The purchase method of accounting is used to account for all business combinations, including business combinations
involving entities of businesses under common control, regardless of whether equity instruments or other assets are
acquired. Cost is measured as the fair value of the assets given, equity instruments issued or liabilities incurred or assumed
at the date of exchange plus costs directly attributable to the acquisition. Where equity instruments are issued in an
acquisition, the fair value of the instruments is their published market price as at the date of exchange unless, in
rare circumstances, it can be demonstrated that the published price at the date of exchange is an unreliable indicator
of fair value and that other evidence and valuation methods provide a more reliable measure of fair value.
Transaction costs arising on the issue of equity instruments are recognised directly in equity.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured
initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost
of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If the
cost of acquisition is less than the Group’s share of their fair value of the identifiable net assets of the subsidiary acquired,
the difference is recognised directly in the income statement, but only after a reassessment of the identification and
measurement of the net assets acquired.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their
present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate
at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.
(w) Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted
average number of ordinary shares outstanding during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
82 83

09 FINANCIAL REPORT
LINC ENERGY LTD
NOTES TO THE
FINANCIAL STATEMENTS
30 June 2009
1. Summary of significant accounting policies
Continued
(x) Employee benefits
Share-based payments
Share-based compensation benefits are provided to employees via the Group’s Employee Option Plan. Information relating
to these schemes is set out in note 27. The fair value of options granted under the Linc Energy Ltd Employee Option Plan
is recognised as an employee benefit expense with a corresponding increase in equity. The fair value is measured at
grant date and recognised over the period during which the employees become unconditionally entitled to the options
(the “vesting period”).
The fair value at grant date is independently determined using a Monte Carlo option pricing model that takes into account
the exercise price, the term of the option, the impact of the dilution, the share price at grant date and expected price
volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
The fair value of the options granted excludes the impact of any non-market vesting conditions, as these are included in
assumptions about the number of options that are expected to become exercisable. At each balance date the entity revises
its estimate of the number of options that are expected to become exercisable. The employee benefit expense recognised
each period takes into account the most recent estimate.
Wages and salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected
to be settled within twelve months of the reporting date are recognised in other payables in respect of employees’ services
up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled.
Retirement benefit obligations
The Group contributes to defined contribution superannuation plans for all employees in accordance with relevant
legislation. The Group makes fixed contributions at the current rate of nine percent of gross salary and the Group’s
obligations are limited to these contributions. Contributions are recognised as an expense as they become payable.
Long service leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the present
value of expected future payments to be made in respect of services provided by employees up to the reporting date
using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience
of employee departures and periods of service. Expected future payments are discounted using market yields at the
reporting date on national government bonds with terms to maturity that match the estimated future cash outflows.
(y) Non-employee share-based payments
The Group has granted shares and share options to suppliers as compensation for the provision of services and finance
facilities or for access to private property for exploration drilling. Information relating to these grants is set out in note 27.
The fair value of options granted to suppliers is recognised as an expense or, where appropriate, is capitalised in
accordance with the Group’s capitalisation policy with a corresponding increase in equity. The fair value is measured
at grant date and recognised over the period during which the services are rendered or when the supplier becomes
unconditionally entitled to the options (the “vesting period”).
The fair value at grant date is determined using a Black-Scholes option pricing model that takes into account the exercise
price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected
dividend yield and the risk free interest rate for the term of the option.
(z) Research and development expenditure
The Group classifies the entire coal to liquids demonstration facility (pilot plant) and ongoing technology development
at the site as research and development expenditure. Costs incurred in constructing the Group’s coal to liquids
demonstration facility have been capitalised and included within Intangible assets in the balance sheet (refer note 1(h).
Costs that do not meet the recognition criteria of an intangible asset have been recognised in the income statement.
(aa) Rounding of amounts
The Company is of a kind referred to in Class order 98/100, issued by the Australian Securities and Investment
Commission, relating to the “rounding off” of amounts in the financial report. Amounts in the financial report have been
rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, the nearest dollar.
(bb) Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under
the circumstances.
Critical accounting estimates and assumptions
The entities of the Group make estimates and assumptions concerning the future. The resulting accounting estimates will,
by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Apportionment of overhead expenses
Where they are directly attributable, the Group apportions overhead expenses to income earning, asset creating or certain
corporate activities. The apportionment methodology uses a ratio of overhead to total expenditure to apply these expenses.
The use of this method represents a fair and reasonable approach for determining the portion of overheads that are
deemed to be “directly attributable”.
Site restoration
The Group has provided for site restoration costs to allow for any necessary decommissioning and rehabilitation work at
its coal to liquids technology development site in Chinchilla, in the event of cessation of all activity at the site. In prior years
this provision was based on the Directors’ best estimate of the costs of this work. During the year ended 30 June 2009,
as a result of the completion of the coal to liquids demonstration facility and increased drilling and UCG activity at the site
this provision has been increased by $631,583 to $1,266,350 in line with estimates prepared by the Group’s manager of
environmental affairs for submission to and approval by the Queensland Government Environmental Protection Agency.
Impairment of goodwill
On an annual basis and in accordance with the accounting policy stated in note 1(h), the Group tests whether goodwill
has suffered any impairment. The recoverable amounts of cash-generating units have been determined based on their
fair value less costs to sell.
84 85

09 FINANCIAL REPORT
LINC ENERGY LTD
NOTES TO THE
FINANCIAL STATEMENTS
30 June 2009
1. Summary of significant accounting policies
Continued
(cc) Segment reporting
A segment is a distinguishable component of the Group that is engaged either in a certain activity or industry (business
segment), or engaged in activity within a particular region or economic environment (geographical segment) which is
subject to risks and returns that are different from those of other segments. The Group’s primary format for segment
reporting is based on business segments.
(dd) New accounting standards and interpretations not yet adopted
Certain new accounting standards, amendments to standards and interpretations have been published that are not
mandatory for 30 June 2009 reporting periods. None of these standards have been adopted early, nor are they expected
to have a significant impact on accounting policy or disclosures. The Group’s assessment of the impact of these new
standards and interpretations is set out below. Standards applicable to periods commencing on or after 1 January 2009
will be applied by the Group from 1 July 2009.
Title of Amendment Title of Accounting Standard Issue
date
AASB 2007-03 Amendments to Australian
Accounting Standards arising from
AASB 8 Operating Segments
AASB 2007-06 Amendments to Australian
Accounting Standards arising from
AASB 123 Borrowing Costs
AASB 2007-08 Amendments to Australian
Accounting Standards arising from
AASB 101 Presentation of Financial
Statements
AASB 2008-01 Amendments to Australian
Accounting Standard - Share-based
Payments: Vesting Conditions and
Cancellations
AASB 2008-05 Amendments to Australian
Accounting Standards arising from
the Annual Improvements Project
AASB 2008-07 Amendments to Australian
Accounting Standards – Cost of an
Investment in a Subsidiary, Jointly
Controlled Entity or Associate
AASB 2008-03 Amendments to Australian
Revised AASB 3
and revised
AASB 127
Accounting Standards arising from
AASB 3 Business Combinations
and AASB 127 Consolidated and
Separate Financial Statements
AASB 2008-06 Further Amendments to Australian
Accounting Standards arising from
the Annual Improvements Project
Applicable
date
Impact on accounting policy
or disclosure
Feb 2007 1 Jan 2009 The amendments require the
adoption of a ‘management
reporting’ approach to reporting on
segmental financial performance.
The changes are likely to result
in an increase in the number of
reportable segments presented.
Jun 2007 1 Jan 2009 No material changes to existing
policy or disclosures
Sep 2007 1 Jan 2009 Requires the presentation of a
statement of comprehensive income
and makes changes to the statement
of changes in equity.
Feb 2008 1 Jan 2009 No material changes to existing
policy or disclosures
Jul 2008 1 Jan 2009 No material changes to existing
policy or disclosures
Jul 2008 1 Jan 2009 No material changes to existing
policy or disclosures
Mar 2008 1 Jul 2009 All acquisition-related costs must be
expensed. Transactions with minority
interests to be accounted in equity
where no change in control. No
other material changes to existing
policy or disclosures
Jul 2008 1 Jul 2009 No material changes to existing
policy or disclosures
AASB 2008-08 Amendments to AASB 139 Aug 2008 1 Jul 2009 No material changes to existing
policy or disclosures
AASB Int 16 Hedges of a net investment in a
foreign operation
AASB Int 17 Distribution of non-cash assets to
owners and AASB 2008-13
AASB 2008-13 Amendments to Australian
Accounting Standards arising from
AASB Int 17
Aug 2008 1 Oct 2008 No material changes to existing
policy or disclosures
Dec 2008 1 Jul 2009 No material changes to existing
policy or disclosures
86 87

09 FINANCIAL REPORT
LINC ENERGY LTD
NOTES TO THE
FINANCIAL STATEMENTS
30 June 2009
2. Revenue and other income
Consolidated Parent Entity
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Revenue from continuing operations
Gas sales revenue 2,034 129 - -
2,034 129 - -
Other income
Sundry 441 86 431 27
441 86 431 27
3. Expenses
Profit before income tax includes
the following specific expenses:
Depreciation
Land and buildings 13 11 13 11
Motor vehicles 213 63 213 63
Office equipment and furniture 261 80 256 76
Plant and equipment 379 275 328 275
Total depreciation 1 866 429 810 425
Amortisation
Coal to liquids intangible 15,153 - 15,153 -
Total depreciation and amortisation 16,019 429 15,963 425
Employee benefits expenses
Salaries and wages 10,868 2,507 10,898 2,507
Contributions to defined contribution superannuation plans 939 181 939 181
Other employee costs 1,301 586 1,301 547
Increase in provision for long service leave 54 - 54 -
Share-based payments 9,172 3,446 9,172 3,446
Total employee benefits expenses 1 22,334 6,720 22,364 6,681
Finance costs
Interest and finance charges paid or payable 671 347 663 347
Borrowing costs 5,596 - 5,596 -
Total finance costs 6,267 347 6,259 347
Net loss on disposal of non-current assets 106 39 106 39
Net foreign exchanges (gains)/losses 154 (79) 156 (80)
3. Expenses (continued)
Consolidated Parent Entity
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Research and development expenditure 3 11,633 - 11,633 -
Impairment losses – other assets - - 572 69
Rental expense relating to operating leases
Office premises 2 986 370 986 370
Tenements 216 155 216 155
Total rental expense relating to operating leases 1 1,202 525 1,202 525
1 A proportion of these expenses has been capitalised in accordance with the Group’s accounting policies.
2 Office premises includes $162,000 in relation to an onerous contract on a former leased premises.
3 Research and development expenditure is disclosed here for information purposes – the amount includes expenditure also classified in other categories
such as employee benefits expenses and site operating expenses.
88 89

