Tenements

ATP 855P

On 5 October 2010, the Queensland State Government formally granted ATP855P to Icon Energy, Deka Resources Pty Ltd and Well Traced Pty Ltd, with the following interests:

The tenement is located within the rich Nappamerri Trough on the Queensland side of the Queensland and South Australian border and is adjacent in Icon Energy’s interest in PEL218 in South Australia.

Since October 2009, Icon Energy has been negotiating a potential farmin by Beach Energy Ltd (Beach) of up to a 40% participating interest in the tenement. As part of those negotiations, Icon Energy has been seeking to resolve various issues relating to the proposed farmin with Beach, including (amongst other things) operatorship and the nature, extent and conduct of coal seam gas (CSG) operations in the tenement.

Icon Energy and Beach Energy have resolved their dispute in relation to the prospective ATP855P tenement, and have agreed to work together under a Farmin Agreement executed on 15 July 2011.
Under the terms of the Farmin Agreement:

1. The Federal Court proceedings between Beach Energy and Icon Energy were discontinued;
2. Icon transferred a 40% interest in ATP 855P to Beach Energy (subject to Ministerial approval);
3. Beach Energy will drill a horizontal pilot unconventional well into one of the strata comprising the Roseneath, Epsilon and Murteree sequence, then case and suspend the well, suitable for fracture stimulation, which is expected to occur within 30 days of rig release from the well;
4. Beach Energy will fund Icon Energy’s share of the farmin operations at an estimated cost of $16 million (gross), with the exception of a $1.75 million contribution to be made by Icon Energy;
5. The cost of fracture stimulation, completing and flow testing the well will be paid by the joint venture parties in proportion to their participating interest shares;
6. Beach Energy will be recommended by Icon Energy to be the operator of the ATP855P permit;
7. Icon Energy will be recommended by Beach Energy to undertake the management of coal seam gas operations in both ATP 855P and PEL 218 post Permian joint ventures; and
8. Beach Energy will effect the assignment of Icon Energy’s Phase 2 Post Permian PEL 218 interest upon Ministerial consent to the transfer of a 40% interest to Beach Energy in ATP855P, giving Icon Energy a 33.333% interest in the PEL218 Post Permian Joint Venture.

The interests of the parties in ATP855P following the resolution of this dispute are Beach Energy 40%, Icon Energy 40%, Deka Resources Pty Ltd 10% and Well Traced Pty Ltd 10%.  Both Deka Resources Pty Ltd and Well Traced Pty Ltd are wholly owned subsidiaries of Adelaide Energy Limited.

Beach Energy and Icon Energy are pleased with this agreement, and look forward to working closely together with each other and the other ATP855P participants to develop the exciting prospects offered in the emerging shale gas play in the Nappamerri Trough in southwest Queensland.

The (independent) US Energy Information Administration’s (EIA’s) World Shale Gas Resources Report (EIA Report) published on 5 April 2011 significantly raises the potential gas in place in the ATP855P tenement.  The EIA Report’s “Initial Assessment of 14 Regions Outside the United States” has placed the Shale Gas resource potential in the Cooper Basin as a whole at 342TCF (trillion cubic feet) of gas (Risked GIP), with the recoverable equivalent at some 85TCF.