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ICON ENERGY LIMITED
2015 Annual Report ABN 61 058 454 569
DIRECTORS’ REPORT
Update of Contingent Resource Estimate
On 27 March 2015 Icon announced DeGolyer and MacNaughton, an independent consulting firm focused on the petroleum
industry, had provided an updated report on the Contingent Resources (as at 31 December 2014) around the Halifax-1,
Etty-1, Hervey-1, Redland-1 and Geoffrey-1 wells in ATP 855 of 1,572Bcf 2C (551.7Bcf Icon share) . The Contingent
Resources estimate was evaluated in accordance with the Petroleum Resources Management System (
PRMS
) (March
2007).The size of the area chosen for the assignment of Contingent Resources was based on guidance from PRMS, which
indicates that a low estimate (1C) of area should consist of two to three well spacings surrounding the discovery well, a
best estimate (2C) of area should be two to three well spacings beyond this, and a high estimate (3C) of area should be
another two to three well spacings beyond this. Well spacings vary between 80 acres and 160 acres dependent on the
well type applied to address the particular resource. As a result, the 2C resources were estimated over an area of between
6,500 acres and 13,000 acres around each of the five wells tested, depending on the particular formation. The total area of
the ATP 855 permit is approximately 414,000 acres.
Realignment of Joint Venture interests
On 27 March 2015 Icon Energy announced that Chevron Exploration Australia 1 Pty Ltd (“Chevronâ€) will not participate
in Stage 2 in ATP 855 in Queensland. Chevron advised Icon that while extensive technical evaluation has confirmed a
large gas resource and the potential for further appraisal and development, at this time the opportunity does not align
strategically with Chevron’s global exploration and development portfolio.
The exploration expenditure will be modest over the remaining months of the 2015-2016 financial year.
ATP 626 Surat Basin Queensland
• Following a strategic review of ATP 626, Icon relinquished 20 sub-blocks or two–thirds of ATP 626 in the southern portion of
the tenement. In October 2014 Icon completed a rehabilitation program of old Joint Venture wells that would not be utilized
in the future of the permit.
• The Later Work Program for the period 1 January 2014 to 31 August 2017 was lodged on 28 April 2014 and was
subsequently approved by DNRM.
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Contingent Resources are those quantities of wet gas (produced gas minus carbon dioxide) that are potentially recoverable from known
accumulations but which are not considered to be commercially recoverable due to the need for additional delineation drilling, further
validation of deliverability and original hydrocarbon in place (
OHIP
), and confirmation of prices and development costs.This is based on a
statistical aggregation method using Monte Carlo simulation estimates for each formation.
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