09 FINANCIAL REPORT
LINC ENERGY LTD
NOTES TO THE
FINANCIAL STATEMENTS
30 June 2009
4. Income tax expense
Consolidated Parent Entity
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Income tax expense
Current Tax - - - -
Deferred Tax 2,026 481 2,026 481
2,026 481 2,026 481
Deferred income tax (revenue) expense included
in income tax expense comprises:
Decrease (increase) in deferred tax assets (35,216) (9,639) (35,216) (9,639)
(Decrease) increase in deferred tax liabilities 37,242 10,120 37,242 10,120
2,026 481 2,026 481
Numerical reconciliation of income tax expense
to prima facie tax payable
Loss before income tax (40,102) (3,842) (40,342) (3,532)
Tax at the Australian tax rate of 30% (2008: 30%) (12,031) (1,153) (12,103) (1,060)
Amounts not deductible (taxable) in calculating taxable income:
Share-based payments 2,752 1,034 2,752 1,034
Research and development (4,157) (7,278) (4,157) (7,278)
Interest and borrowing costs (convertible notes) 1,679 - 1,679 -
Other (45) 95 7 2
Under / (over) provision of prior years 199 (433) 199 (433)
Tax losses not recognised
Current year 13,828 6,821 13,848 6,821
Prior year (199) 433 (199) 433
Income tax expense 2,026 481 2,026 481
Amounts recognised directly in equity
Deferred tax debited (credited) directly to equity
Contributed equity (1,512) (995) (1,512) (995)
Available-for-sale investment reserve (514) 514 (514) 514
(2,026) (481) (2,026) (481)
Unused Tax losses
Unused tax losses for which no deferred tax asset has
been recognised 99,153 45,937 99,896 45,937
Potential tax benefit @ 30% 29,746 13,781 29,969 13,781
4. Income tax expense Continued
Consolidated Parent Entity
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Deferred tax assets
Temporary differences attributable to:
Share issue expenses 1,829 995 1,829 995
Provisions 588 255 571 255
Investments - - 193 -
Property, Plant and Equipment 3,268 - 3,268 -
Borrowing costs (6) - (6) -
Other 227 187 274 187
Tax Losses 41,456 9,197 41,233 9,197
Total deferred tax assets 47,362 10,634 47,362 10,634
Set-off of deferred tax liabilities pursuant to set-off provisions (47,362) (10,634) (47,362) (10,634)
Net deferred tax assets - - - -
Movements
Balance at the start of the period 10,634 - 10,634 -
Charged (credited) to the income statement 35,216 9,639 35,216 9,639
Charged (credited) directly to equity 1,512 995 1,512 995
Balance at the end of the period 47,362 10,634 47,362 10,634
Deferred tax liabilities
Temporary differences attributable to:
Intangible assets 14,039 10,120 14,039 10,120
Exploration costs 33,323 - 33,323 -
Available-for-sale investment reserve - 514 - 514
Total deferred tax liabilities 47,362 10,634 47,362 10,634
Set-off of deferred tax liabilities pursuant to set-off provisions (47,362) (10,634) (47,362) (10,634)
Net deferred tax liabilities - - - -
Movements
Balance at the start of the period 10,634 - 10,634 -
Charged (credited) to the income statement 37,242 10,120 37,242 10,120
Charged (credited) directly to equity (514) 514 (514) 514
Balance at the end of the period 47,362 10,634 47,362 10,634
90 91

09 FINANCIAL REPORT
LINC ENERGY LTD
NOTES TO THE
FINANCIAL STATEMENTS
30 June 2009
5. Cash and cash equivalents
Consolidated Parent Entity
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Cash at bank and on hand 4,360 71 4,307 49
Term deposits (a) 482 3,250 265 3,250
4,842 3,321 4,572 3,299
(a) Of the term deposits held as at 30 June 2009, an amount of $1,771,000 (2008: $792,000) was held by banking
institutions as security against guarantees and credit facilities of the Group. These funds are not available for general
use as working capital.
Reconciliation of profit after income tax to net cash inflow from operating activities
Loss for the year (42,128) (4,323) (42,368) (4,013)
Interest income (1,869) (1,159) (1,850) (1,159)
Interest expense 4,135 70 4,135 70
Net (gain) or loss on sale of non-current assets 106 39 106 39
Net (gain) or loss on foreign exchange 78 (2) (17) (2)
Depreciation and amortisation 16,019 361 15,963 425
Non cash employee benefits 9,172 3,446 9,172 3,446
Capitalisation of non cash overheads (6,127) (3,580) (6,127) (3,580)
Changes in operating assets
Decrease (increase) in receivables (110) 141 (170) 182
Decrease (increase) in prepayments (116) 3 (26) 3
Increase (decrease) in trade creditors 54 791 4 655
Increase (decrease) in other payables 171 601 1,013 601
(Decrease) increase in other provisions 870 (256) 870 (256)
(Increase) decrease in deferred tax assets (35,216) (9,639) (35,216) (9,639)
(Decrease) increase in deferred tax liabilities 37,242 10,120 37,242 10,120
Net cash outflow from operating activities (17,719) (3,387) (17,269) (3,108)
Non-cash investing and financing activities
Acquisition of assets by finance lease 618 1,656 618 1,656
Acquisition of subsidiary by share issue 4,752 - 4,752 778
5,370 1,656 5,370 2,434
6. Share placement cash receivable
Consolidated Parent Entity
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Share placement cash receivable - 100,000 - 100,000
- 100,000 - 100,000
On 25 June 2008, Linc Energy Ltd announced to the market via the Australian Securities Exchange that it had raised
A$100,000,000 by way of a placement of fully paid ordinary shares. Cash was received in settlement of this share
placement in two stages, on the first and fourth of July 2008 in the amounts of $50,097,000 and $46,584,000 respectively
and net of associated transaction costs amounting to $3,114,000. Shares numbering 27,027,027 were issued on the second
of July 2008.
7. Trade and other receivables
Current
Trade Receivables 86 75 47 -
Other Receivables (b) 124 716 65 713
Prepayments 375 226 114 88
Deposits (a) 10 42 8 42
Related Party Receivables - - 90 111
595 1,059 324 954
Non-current
Deposits (c) 65 58 65 58
65 58 65 58
None of the trade and other receivables are impaired or past due but not impaired. Due to the short-term nature of current
receivables, their carrying amount is assumed to approximate their fair value. The fair values of non-current receivables are
consistent with their carrying amounts. The Group and the Parent Entity’s exposure to risk is discussed in note 21.
(a) Current deposits relate to normal trade deposits.
(b) Current other receivables are amounts generally arising from Business Activity Statement refunds and accrued interest
on deposits.
(c) Non-current deposits relate to security held in relation to mining tenements. These deposits are returned on
relinquishment of a tenement subject to satisfactory compliance with environmental and other regulatory requirements.
8. Inventories
Raw materials and stores – at cost 241 130 - -
241 130 - -
92 93

09 FINANCIAL REPORT
LINC ENERGY LTD
NOTES TO THE
FINANCIAL STATEMENTS
30 June 2009
9. Current assets – Non-current assets held for sale
Consolidated Parent Entity
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Intangible assets
Exploration and evaluation – at cost 9,774 - 9,774 -
9,774 - 9,774 -
A number of the Group’s coal exploration tenements in Queensland have been identified as non-core and are currently
being actively marketed for sale. A sale of at least one tenement is planned to occur by 31 December 2009.
10. Intangibles
Internally Generated
Coal to liquids technology development 49,766 39,762 49,949 39,945
Other
Exploration and evaluation costs 103,583 335 4,649 335
Goodwill 1,292 1,292 - -
154,641 41,389 54,598 40,280
Movements:
Internally Generated
Coal to liquids technology development - cost
Balance at the start of the period 39,762 5,439 39,945 5,439
Additions 25,157 34,323 25,156 34,506
Balance at the end of the period 64,919 39,762 65,101 39,945
Coal to liquids technology development -
accumulated amortisation
Balance at the start of the period - - - -
Amortisation for the year (15,153) - (15,153) -
Balance at the end of the period (15,153) - (15,153) -
Net book amount 49,766 39,762 49,948 39,945
Other
Exploration and evaluation costs
Balance at the start of the period 335 - 335 -
Additions 14,088 335 14,088 335
Reclassified as held for sale - refer note 9 (9,774) - (9,774) -
Acquisition of subsidiary – SAPEX Limited tenements (a) 98,934 - - -
Balance at the end of the period (b) 103,583 335 4,649 335
(a) The exploration and evaluation costs acquired from the acquisition of SAPEX Limited included a $94,898,000 fair value
adjustment on consolidation. Refer note 25 for further details.
(b) The recoverability of the carrying amount of the exploration and evaluation results is dependent on the successful
development and commercial exploitation or sale of the respective areas of interest.
10. Intangibles Continued
Consolidated Parent Entity
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Goodwill
Balance at the start of the period 1,292 - - -
Acquisition of subsidiary - 1,292 - -
Balance at the end of the period 1,292 1,292 - -
Total
Balance at the start of the period 41,389 5,439 40,280 5,439
Additions 39,245 34,658 39,245 34,841
Reclassified as held for sale (9,774) - (9,774) -
Amortisation of coal to liquids development costs (15,153) - (15,153) -
Acquisition of subsidiary – SAPEX Limited tenements 98,934 - - -
Acquisition of subsidiary - 1,292 - -
Balance at the end of the period 154,641 41,389 54,598 40,280
Impairment tests for goodwill
Goodwill is allocated to the Group’s cash-generating units (CGUs) identified according to business segment and country of operation.
Australia Asia Total
2009
Coal to liquids development - 1,292 1,292
- 1,292 1,292
2008
Coal to liquids development - 1,292 1,292
Recoverable amount of goodwill with an indefinite life
The recoverable amount of goodwill is determined based on fair value less costs to sell. Fair value is determined as the
amount for which the underlying asset (equity securities of JSPC Yerostigaz) could be exchanged between willing parties
in an arm’s length transaction. There is no observable fair value for the Parent Entity’s investment in Yerostigaz, however the
acquisition took place during the 2008 financial year and therefore continues to provide a reasonable indicator of fair value.
In addition, UCG technology and know-how has become increasingly sought after by governments and corporations around
the world during the past financial year with trial UCG projects being undertaken or planned in South Africa, Australia, the
USA, UK, Vietnam, China, India, Canada, Poland and Hungary. As UCG becomes more accepted as an economically and
environmentally viable production process for energy and petroleum products, the value of companies and their personnel
with UCG technology and experience is increasing. The fair value of Yerostigaz is supported by the observable increase in
market capitalisation of UCG focussed companies on the Australian Stock Exchange over the past financial year.
The investment in Yerostigaz represents a controlling stake in the only commercially operating UCG business in the
world. The controlling stake provides access to a pool of UCG technical specialists and to over 40 years of accumulated
knowledge and UCG intellectual property of Yerostigaz. It also restricts competitors of the Group from accessing the
technology, providing the Group with both a valuable competitive advantage and a valuable product in itself in terms of the
ability to generate revenue through consulting and other commercial avenues (such as the Red River Delta joint venture
project in Vietnam) which further supports a fair value in excess of the carrying value of the goodwill.
The Directors’ believe that the fair value of Yerostigaz exceeds the carrying value of goodwill and the Parent Entity’s
investment in Yerostigaz.
94 95

