Page 5 - Icon Energy 2014 Annual Report

CHAIRMAN’S AND MANAGING DIRECTOR’S REVIEW
ABN 61 058 454 569 ICON ENERGY LIMITED 2014 Annual Report 5
The 2014/15 year promises to be an equally important year
for the Company with the commencement of a significant
fracture stimulation and flow testing program covering four
wells in September 2014.
FINANCIAL RESULT
While market conditions continue to be challenging, the
Company finished the year on a solid financial footing with
a net profit after tax of $1,577,590 and cash amounting to
$19.6 million.
During the year the Company secured the necessary
capital to progress operations in the Cooper Basin through
the raising of $18.8 million. The capital raising was via a
corporate placement to Hong Kong-based Company, HK
ProsperousTechnology Limited in December 2013.
Our new shareholder is focused on the emerging energy
demands in China over the coming decades. The placement
of 80.3 million shares at 23.5 cents per share introduced
an important and influential keystone shareholder to our
register.
OPERATIONAL STRATEGY
The Company’s decision to focus its capital and resources
on its assets in the Cooper Basin, reflects our primary
strategic objective of establishing 2P reserves of gas. Your
Board believes that Icon’s investment in ATP 855 provides
us with our best option to achieve this strategic objective.
Work undertaken during 2013/14 has led to the certification
of both contingent and prospective resources in ATP 855
and provided the Company, and its shareholders, with a
potentially significant gas discovery in the Cooper Basin.
Recognising that capital and resources need to be focused
on achieving 2P gas reserves, the Board made a decision
during the year to divest the Company’s interests in some
non-core less prospective tenements including ATP 560
U-Eleven, ATP 849 and EPG’s 49 and 51. At the same time
Icon has consolidated its interests in ATP 594 in the Cooper
Basin and ATP 626 in the Surat Basin where Icon now holds
100% interest in both tenements.
OPERATION HIGHLIGHTS
Cooper Basin
ATP 855
Following an extensive fracture stimulation program in
2012/13 the Halifax-1 well was flow tested over the six
months from February to August 2013 and was then shut in
and put on long term pressure build-up. During the flow test
period the well produced over 243 MMscf of gas.
On 26 August 2013, Icon announced that Beach Energy,
in its capacity as Operator of the ATP 855 joint venture,
engaged DeGolyer & MacNaughton, a leading international
An additional five wells were drilled in ATP 855 prior to
October 2014. The five wells Hervey-1, Keppel-1, Geoffrey-1,
Redland-1 and Etty-1 were all completed during the financial
year and the results confirmed the continuation of a basin-
centred gas play in the Nappamerri Trough into southeast
Queensland, with ATP 855 containing the deepest sections
of theTrough. Notices of Petroleum Discovery were lodged
with the Department of Natural Resources and Mines
( DNRM) for the Halifax-1, Keppel-1, Redland-1 and Etty-1
wells.
On 19 June 2014, following the drilling of these new
wells, Icon announced that DeGolyer & MacNaughton had
issued a second report on the unconventional recoverable
prospective resources in ATP 855. The findings of this
independent report on the Unconventional Recoverable
Prospective Raw Natural Gas Resources in ATP 855 show
the following estimates:
1C
318BCF
2C
629BCF
3C
1,115BCF
Low Estimate
(P90)
21.48TCF
Best Estimate
(P50)
28.49TCF
High Estimate
(P10)
37.74TCF
The estimated quantities of petroleum that may potentially
be recovered by the application of a future development
project relate to undiscovered accumulations. These
estimates have both an associated risk of discovery and
a risk of development. Further exploration appraisal and
evaluation is required to determine the existence of a
significant quantity of potentially moveable hydrocarbons.
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reserves certifier to report on contingent resources in the
area around the Halifax-1 well. The assessment reported the
following Unconventional Gross Contingent Resources in
the area around the Halifax-1 well in ATP 855: 1
The following notes and statements are relevant to these
contingent and prospective resources estimates:
- Icon’s equity share of the abovementioned resources is 35.1%;
- The resource estimates were evaluated in accordance with the
Petroleum Resources Management System (PRMS);
- Probabilistic estimates have been made for each target
formation and these have been statistically aggregated;
- Icon confirms that it is not aware of any new information or
data that materially affects the information included in the
announcements released on 26 August 2013 and 19 June 2014
and that all the material assumptions and technical parameters
underpinning the estimates in the announcements continue to
apply and have not materially changed.
1