LINC Energy has flagged a spin-off of its coal interests, including a significant future royalty from Adani Mining's 1.2 billion-tonne Carmichael Coal project in Queensland's Galilee Basin.
Linc, which sold Adani the tenement for $500 million in 2010, is entitled to a $2-per-tonne royalty from the yet-to-be-approved Carmichael project, which would mine 60 million tonnes a year for at least 20 years from early 2016.
Linc chief executive Peter Bond told BusinessDay on Tuesday that Linc's coal division would "end up being floated off and stand on its own two feet".
Linc Energy shares have almost tripled since late November - when they were trading below 60¢ - closing up 10 per cent, or 19¢, on Wednesday to $2.16. The shares remain short of their high of $4.96 in September 2008.
Wednesday's gains came after Linc said two independent consultants had evaluated three formations in the Arckaringa Basin, finding they were rich in shale oil and gas-prone kerogen that "may form the basis of a new liquids-rich shale play". Linc said the resource in its 100 per cent-owned acreage compared favourably with "prolific US unconventional liquids plays like the Bakken and Eagle Ford".
It has appointed Barclays Bank to find a farm-in partner with shale oil expertise to fund the development of Arckaringa.
Mr Bond said Linc was looking for a partner to put $200 million to $300 million "into the ground and take it to the next level".
"We'll still hold a significant stake - we'll probably hold at least half of it. I don't want to just flog it off because it's too good for that, just at the moment."