09 FINANCIAL REPORT
LINC ENERGY LTD
NOTES TO THE
FINANCIAL STATEMENTS
30 June 2009
11. Available-for-sale financial assets
Consolidated Parent Entity
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Listed securities
Equity securities - 16,065 - 16,065
- 16,065 - 16,065
The carrying amount of listed securities is equal to their fair value. The fair value of listed securities has been calculated
using prices quoted on the Australian Securities Exchange at balance date. None of the available-for-sale financial assets
are either past due or impaired.
The equity securities on hand at 30 June 2008 related to the Parent Entity’s initial 17.6% investment in SAPEX Limited
(“SAPEX”). The Parent Entity obtained full control of SAPEX on 15 October 2008 as part of an off-market scheme
of arrangement. The balance was transferred to other assets in the Parent Entity as part of the acquisition accounting
once full control was obtained.
12. Property, plant and equipment
Land and buildings
At cost 3,490 2,885 3,490 2,885
Accumulated depreciation (30) (18) (30) (18)
Net book amount 3,460 2,867 3,460 2,867
Motor vehicles
At cost 1,405 785 1,405 785
Accumulated depreciation (288) (91) (288) (91)
Net book amount 1,117 694 1,117 694
Office equipment and furniture
At cost 1,100 508 1,046 508
Accumulated depreciation (362) (151) (348) (151)
Net book amount 738 357 698 357
Plant and equipment
At cost 3,861 3,189 2,709 2,323
Accumulated depreciation (1,283) (909) (689) (363)
Net book amount 2,578 2,280 2,020 1,960
Total property, plant and equipment 7,893 6,198 7,295 5,878
Movements
Consolidated
Land and
buildings
Motor
vehicles
Office
equipment
and furniture
Plant and
equipment Total
$’000 $’000 $’000 $’000 $’000
Year ended 30 June 2008
Opening net book amount 2,526 160 128 1,716 4,530
Acquisition of subsidiary - - - 312 312
Additions 352 663 309 527 1,851
Disposals - (66) - - (66)
Depreciation charge (11) (63) (80) (275) (429)
Closing net book amount 2,867 694 357 2,280 6,198
Year ended 30 June 2009
Opening net book amount 2,867 694 357 2,280 6,198
Acquisition of subsidiary - - 46 - 46
Additions 606 640 717 678 2,641
Disposals - (4) (120) (2) (126)
Depreciation charge (13) (213) (262) (378) (866)
Closing net book amount 3,460 1,117 738 2,578 7,893
Parent Entity
Land and
buildings
Motor
vehicles
Office
equipment
and furniture
Plant and
equipment Total
$’000 $’000 $’000 $’000 $’000
Year ended 30 June 2008
Opening net book amount 2,526 160 128 1,716 4,530
Additions 352 663 305 519 1,839
Disposals - (66) - - (66)
Depreciation charge (11) (63) (76) (275) (425)
Closing net book amount 2,867 694 357 1,960 5,878
Year ended 30 June 2009
Opening net book amount 2,867 694 357 1,960 5,878
Additions 606 640 717 390 2,353
Disposals - (4) (120) (2) (126)
Depreciation charge (13) (213) (256) (328) (810)
Closing net book amount 3,460 1,117 698 2,020 7,295
Refer to note 15 for information on non current assets pledged as security by the Group. Assets held under finance leases
have a net book value of $1,823,000 (2008: $1,588,000).
96 97

09 FINANCIAL REPORT
LINC ENERGY LTD
NOTES TO THE
FINANCIAL STATEMENTS
30 June 2009
12. Property, plant and equipment Continued
Consolidated Parent Entity
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Leased assets
Plant and equipment and motor vehicles include the following amounts where the Group is a lessee under a finance lease:
Plant and equipment
At cost 1,248 1,248 1,248 1,248
Accumulated depreciation (464) (279) (464) (279)
Net book amount 784 969 784 969
Motor vehicles
At cost 1,293 675 1,293 675
Accumulated depreciation (253) (56) (253) (56)
Net book amount 1,040 619 1,040 619
13. Other assets
Shares in subsidiaries (a) - - 104,540 1,518
Less accumulated impairment - - (572) (69)
- - 103,968 1,449
Prepaid borrowing costs (facility fees) (b) 850 - 850 -
Total other financial assets 850 - 104,818 1,449
(a) These assets are carried at cost and represent shares in subsidiaries as set out in note 26. In the current financial
year the parent recorded an impairment loss of $573,000 (2008: $69,000) in relation to its investment in Linc Carbon
Solutions Pty Ltd. This loss recognises the current research phase of the business of Linc Carbon Solutions Pty Ltd.
The parent entity also increased its investment in JSPC Yerostigaz at a cost of $368,000.
(b) Prepaid borrowing costs represent the 4% facility establishment and 1% underwriting fees paid to establish the
Company’s $36,000,000 convertible note facility with BBY Limited. The fees were paid in cash from the proceeds of
the first group of notes drawn down in December 2008. As each note is drawn down, a portion of the prepaid fees is
transferred to the convertible note liability and amortised over the term of the note using the effective interest method.
14. Trade and other payables
Current
Trade payables 2,951 15,857 2,927 15,859
Accrued employee related costs 716 518 675 491
Accrued taxes 50 118 223 118
Other payables 117 240 - 80
Revenue in advance 91 154 - -
Related party payables - - 2,805 5
3,925 16,887 6,630 16,553
Non-current
Accrued employee related costs 184 - 184 -
Other payables 114 187 - -
298 187 184 -
15. Borrowings
Consolidated Parent Entity
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Current
Secured
Lease liabilities 473 341 473 341
Non-current
Secured
Bank loan 1,800 1,800 1,800 1,800
Lease liabilities 1,540 1,471 1,540 1,471
3,340 3,271 3,340 3,271
Non-current
Unsecured
Convertible notes (measured at amortised cost) 13,091 - 13,091 -
Total non-current borrowings 16,431 3,271 16,431 3,271
Total borrowings 16,904 3,612 16,904 3,612
The parent entity has pledged freehold property with a carrying value of $2,150,000 (2008: $2,150,000) and a cash set-off
agreement with a value of $1,548,000 (2008: $1,752,000) against the loan facility. The fair values of current and noncurrent
borrowings are the same as their carrying amounts. Lease liabilities are finance leases for the purchase of plant,
equipment and motor vehicles. The Group and the Parent Entity’s exposure to risk are discussed in note 21.
Terms and conditions
Terms and conditions of outstanding liabilities were as follows:
Currency
Interest
rate at 30
June
Year of
maturity
Face
value
Consolidated and Parent Entity
Carrying
amount
Face
value
Carrying
amount
In thousands of dollars 2009 2009 2008 2008
Convertible notes AUD 10% 2012 13,000 13,091 - -
Secured finance lease liabilities AUD 9.25% 2010-2012 2,343 2,013 2,334 1,812
Secured bank loan AUD 4.91% 2012 1,800 1,800 1,800 1,800
Total interest bearing liabilities 17,143 16,904 4,134 3,612
98 99

