Linc said two independent consultants had separately 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 within its 100 per cent-owned Arckaringa Basin acreage compared favourably to "prolific US unconventional liquids plays like the Bakken and Eagle Ford," where BHP Billiton has invested billions of dollars.

Linc said consultants DeGolyer and MacNaughton had estimated its unconventional reservoirs in the Arckaringa Basin were of 233 billion barrels of oil equivalent, while another expert Gustavson Associates estimated it was less than half that, at 103 billion barrels. Gustavson had also done a preliminary estimate that conventional reservoirs in Linc's Arckaringa ground amounted to another 125 billion barrels of oil equivalent.

Linc, whose shares jumped 20¢ to $2.17 this morning, has appointed Barclays Bank to find a partner with shale oil expertise to fund the development of Arckaringa. Peter Bond told BusinessDay on Tuesday that Linc was looking for a joint venture partner in the Arckaringa Basin to "put two or three hundred million dollars into the ground and take it to the next level.

"I don't want to put the cost of development on my balance sheet. Shale's very hot at the moment. We've already drilled a lot of this and seismic'd a lot of this. It's a very, very good prospect.

"We'll probably hold hands with a major operator who knows what they're doing and let them, over the next 2-3 years, develop it. "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. We'll wait and see in a couple of years how it drills and develops."

BBY analyst Mike Harrowell said it could take time before a farm-in agreement at Arckaringa was concluded.

Linc Energy shares have almost tripled since late November when its shares were below 60¢, as investors welcomed the prospect of a royalty stream from Adani's massive Carmichael coal project in Queensland's Galilee Basin, and as its conventional oil production in the US exceeded the target of 6000 barrels per day. Oil production was 6300 barrels per day as at December 31. Mr Harrowell said Linc's recent run-up was "recognition they are finally on their way with their US oil production and are changing from a cash-flow poor, asset-rich company with debt, into one where there is adequate cash-flow to service the debt, fund ongoing activities in other assets and de-risk the company from a shareholder point of view."

"We do want to see that level of production maintained, and a guidance commitment given to an expansion to over 8000 barrels a day by December 2013".

Linc shares remain short of their all-time high of $4.96 in September 2008, prior to the collapse of Lehman Brothers.