09 FINANCIAL REPORT
LINC ENERGY LTD
NOTES TO THE
FINANCIAL STATEMENTS
30 June 2009
15. Borrowings Continued
Financing arrangements
The Group and the Parent Entity had access to the following undrawn finance facilities at the reporting date:
Facility limit Expiry date Undrawn amounts
2009 2008
Secured $’000 $’000 $’000
Bank overdraft facility (floating rate) 500 31 Dec 09 500 -
Letter of credit / bank guarantee facility 1,160 Annual review
No expiry
- 208
Convertible notes 36,000 date for facility 14,000 -
37,660 14,500 208
The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice.
The letter of credit / bank guarantee facility may be drawn at any time and is subject to annual review.
Convertible notes
In December 2008, the Group entered into a fully underwritten Convertible Note Facility (“Facility”). A total commitment
of $36,000,000 is available to be raised under the Facility. The Group may issue Convertible Notes with a face value of
$1,000,000 in tranches of up to $3,000,000 per month until the total commitment is drawn. Each tranche is underwritten
by BBY Limited (BBY) unless agreed otherwise. The Notes bear interest at the rate of 10% per annum and have a term of
3 years from the date of issue unless earlier converted or redeemed by mutual agreement. The notes convert to ordinary
shares at 80% of the market price on the date on which the note holder chooses to convert or at maturity. As the notes are
convertible into shares at any time at an 80% discount to the market price, the fair value of the notes has been determined
to be $1,250,000 per note.
22 notes were drawn down during the year and nine notes were converted to shares by the holder. At 30 June 2009,
14 notes remain available for draw-down and 13 notes remain outstanding but unconverted.
Consolidated Parent Entity
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Convertible notes
Proceeds from the issue of convertible notes 22,000 - 22,000 -
Transaction costs (a) (1,199) - (1,199) -
Net proceeds 20,801 - 20,801 -
Notes converted (b) (8,146) - (8,146) -
Accreted interest (using the effective interest method) 436 - 436 -
Carrying amount at amortised cost - 30 June 13,091 - 13,091 -
(a) Transaction costs include the discount on drawdown of the notes offset by the placement and facility underwriting fees
charged by BBY Limited. The facility establishment fee of 4% and an underwriting fee of 1%, totalling $1,800,000, was
paid up-front in cash and recorded on the balance sheet as an intangible financial asset. As each note is drawn down,
a proportion of the fee is transferred and offset against the note liability. The fees are then amortised using the effective
interest method over the term of the note or until the note is converted or redeemed. Upon conversion or redemption,
the outstanding balance of the note liability is transferred to equity or paid in cash.
(b) Upon conversion, each note holder is also entitled to an Option Fee of one Linc Energy share option for every three
shares obtained on conversion. The exercise price of the options is set at the conversion price of the notes (being an
80% discount to the market price on the date of conversion). The fair value of this option fee is calculated using a Black-
Scholes option pricing model and recognised on draw-down of each note in the Convertible Note Reserve in equity. The
assumptions used in the model are consistent with those used to value the employee share options as set out in note 27.
Finance lease liabilities
Finance lease liabilities of the Group are payable as follows:
Future
minimum
lease
payments Interest
Consolidated and Parent Entity
Present
value of
minimum
lease
payments
Future
minimum
lease
payments Interest
Present
value of
minimum
lease
payments
2009 2009 2009 2008 2008 2008
$’000 $’000 $’000 $’000 $’000 $’000
Less than one year 640 167 473 519 162 357
One to two years 848 120 728 520 129 391
Two to three years 722 39 683 745 94 651
Greater than three years 133 5 128 550 35 515
2,343 331 2,012 2,334 420 1,914
Equity line of credit facility
The Group also has access to a $20,000,000 equity line of credit facility with US based YA Global Investments, L.P.
(formally Cornell Capital Partners L.P.). Under the terms of the facility, the Company may, at its discretion, issue shares
to YA Global Investments at any time up to 22 October 2013, up to a total of AUD$20,000,000. The maximum advance
is AUD$1,250,000 in any 20 day period, except for the first advance which must not exceed AUD$500,000. The Group
has not yet drawn down on this facility as at 30 June 2009 (30 June 2008: $Nil).
16. Provisions
Consolidated Parent Entity
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Current
Onerous lease – property 162 - 162 -
Site rehabilitation – drilling activities 1,554 - 1,554 -
1,716 - 1,716 -
Non-current
Decommissioning and site restoration – pilot plant 1,266 635 1,266 635
Long service leave 54 - 54 -
1,320 635 1,320 635
100 101

09 FINANCIAL REPORT
LINC ENERGY LTD
NOTES TO THE
FINANCIAL STATEMENTS
30 June 2009
16. Provisions Continued
Onerous lease
The onerous lease provision relates to the lease of the Group’s former office premises and expires in April 2010. The Group
is currently negotiating with the landlord in order to minimise the Group’s ongoing obligations with respect to this lease.
Site restoration
The current site rehabilitation provision allows for rehabilitation work at the Group’s exploration drilling sites in the Bowen
and Galilee basins during the year. This work is expected to be completed within twelve months.
The non current site restoration provision allows for the decommissioning and restoration of the Group’s coal to liquids
technology development facility at Chinchilla on cessation of all activity at the site.
Consolidated Parent Entity
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Movements:
Onerous lease
Carrying amount at the start of the period - - - -
Provisions recognised during the period 162 - 162 -
Carrying amount at the end of the period 162 - 162 -
Site rehabilitation – drilling activities
Carrying amount at the start of the period - - - -
Provisions recognised during the period 1,554 - 1,554 -
Carrying amount at the end of the period 1,554 - 1,554 -
Decommissioning and site restoration – non current
Carrying amount at the start of the period 635 891 635 891
Provisions recognised during the period 631 - 631 -
Provisions no longer required - (256) - (256)
Carrying amount at the end of the period 1,266 635 1,266 635
Long Service Leave
Carrying amount at the start of the period - - - -
Provisions recognised during the period 54 - 54 -
Carrying amount at the end of the period 54 - 54 -
17. Contributed equity
Consolidated and
Parent Entity
Consolidated and
Parent Entity
2009 2008 2009 2008
Number Number $’000 $’000
Share capital
Ordinary shares – fully paid 417,823,415 369,542,802 198,628 68,581
Shares committed not issued - 27,027,027 - 97,720
417,823,415 396,569,829 198,628 166,301
Movements:
Ordinary shares
Opening Balance 369,542,802 321,260,383 68,581 34,080
Placement of ordinary shares (a) 32,889,096 44,731,000 117,000 33,920
Transaction costs arising on placement of ordinary shares - - (6,434) (1,149)
Transaction costs arising on placement of ordinary shares
(prior year shares committed not issued) - - (3,000) -
Deferred tax credit recognised directly in equity - - 1,512 275
Deferred tax credit recognised directly in equity
(prior year shares committed not issued) - - 720 -
Shares issued on exercise of options (b) 7,262,212 2,232,001 5,842 568
Shares issued as compensation for drilling activities (a) 70,626 92,291 153 59
Shares issued as compensation for equity raising services 268,968 - 780 -
Shares issued as compensation for provision
of equity facilities (a) 308,215 65,920 576 50
Shares issued on acquisition of subsidiary – refer note 25 (a) 1,253,770 1,161,207 4,752 778
Shares issued on conversion of convertible notes (c) 6,227,726 - 8,146 -
Closing Balance 417,823,415 369,542,802 198,628 68,581
Shares committed not issued
Opening Balance 27,027,027 - 97,720 -
Placement of ordinary shares (27,027,027) 27,027,027 (100,000) 100,000
Transaction costs arising on placement of ordinary shares - - 3,000 (3,000)
Deferred tax credit recognised directly in equity - - (720) 720
Closing Balance - 27,027,027 - 97,720
(a) Ordinary shares entitle the holder to participate in dividends and then proceeds on winding up of the Company in
proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares
present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.
The Parent Entity does not have authorised capital and ordinary shares have no par value.
(b) Information relating to the Linc Energy Ltd Employee Option Plan, including details of options issued, exercised
and lapsed during the financial year and options outstanding at the end of the financial year, is set out in note 27.
(c) The Group has also issued convertible notes during the year. Refer to note 15 for details of notes issued and converted
during the year and the outstanding balance at the end of the year.
102 103

09 FINANCIAL REPORT
LINC ENERGY LTD
NOTES TO THE
FINANCIAL STATEMENTS
30 June 2009
17. Contributed equity Continued
Capital risk management
The Group’s and the Parent Entity’s objectives when managing capital are to ensure their ability to continue as a going
concern and to maintain an optimal capital structure and cost of capital appropriate to the stage of development of the
Group’s business. The Group is predominantly equity-funded but is currently seeking to dispose of non-core assets to
provide for its future funding requirements. Refer to note 9 for the details of assets held for sale at the balance sheet date.
There was no change to the Group’s approach to capital management during the year.
There are no externally imposed capital requirements on Linc Energy Ltd, however the Company’s subsidiary, JSPC
Yerostigaz is subject to a government mandated recapitalisation program for foreign controlled companies each year.
Linc Energy fully participates in these recapitalisations to ensure it maintains or increases its ownership interest
in the company. The cost of the recapitalisation in 2009 was $368,000 (2008: Not applicable).
Shares issued on exercise of options
7,262,212 shares were issued during the year as a result of the exercise of options (2008: 2,232,001). The total cash
received by the Group from the exercise of options was $4,072,000 (2008: $568,000). Since the end of the financial year,
a further 550,583 shares have been issued as a result of the exercise of options. The total cash received was $367,168.
Shares issued as compensation for drilling activities
The Group negotiates access to landholders’ property in accordance with government guidelines on the payment
of compensation to land owners for disturbance. Land owners can choose to receive compensation as either $1,000
cash or Linc Energy shares to the value of $2,000. The number of shares issued is based on the market price on
the date of completion of drilling.
Shares issued as compensation for equity facility
The Group’s convertible note facility contains equity settled share-based payments in the form of placement fees payable
on draw-down. The placement fee amounts to two percent of the face value of each note drawn down payable in shares
calculated at 80% of the closing price of Linc’s shares on the date of issue of the relevant notes. 281,165 (2008: Nil) shares
were issued under this arrangement during the year.
The Company also issued 27,050 (2008: 65,920) shares as compensation for the extension of the Group’s equity line
of credit facility with YA Global Investments, LP with a fair value of $75,000 (2008: $50,000).
Share buy-back
There is no current on-market buy-back.
Franking credits
The Parent Entity does not currently have any franking credits available.
18. Reserves
Consolidated Parent Entity
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Share-based payments 17,477 4,001 17,477 4,001
Convertible note reserve 5,274 - 5,274 -
Available-for-sale investments - 1,200 - 1,200
Other reserves (81) - - -
Foreign currency translation 14 (47) - -
22,684 5,154 22,751 5,201
Movements:
Share-based payments
Balance at start of the period 4,001 554 4,001 554
Option expense 15,246 3,447 15,246 3,447
Options exercised (1,770) - (1,770) -
Balance at the end of the period 17,477 4,001 17,477 4,001
Convertible note reserve
Balance at start of the period - - - -
Option and placement fees 5,274 - 5,274 -
Balance at the end of the period 5,274 - 5,274 -
Available-for-sale investments
Balance at start of the period 1,200 - 1,200 -
Revaluation - 1,714 - 1,714
Transfer of prior period revaluation on derecognition
of available-for-sale asset (1,714) - (1,714) -
Deferred tax 514 (514) 514 (514)
Balance at the end of the period - 1,200 - 1,200
Other reserves
Balance at start of the period - - - -
Transactions with other shareholders (81) - - -
Balance at the end of the period (81) - - -
Foreign currency translation
Balance at start of the period (47) - - -
Currency translation differences arising during the year 61 (47) - -
Balance at the end of the period 14 (47) - -
104 105

09 FINANCIAL REPORT
LINC ENERGY LTD
NOTES TO THE
FINANCIAL STATEMENTS
30 June 2009
18. Reserves Continued
Nature and purpose of reserves
Share-based payments
The share-based payment reserve is used to recognise the fair value of options issued to employees but not exercised.
Convertible note reserve
The convertible note reserve is used to recognise the fair value of options to be issued on conversion of the convertible
notes. These options are deemed to be granted on the date the notes are initially drawn down. See note 15 for more
information on the terms and conditions of the convertible notes. The convertible note reserve is also used to record
the two percent placement fee payable in shares on draw-down of each note. This amount is transferred to contributed
equity when the shares are issued.
Available-for-sale investments
Changes in the fair value and exchange differences arising on translation of investments, such as equities, classified
as available-for-sale financial assets, are taken to the available-for-sale investments revaluation reserve, as described
in note 1(i). Amounts are recognised in profit and loss when the associated assets are sold or impaired.
Other reserves
The other reserve represents amounts recognised directly in equity in respect of transactions with other shareholders
in Group companies. During the year, the Parent Entity increased its interest in subsidiary JSPC Yerostigaz from 60%
to 73% through the purchase of new shares with a total cost of $368,000 as part of the annual government mandated
recapitalisation program for foreign controlled companies in Uzbekistan. The movement in the other reserve balance
represents the relative transfer of value to the minority interest as a result of the transaction.
Foreign currency translation
Exchange differences arising on translation of the foreign controlled entity are taken to the foreign currency translation
reserve, as described in note 1(q). The reserve is recognised in profit and loss when the net investment is disposed of.
19. Accumulated losses
Movements in accumulated losses were as follows:
Consolidated Parent Entity
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Balance at start of the period (24,550) (20,306) (24,319) (20,306)
Absorb unfunded minority interest accumulated losses (23) - - -
Transactions recognised directly in equity (8) - - -
Net loss for the period (42,176) (4,244) (42,368) (4,013)
Balance at the end of the period (66,757) (24,550) (66,687) (24,319)
20. Commitments
Capital expenditure contracted for at the reporting date but not recognised as liabilities is as follows:
Consolidated Parent Entity
2009 2008 2009 2008
Intangibles / Property, plant and equipment / Investments $’000 $’000 $’000 $’000
Payable:
Within one year 1,518 2,098 1,518 3,048
Later than one year but not later than five years - - - -
Later than five years - - - -
1,518 2,098 1,518 3,048
Capital commitments relate to projects for exploration and evaluation or coal to liquids technology development. The Group
has certain obligations to conduct exploration activities in its coal and petroleum tenements. These obligations do not result in
contractual commitments but expenditure contracted at the reporting date to meet these commitments is included above.
Operating lease commitments as lessee
Lease commitments contracted but not recognised as liabilities are for non-cancellable operating leases of office premises
and mining tenements. All finance leases have been recognised in both Current and Non Current Liabilities. Refer to note
15 for further details.
Commitments in relation to operating leases contracted for at the reporting date but not recognised as liabilities, payable:
Within one year 769 435 769 435
Later than one year but not later than five years 2,766 142 2,766 142
Later than five years 178 - 178 -
3,713 577 3,713 577
The Group leases a number of office premises under operating leases. Leases typically run for between two and six years
with an option to renew for a similar term. The leases generally provide for additional rental payments that are based on
CPI or market reviews with minimum escalation rates. In June 2009 the Group vacated one of the leased premises and has
recognised an onerous lease provision of $162,000 for the remaining rental term until April 2010. It is not yet known if these
premises will be sublet.
Remuneration commitments
Commitments for the payment of salaries and other remuneration under long-term employment contracts in existence at
the reporting date but not recognised as liabilities, payable:
Within one year 899 229 899 229
Later than one year and not later than five years 903 - 903 -
Later than five years - - - -
1,802 229 1,802 229
Amounts disclosed as remuneration commitments include commitments arising from the service contracts of key
management personnel that are not recognised as liabilities and are not included in the key management personnel
compensation as set out in the Remuneration Report included on pages 45 to 55 of the Director’s Report.
106 107

09 FINANCIAL REPORT
LINC ENERGY LTD
NOTES TO THE
FINANCIAL STATEMENTS
30 June 2009
21. Financial instruments
Overview
Overall responsibility for financial risk management rests with the Audit and Risk Management Committee of the Board of
Directors. This committee has responsibility for ensuring the effectiveness of the organisation’s financial risk management
system, including the approval of associated policies. The Finance group is responsible for the development of policy and
the implementation of practices and processes for the management of financial risk.
Financial Guarantees
The parent entity has provided financial guarantees in respect of mineral development licences of $635,000 (2008 -
$635,000), the leasing of premises for $350,000 (2007 - $157,000) and leasing of plant and equipment and motor vehicles
for $175,000 (2008: $Nil). Refer to note 15 for further details of available finance facilities.
Credit risk
Credit risk arises mainly from cash and cash equivalents and deposits with banks and financial institutions. This risk is
managed by depositing funds with credible and independently rated institutions. Minimal exposures exist in relation to
receivables, cash and cash equivalents.
Market risk
Foreign exchange risk
Foreign exchange risk is associated with international procurement and operational activities. This risk arises when
future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the entity’s
functional currency. The establishment and settlement of foreign exchange transactions require senior and financial
management approval to ensure exposures to currency fluctuations are minimised. The Group’s current exposure to
foreign exchange risk is not considered to be significant. The net foreign exchange loss recognised in profit and loss in
2009 was $154,000 (2008: Gain of $79,000). A sensitivity analysis with respect to foreign exchange risk has not been
included as it is not considered to be material.
Interest rate risk
Interest rate risk occurs with respect to cash and deposits and borrowings to the extent they are subject to movements in
floating interest rates. Interest rates for these financial instruments are generally fixed for set periods in order to maximise
returns and minimise exposure.
Price risk
The Group is no longer exposed to material listed equity security price risk as equity securities held at 30 June 2008
as available-for-sale investments have been transferred to other assets following the 100% acquisition and de-listing
of SAPEX Limited.
Liquidity risk
Liquidity risk exists with respect to the ability of the organisation to meet supplier and other payment obligations on an
ongoing basis. Routine treasury management including regular monitoring of cash and expenditure levels is undertaken
to minimise funding issues.
The Group has in place a bank overdraft facility of $500,000 (2008: $Nil). This facility currently has an available balance
of $500,000.
The Group also has in place a convertible note facility with BBY Limited and an equity line of credit facility with US-based
Investment Fund, YA Global Investments, LP (formerly Cornell Capital Partners, LP) to provide access to funds if required.
Refer to note 15 for further details of available finance facilities.
Fair Value
The fair value of financial assets and liabilities approximate their carrying values.
At 30 June 2009, a change of 100 basis points in interest rates would have increased (decreased) equity and profit and
loss by the amounts shown below, assuming all other variables remain constant:
Profit or loss and equity
100bp 100bp
All amounts in thousands Increase Decrease
2009
Financial assets 48 (48)
Financial liabilities (169) 169
Net cash flow sensitivity (121) 121
2008
Financial assets (33) 33
Financial liabilities 36 (36)
Net cash flow sensitivity 3 (3)
Interest rate risk exposure
The following table sets out the Group’s exposure to interest rate risk and the effective weighted average interest rates
during the reporting period.
Consolidated
Weighted
average
effective
interest rate
Floating
interest
rate
Fixed
interest
rate
Non
interest
bearing Total
percent $’000 $’000 $’000 $’000
2009
Financial Assets
Cash and cash equivalents 2.92% 4,349 482 11 4,842
Trade and other receivables - - - 660 660
2.92% 4,349 482 671 5,502
Financial Liabilities
Trade and other payables - - - 4,223 4,223
Lease liabilities 9.25% - 2,013 - 2,013
Bank loan 6.54% 1,800 - - 1,800
Convertible notes 10.00% - 13,091 - 13,091
9.39% 1,800 15,104 4,223 21,127
2008
Financial Assets
Cash and cash equivalents 7.18% 66 3,250 5 3,321
Share placement cash receivable - - - 100,000 100,000
Trade and other receivables - - - 1,117 1,117
7.18% 66 3,250 101,122 104,438
Financial Liabilities
Trade and other payables - - - 17,074 17,074
Lease liabilities 9.56% - 1,812 - 1,812
Bank loan 9.45% 1,800 - - 1,800
9.50% 1,800 1,812 17,074 20,686
108 109

09 FINANCIAL REPORT
LINC ENERGY LTD
NOTES TO THE
FINANCIAL STATEMENTS
30 June 2009
21. Financial instruments Continued
Parent
Weighted
average
effective
interest rate
Floating
interest
rate
Fixed
interest
rate
Non
interest
bearing Total
percent $’000 $’000 $’000 $’000
2009
Financial Assets
Cash and cash equivalents 2.90% 4,307 265 - 4,572
Trade and other receivables - - - 389 389
2.90% 4,307 265 389 4,961
Financial Liabilities
Trade and other payables - - - 6,814 6,814
Lease liabilities 9.25% - 2,013 - 2,013
Bank loan 6.54% 1,800 - - 1,800
Convertible notes 10.00% - 13,091 - 13,091
9.39% 1,800 15,104 6,814 23,718
2008
Financial Assets
Cash and cash equivalents 7.18% 48 3,250 1 3,299
Share placement cash receivable - - - 100,000 100,000
Trade and other receivables - - - 1,012 1,012
7.18% 48 3,250 101,013 104,311
Financial Liabilities
Trade and other payables - - - 16,553 16,553
Lease liabilities 9.56% - 1,812 - 1,812
Bank loan 9.45% 1,800 - - 1,800
9.50% 1,800 1,812 16,553 20,165
Maturities of financial liabilities
The tables below analyse the contractual maturities of the Group and Parent Entity’s financial liabilities (including estimated
interest payments) at the reporting date.
Consolidated
Carrying Contractual
amount cash flows < 1 year
1 to 2
years
2 to 3
years > 3 years
$’000 $’000 $’000 $’000 $’000 $’000
2009
Trade and other payables 4,223 4,223 3,925 298 - -
Lease liabilities 2,013 2,343 640 848 722 133
Secured bank loan 1,800 2,070 90 90 1,890 -
Convertible notes 13,091 16,900 1,300 1,300 14,300 -
21,127 25,536 5,955 2,536 16,912 133
2008
Trade and other payables 17,074 17,074 16,887 187 - -
Lease liabilities 1,812 2,334 519 520 745 550
Secured bank loan 1,800 2,480 170 170 170 1,970
20,686 21,888 17,763 690 915 2,520
Parent
Carrying Contractual
amount cash flows < 1 year
1 to 2
years
2 to 3
years > 3 years
$’000 $’000 $’000 $’000 $’000 $’000
2009
Trade and other payables 6,814 6,814 6,630 184 - -
Lease liabilities 2,013 2,343 640 848 722 133
Secured bank loan 1,800 2,070 90 90 1,890 -
Convertible notes 13,091 16,900 1,300 1,300 14,300 -
23,718 28,127 8,660 2,422 16,912 133
2008
Trade and other payables 16,553 16,553 16,553 - - -
Lease liabilities 1,812 2,334 519 520 745 550
Secured bank loan 1,800 2,480 170 170 170 1,970
20,165 21,367 17,242 690 915 2,520
110 111

09 FINANCIAL REPORT
LINC ENERGY LTD
NOTES TO THE
FINANCIAL STATEMENTS
30 June 2009
22. Segment reporting
Business segments
The Group’s operations are in the development and commercialisation of coal to liquids processes through the combined
utilisation of Underground Coal Gasification (UCG) and Gas to Liquids (GTL) technologies. The results of the parent reflect
the segment performance of the coal to liquids business in Australia.
Geographical segments
The operations of the Group are located in two principal locations, Australia and Asia. In Asia, the operations of the Group
are based in Angren, Uzbekistan.
In presenting information on the basis of geographical segments, segment revenue is based on the geographical location
of customers. Segment assets are based on the geographical location of the assets.
Australia Asia
2009 2008 2009 2008
$’000 $’000 $’000 $’000
Revenues from external customers - - 2,034 129
Segment assets 177,842 167,541 1,059 679
Capital expenditure 36,402 26,157 154 -
23. Earnings per share
Consolidated
2009 2008
Cents Cents
Basic earnings per share
Loss attributable to the ordinary equity holders of the Company (10.36) (1.21)
Diluted earnings per share
Loss attributable to the ordinary equity holders of the Company (10.36) (1.21)
Reconciliation of earnings used in calculating earnings per share $ $
Basic earnings per share
Loss from continuing operations (42,128,386) (4,323,269)
Loss (Profit) from continuing operations attributable to minority interests (47,606) 78,794
Loss from continuing operations attributable to the ordinary equity holders
of the Group used in calculating basic earnings per share (42,175,992) (4,244,475)
Diluted earnings per share
Loss from continuing operations attributable to the ordinary equity holders of the
Group used in calculating basic earnings per share and diluted earnings per share (42,175,992) (4,244,475)
Number Number
Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator
in calculating basic earnings per share (c)
Adjustments for calculation of diluted earnings per share:
407,146,388 352,126,102
Weighted average number of shares under option (a) 34,740,250 27,958,876
Non-dilutive weighted average number of shares under option (a) (34,740,250) (27,958,876)
Shares committed not issued (b)
Weighted average number of ordinary shares and potential ordinary shares used
- 74,047
as the denominator in calculating diluted earnings per share (c) 407,146,388 352,200,149
Notes
(a) Options. Options have not been included in the determination of basic earnings per share. Options are considered to be
potential ordinary shares and have been included in the determination of diluted earnings per share to the extent to which
they are dilutive. Options have a dilutive effect only when the average market price of ordinary shares during the period
exceeds the exercise price of the options. The exercise price of options used for this calculation is the sum of the weighted
average exercise price of options for the period and the fair value of goods and services to be provided to the Group in the
future under the share option arrangements. Further details relating to the options are set out in note 27.
(b) Shares committed not issued. Shares not yet issued relate to irrevocable agreements in place at 30 June 2008 in
relation to an AU$100 million placement of ordinary shares as set out in note 6. As these shares were not issued until 2
July 2008 they were not included in the calculation of basic earnings per share for 2008.
(c) Impact of transactions subsequent to year end. Subsequent to the end of the financial year the Company issued
47,256,581 ordinary shares resulting from a share placement (41,000,000), share purchase plan (5,505,998) and the
exercise of employee and non-employee options (750,583). The Company also granted a further 2,270,000 options under
the Employee Option Plan to new employees of the Group. These ordinary share transactions and potential ordinary share
transactions would have significantly changed the number of ordinary shares and potential ordinary shares outstanding at
the end of the financial year if those transactions had occurred before the end of the reporting period.
112 113

09 FINANCIAL REPORT
LINC ENERGY LTD
NOTES TO THE
FINANCIAL STATEMENTS
30 June 2009
24. Contingent assets and liabilities
Contingent assets and liabilities
As at balance date there are no legal claims pending against the Group and the Directors are not aware of any other
contingent assets or liabilities. As at 30 June 2009, the maximum amount quantifiable in relation to litigation and associated
legal fees that had not already been provided or accrued for in the financial statements was $Nil (2007: $18,000).
25. Business combinations
Summary of acquisition
On 15 October 2008, the parent entity completed its acquisition of 100% of the issued capital of SAPEX Limited (SAPEX) via a
scheme of arrangement. SAPEX holds vast petroleum tenements in South Australia. The total consideration for the acquisition
was $102,151,000 made up of the issue of 1,253,770 fully paid ordinary shares assigned a fair value of $4,752,000 and cash
of $97,399,000 (including transaction costs of $2,100,000).
In the period from 15 October 2008 to 30 June 2009, SAPEX incurred losses of $24,000. If the acquisition had occurred
on 1 July 2008, management estimates that contributed losses would have been $50,000 for the year ended 30 June 2009.
The fair value calculations of this business combination have been determined based on the carrying amounts of the assets
and liabilities of SAPEX. The excess of the purchase consideration over the carrying amounts of the assets and liabilities
of SAPEX is attributed to the fair value of the Group’s significant South Australian mining tenements (refer listing at the back
of this report).
The available-for-sale financial assets comprising SAPEX equity securities with a value of $16,065,000 recognised as at
30 June 2008 have been eliminated on consolidation following the 100% acquisition of all the remaining issued capital
of SAPEX on 15 October 2008.
Carrying Fair value Fair
amount adjustments value
$’000 $’000 $’000
Assets and liabilities acquired
Cash 2,909 - 2,909
Trade and other receivables 344 - 344
Property, plant and equipment 46 - 46
Intangible assets 4,036 94,898 98,934
Trade and other payables (82) - (82)
Net identifiable assets and liabilities 7,253 94,898 102,151
Purchase consideration $’000
Cash paid (including transaction costs of $2,100,000) 97,399
Shares issued (1,253,770 fully paid ordinary shares
in Linc Energy Ltd) 4,752
Total consideration 102,151
Consideration paid in cash 97,399
Less cash balances acquired (2,909)
Net cash outflow 94,490
26. Subsidiaries
Entity
Balance
date
Country of
incorporation
Class of
shares
2009
%
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries:
JSPC Yerostigaz 31 December 1 Uzbekistan Ordinary 72.94 60
SAPEX Limited 30 June Australia Ordinary 100 17.6
Linc Carbon Solutions Pty Ltd 30 June Australia Ordinary 60 60
Linc Energy (USA),Inc 30 June USA Ordinary 100 -
Linc Energy (Wyoming),Inc 30 June USA Ordinary 100 -
1 JSPC Yerostigaz had a balance date of 31 December when acquired by Linc Energy Ltd.
27. Share-based payments
Employee option plan
The establishment of the Linc Energy Ltd Employee Option Plan was approved by Shareholders at the 2005 Annual
General Meeting. Options are granted at the discretion of the Board in accordance with the rules of the plan and all staff
employed by the Company or its subsidiaries are eligible to participate in the plan.
As determined by the Board, a minimum continuous period of employment (usually twelve months) with the Company or
any of its subsidiaries must be served prior to the first exercise date, which falls on 31st December annually. The option
exercise price is set at the discretion of the Board, but is generally the ten day volume weighted average price (VWAP) of
Linc Energy Ltd shares traded on the ASX following commencement of employment with the Group. Subject to ongoing
employment by the Company or any of its subsidiaries, options are exercisable over three consecutive years from the initial
exercise date, with one-third of the total options awarded exercisable each year.
Options granted under the plan carry no dividend or voting rights. When exercisable, each option is convertible into one
ordinary share.
Fair value of options granted
The assessed fair value at grant date of options granted during the year ended 30 June 2009 varied between $0.23 and $1.77
per option (2008: $0.24 to $1.20). The fair value at grant date is independently determined using a Monte-Carlo option pricing
model that takes into account the exercise price, the term of the option, the share price at grant date and expected price
volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
The model inputs for options granted during the year ended 30 June 2009 included:
• Options are granted for no consideration, have a three year life, and 33% of each tranche is exercisable on 31
December annually following the completion of a minimum continuous period of employment (usually twelve months);
• Exercise prices range from $0.25 to $3.16;
• Grant dates range from 01 July 2008 to 22 June 2009;
• Expiry date: 31 December 2011, 31 December 2012, 31 December 2013 and 31 December 2014;
• Share price at grant dates range from $0.61 to $3.69;
• Expected price volatility of Linc Energy’s shares: 75-96.1%;
• Expected dividend yield: 0%; and
• Risk free interest rate: based on Australian Government 5 year bond rates ranging from 3.17% to 6.61%.
The expected price volatility is based on the historic volatility adjusted for any expected changes to future volatility
due to publicly available information.
114 115
2008
%

09 FINANCIAL REPORT
LINC ENERGY LTD
NOTES TO THE
FINANCIAL STATEMENTS
30 June 2009
27. Share-based payments Continued
Employee share plan
A scheme under which shares may be issued by the Company to employees for no cash consideration was approved by
Shareholders at the 2005 Annual General Meeting. All staff who have been continuously employed by the Parent Entity for
a period of one year are eligible to participate in the plan. Shares are granted at the discretion of the Board in accordance
with the rules of the plan.
The Board may offer shares for subscription or acquisition under the plan for consideration (if any) determined by the
Board. The Board may also impose disposal restrictions as its sees fit on any shares acquired under the plan. Shares
to be issued under the plan will be valued at the volume weighted average share price of shares traded on the ASX in
the ordinary course of trading during the five business days immediately preceding the date the shares are issued or
transferred to the employee.
The shares granted under this plan will rank equally in all respects with existing shares from the date of allotment, including
voting rights, distributions, dividends, future rights and bonus issues. No shares have been issued under the plan in the
current financial year.
Expenses arising from share-based payment transactions
Expenses arising from share-based payment transactions recognised during the period totalled $9,172,251 (2008:
$3,446,000).
Expenses relating to share-based payments to employees (including directors and key management personnel) totalled
$8,508,000 (2008: $3,446,000).
In addition to options granted to employees under the Employee Option Plan, the following share-based payment
transactions occurred during the reporting period:
Options issued as compensation for investor relations’ services
During the financial year the Parent Entity granted 750,000 options with an exercise price of $0.66 each to employees of
a US-based supplier of investor relations’ services. The options are immediately exercisable and expire on 30 June 2010.
The options have a fair value of $664,000 (2008: $Nil). The employees will also be granted a further 250,000 options with
the same terms, to be issued during the 2009/10 financial year. There are no further vesting conditions to be satisfied prior
to the issue of these options. During the financial year 368,544 of the options were exercised.
Shares issued as compensation for drilling activities
The Group negotiates access to landholders’ property in accordance with government guidelines on the payment
of compensation to land owners for disturbance. Linc Energy offers land owners a choice as to how they receive their
compensation - either $1,000 cash or Linc Energy shares to the value of $2,000. The number of shares issued is based
on the market price on the date of completion of drilling. 70,626 (2008: 92,291) shares with a fair value of $153,000
(2008: $59,000) were issued to landowners during the year.
Shares issued as compensation for provision of equity facilities
The Group’s convertible note facility contains equity settled share-based payments in the form of placement fees payable
on draw-down. The placement fee amounts to two percent of the face value of each note drawn down payable in shares
calculated at 80% of the closing price of Linc’s shares on the date of issue of the relevant notes. 550,133 (2008: Nil) shares
were issued under this arrangement during the year with a fair value of $1,281,000 (2008: $Nil).
The Company also issued 27,050 (2008: 65,920) shares as compensation for the extension of the Group’s equity line
of credit facility with YA Global Investments, LP with a fair value of $75,000 (2008: $50,000).
Options granted
Set out below are summaries of options granted during the year:
Financial
year of
grant
Expiry
date
Exercise
price range
Balance
at start
of year Granted
Exercisd or
transferred Forfeited
Balance
at end
of year
Exercisable
at end of
the year
$ Number Number Number Number Number Number
Consolidated and Parent Entity - 2009
30 Jun 2009 31 Dec 14 0.25 to 3.16 - 16,913,000 (368,544) (990,000) 15,554,456 381,456
30 Jun 2008 31 Dec 13 0.60 to 0.97 23,185,000 50,000 (3,931,668) (6,228,333) 13,074,999 2,973,334
30 Jun 2007 31 Dec 12 0.25 to 0.60 16,577,999 - (2,962,000) (377,999) 13,238,000 6,444,673
Total 39,762,999 16,963,000 (7,262,212) (7,596,332) 41,867,455 9,799,463
Weighted average exercise price $ 0.62 2.19 0.56 1.05 1.19 0.44
Consolidated and Parent Entity - 2008
30 Jun 2008 31 Dec 13 0.60 to 0.97 - 24,305,000 (20,000) (1,100,000) 23,185,000 80,000
30 Jun 2007 31 Dec 12 0.25 to 0.60 21,090,000 - (2,212,001) (2,300,000) 16,577,999 3,654,669
Total 21,090,000 24,305,000 (2,232,001) (3,400,000) 39,762,999 3,734,669
Weighted average exercise price $ 0.31 0.83 0.25 0.44 0.62 0.26
Convertible notes
The Group’s convertible note facility contains equity settled share-based payments in the form of placement and option
fees payable on draw-down and conversion of the notes respectively. The option fee is payable when a note is converted to
shares and consists of one option for every three shares issued. The options have an exercise price set at the same price at
which the shares are issued and have a term of three years. No options were issued pursuant to conversion of convertible
notes during the year. Nine notes were converted during the period and the Group will be required to issue options in
accordance with the underwriting arrangement during the current financial year.
28. Key management personnel
Consolidated Parent Entity
2009 2008 2009 2008
$ $ $ $
Key management personnel compensation
Short-term employee benefits 1,629,702 1,072,660 1,629,702 1,072,660
Post-employment benefits 131,466 88,824 131,466 88,824
Long-term benefits 7,978 - 7,978 -
Share-based payments 2,963,992 2,276,368 2,963,992 2,276,368
4,733,138 3,437,852 4,733,138 3,437,852
116 117

09 FINANCIAL REPORT
LINC ENERGY LTD
NOTES TO THE
FINANCIAL STATEMENTS
30 June 2009
28. Key management personnel Continued
Transactions with key management personnel
A Director, Mr P. Bond, is a Director and Shareholder of Bond Bros Contracting Pty Ltd. The Group transacted
with Bond Bros Contracting Pty Ltd as follows:
• Mr P. Bond’s remuneration as per his employment contract for Executive Management Services is paid to Bond Bros
Contracting Pty Ltd and for the year ended 30 June 2009, was $250,000 (2008: $250,000).
• Bond Bros Contracting Pty Ltd has been invoiced for reimbursement of expenses totalling $44,226 for the year ended
30 June 2009 (2008: $Nil).
The Non-Executive Chairman, Mr B. Johnson, is a Director and Shareholder of Transpacific Capital Pty Ltd. The Group
has incurred fees for his services as a Non-Executive Director and Chairman to 30 June 2009 $50,000 (2008: $62,500).
Additional information
Further information relating to key management personnel is set out in Remuneration Report included on pages 45 to 55
of the Director’s Report.
29. Related party transactions
Related parties
The parent entity is Linc Energy Ltd and the related parties are:
(a) Subsidiaries as set out in note 26
(b) Key management personnel as set out in note 28
(c) Other related parties:
Marine Exploration and Drilling (Mr. Denis A Leshchenko is a Director and shareholder of this entity and was a Director
of JSPC Yerostigaz during the year).
Transactions with related parties
Transactions with key management personnel are set out in note 28. Other related party transactions are as noted below.
Consolidated Parent Entity
2009 2008 2009 2008
Transaction Related party $ $ $ $
Sales of goods and services
Sale of consulting services Linc Carbon Solutions Pty Ltd - - 183,706 13,860
Sale of goods JSPC Yerostigaz - - 89,773 -
Purchase of services
Consulting Services Marine Exploration and Drilling 665,410 574,388 665,410 574,388
Consulting Services JSPC Yerostigaz - - 84,003 182,122
Other
Contributed equity Linc Carbon Solutions Pty Ltd - - 574,836 68,750
Contributed equity JSPC Yerostigaz - - 388,936 -
Outstanding balances arising from sales / purchases of services
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Consolidated Parent Entity
2009 2008 2009 2008
$ $ $ $
Sales of services
Owing to Linc Carbon Solutions Pty Ltd - - 600 5,489
Owing from JSPC Yerostigaz (a) - - 89,773 111,370
Owing to Marine Exploration and Drilling 72,807 40,509 72,807 40,509
(a) Amounts owing from JSPC Yerostigaz relate to the provision of UCG well casing by the parent entity and will be
reimbursed to the parent company within six months. The Parent Entity does not foresee any losses resulting from
this outstanding balance.
30. Remuneration of auditors
During the year the following fees were paid or payable for services provided by the auditor of the Group.
Audit services
Audit and review of financial reports by KPMG Australia 152,935 - 152,935 -
Audit and review of financial reports by
PricewaterhouseCoopers Australia 69,050 189,800 69,050 188,300
221,985 189,800 221,985 188,300
Non-audit services
Industry review prepared by PricewaterhouseCoopers
Australia - 121,000 - 121,000
- 121,000 - 121,000
31. Events occurring after the balance sheet date
Share placement
On 3 August 2009 the Company announced that it had raised $57,400,000 via the completion of a share placement to
sophisticated investors of 41,000,000 shares at $1.40 per share. On 16 September the Company announced it had raised a
further $7,708,000 (5,505,998 shares) from eligible shareholders via a share purchase plan.
Redemption of convertible notes
In conjunction with the share placement, on 31 July 2009 the Company agreed with BBY Limited and the respective note
holders to redeem nine convertible notes that were outstanding at 30 June 2009. The cash cost of redemption of the notes
was paid out of the proceeds of the share placement and totalled $10,890,000, representing a face value of $9,000,000
million, accrued interest of $240,000 and redemption fees of $1,650,000.
Acquisition of US coal tenements
On 4 September 2009 the Company announced it had completed the acquisition of 92,059 acres of coal tenements in
the Powder River Basin in the state of Wyoming, USA, from Gastech Inc, for the purposes of exploration and commercial
exploitation via UCG. The acquisition had a total cost of US$5,162,086 (AUD$6,231,393).
There were no other matters subsequent to the end of the financial year that may impact the Group’s future operations.
118 119

09 FINANCIAL REPORT
LINC ENERGY LTD
DIRECTORS’ DECLARATION
30 June 2009
In the Directors’ opinion:
(a) the financial statements and notes and the Remuneration report in the Directors’ report, set out on pages 45 to 55,
are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Company’s and the Group’s financial position as at 30 June 2009
and of their performance, for the financial year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations)
and the Corporations Regulations 2001; and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in note 1(a); and
(c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable; and
The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by
section 295A of the Corporations Act 2001 for the financial year ended 30 June 2009.
This declaration is made in accordance with a resolution of the Directors.
Brian Johnson
Chairman
Brisbane
24 September 2009
10
AUDIT
REPORT
Independent auditor’s report to the members of Linc Energy Ltd
Report on the financial report
We have audited the accompanying financial report of Linc Energy Ltd (the Company), which comprises the balance
sheets as at 30 June 2009, and the income statements, statements of recognised income and expense and cash flow
statements for the year ended on that date, a summary of significant accounting policies, other explanatory notes 1 to 31
and the Directors’ declaration of the Group comprising the Company and the entities it controlled at the year’s end or from
time to time during the financial year.
Directors’ responsibility for the financial report
The Directors of the Company are responsible for the preparation and fair presentation of the financial report in accordance
with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001.
This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation
of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying
appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In note 1 (a),
the Directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the
financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in
accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical
requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether
the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material
misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the entity’s preparation and fair presentation of the financial report in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the
financial report.
We performed the procedures to assess whether in all material respects the financial report presents fairly, in accordance
with the Corporations Act 2001 and Australian Accounting Standards (including the Australian Accounting Interpretations),
a view which is consistent with our understanding of the Company’s and the Group’s financial position and of
their performance.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
120 121

10 AUDIT
REPORT
CONTINUED
30 June 2009
Independent auditor’s report to the members of Linc Energy Ltd Continued
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
Auditor’s opinion
In our opinion:
(a) the financial report of Linc Energy Ltd is in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Company’s and the Group’s financial position as at 30 June 2009
and of their performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations)
and the Corporations Regulations 2001; and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1(a).
Report on the remuneration report
We have audited the Remuneration Report included in pages 45 to 55 of the Directors’ report for the year ended 30
June 2009. The Directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with Section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
Auditor’s opinion
In our opinion, the Remuneration Report of Linc Energy Ltd for the year ended 30 June 2009, complies with Section 300A
of the Corporations Act 2001.
KPMG
Simon Crane
Partner
Brisbane
24 September 2009
11
SHAREHOLDER
INFORMATION
The shareholder information set out below was applicable as at 8 September 2009.
Equity security holders
Total number of equity security holders 13,160
Ordinary shares
Shares Options
Convertible
notes
Distribution of equity security holders
Analysis of numbers of equity security holders by size of holding:
1 - 1,000 3,835 1
1,001 - 5,000 5,117 -
5,001 - 10,000 1,882 4
10,001 - 100,000 2,132 43
100,001 and over 194 64 1
Twenty largest quoted equity security holders
The names of the twenty largest holders of quoted equity securities are listed below:
Name
Ordinary shares
Number
held
Percentage
of issued
shares
1. Newtron Pty Ltd 190,923,904 41.56%
2. Citicorp Nominees Pty Limited 24,745,056 5.39%
3. National Nominees Ltd 19,443,823 4.23%
4. HSBC Custody Nominees 14,147,225 3.08%
5. UBS Wealth Management (Australia) Nominees Pty Ltd 10,045,750 2.19%
6. J P Morgan Nominees Australia Limited 9,021,291 1.96%
7. Marubeni Coal Pty Ltd 7,371,000 1.60%
8. HSBC Custody Nominees (Australia) Limited – Account 2 7,215,379 1.57%
9. Perpetual Custodians Limited 7,005,793 1.53%
10. ANZ Nominees Limited 5,564,966 1.21%
11. WK Prospecting Pty Limited 5,111,900 1.11%
12. Steven Fierro 4,847,005 1.06%
13. Bond Street Custodians Limited 3,125,000 0.68%
14. Cogent Nominees Pty Limited 2,884,673 0.63%
15. Pan Australian Nominees Pty Limited 2,358,694 0.51%
16. Mark Andrew Tomkins 2,285,000 0.50%
17. Perpetual Trustees Consolidated Limited 1,881,805 0.41%
18. HSBC Custody Nominees 1,867,034 0.41%
19. Merril Lynch (Australia) Nominees Pty Limited 1,822,664 0.40%
20. Queensland Investment Corporation 1,316,194 0.29%
322,984,156 70.32%
122 123

11 SHAREHOLDER
INFORMATION
CONTINUED
30 June 2009
Substantial equity security holders
Substantial holders in the Company are set out below:
Name
Ordinary shares
Number
held
Percentage
of issued
shares
Newtron Pty Ltd 190,923,904 41.56%
Holders of less than a marketable parcel of equity securities
The number of shareholders with less than a marketable parcel of equity securities 176,606 0.04%
Voting rights
The voting rights attached to each class of equity securities are set out below:
(a) Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
(b) Options
No voting rights.
12
MINING
TENEMENTS
Mining Tenement - Queensland Location Percentage Interest
Pentland EPC 526 220km SW of Townsville – Galilee Basin 100%
Chinchilla EPC 635 15km S of Chinchilla – Surat Basin 100%
Tipton Sth EPC 938 60km SW of Dalby – Surat Basin 100%
Wilkie 1 EPC 897 40km SE of Chinchilla – Surat Basin 100%
Wilkie 2 EPC 898 30km SE of Chinchilla – Surat Basin 100%
Wilkie 3 EPC 899 20km NW of Dalby – Surat Basin 100%
Tipton 2 EPC 902 30km S of Dalby – Surat Basin 100%
Wowan EPC 908 40km N of Biloela – Callide Basin 100%
Jambin EPC 909 25km N of Biloela – Callide Basin 100%
Rathdowney EPC 910 40km S of Ipswich – Clarence Moreton Basin 100%
Teresa EPC 980 20km N of Emerald – SW Bowen Basin 100%
Chinchilla West EPC1046 20km S of Chinchilla – Surat Basin 100%
Teresa EPC 1226 30km N of Emerald – SW Bowen Basin 100%
Biloela EPC 1248 40km N of Biloela – Callide Basin 100%
Teresa North EPC 1267 20km N of Emerald – SW Bowen Basin 100%
Chinchilla EPC 1247 15km SW of Chinchilla – Surat Basin 100%
Wowam West EPC 1323 20km NW Wowam – Callide Basin 100%
MDL 309 - Chinchilla 15km S of Chinchilla – Surat Basin 100%
Mining Tenement – South Australia Location Percentage Interest
PEL 117 Oodnadatta region – Arckaringa Basin 100%
PEL 118 Manguri region – Arckaringa Basin 100%
PEL 119 Coober Pedy region – Arckaringa Basin 100%
PEL 120 Begins N of Adelaide, extends N
257km~50km W of Port Augusta –
St Vincent/Walloway Basins
100%
PEL 121 Algebuckina region – Arckaringa Basin 100%
PEL 122 Coober Pedy region – Arckaringa Basin 100%
PEL 123 Coober Pedy region – Arckaringa Basin 100%
PEL 124 Tarcoola region – Arckaringa Basin 100%
Arckaringa EL 3325 130km NE of Coober Pedy – Arckaringa Basin 100%
Williams Bore EL 3326 90km NE of Coober Pedy – Arckaringa Basin 100%
124 125

13GLOSSARY
& CORPORATE
DIRECTORY
Term Definition
ASX Australian Securities Exchange
ASIC Australian Securities and Investment
Commission
EIS Environment Impact Statement
EPC Exploration Permit for Coal
GTL Gas to Liquids
ISE Instituto Superior de la Energia (Higher
Institute for Energy), Madrid, Spain.
JORC Code Joint Ore Reserves Committee:
The Australasian Code for Reporting of
Exploration Results, Mineral Resources and
Ore Reserves sets out minimum standards,
recommendations and guidelines for Public
Reporting in Australasia of Exploration
Results, Mineral Resources and Ore
Reserves
LTI Lost Time Injury
MDL Mineral Development Licence
PEL Petroleum Exploration Licence
PIRSA Department of Primary Industries and
Resources South Australia
PPB Parts per billion
SPP Share Purchase Plan
Syncrude Synthetic crude is a product from the GTL
process where UCG synthesis gas was the
feedstock.
Syngas Synthesis gas is derived from UCG
technology and contains carbon monoxide
and hydrogen.
UCG Underground Coal Gasification
USA United States
126
Corporate Directory
Directors Mr Brian Johnson
Chairman
Mr Peter Bond
Managing Director
Mr Ken Dark
Non-Executive Director
Secretary Mr Craig Ricato
Notice of Annual
General Meeting
The Annual General Meeting
of Linc Energy Ltd
will be held at
Chelsea Room, Mercure Hotel,
85-87 North Quay, Brisbane QLD
Time 3:00pm
Date Thursday, 26 November 2009.
Principal 32 Edward Street
registered office Brisbane QLD 4000
in Australia
Telephone 07 3229 0800
Facsimile 07 3229 6800
Share register Link Market Services
Level 19, 324 Queen Street
Brisbane Qld 4000
Telephone 07 3320 2291
Auditor KPMG
Level 16, 71 Eagle Street
Brisbane Qld 4000
Bankers Bank of Western Australia Ltd
Stock Exchange Linc Energy Ltd shares are listed
listings
on the Australian Securities Exchange
(ASX, code: LNC) and the International
OTCQX.
Website address www.lincenergy.com.au

This Annual
Report is printed
on paper stocks
manufactured with
the environment
in mind.
Manufactured
from 100% post
consumer waste
Manufactured
using process
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LINC ENERGY LTD // 2009 ANNUAL REPORT
www.lincenergy.com.au
ABN 60 076 157 045