The following notes and statements are relevant to these Contingent and Prospective Resource 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 19 June 2014 and 27 March 2015 and that all the material assumptions and technical parameters underpinning the estimates in
the announcements continue to apply and have not materially changed.
1
The past year has been a very frustrating year for Icon’s
Directors, management, staff and shareholders. During
the year, Icon enjoyed success in the Stage 1 research
and development programme in ATP 855 and finished the
year with a healthy cash balance in the bank of $13.75
million. The cash balance ensures that Icon will be able to
fund its share of the research and development expenses
in ATP 855 and exploration activity in other tenements
over the next year. This is a financial position not enjoyed
by many small oil and gas explorers.
Those successes however have been overwhelmed by
the collapse of the oil price in early 2015, which in turn
has led to a rapid decline of the share prices of energy
companies, including Icon’s. It also led to decisions
by many oil and gas companies to slash their capital
expenditure and hence make significant reductions in
exploration and research activities. Two such companies
were our joint venturers in ATP 855, namely Chevron
and Beach Energy. The collapse of the oil prices led to
the decision by Chevron to withdraw from ATP 855 as
part of its world-wide reduction of Capex on exploration
activities after a decline in Chevron’s world-wide
earnings.
The ATP 855 Joint Venture drilled a total of six wells, with
five wells stimulated and tested for up to six months. All
six wells were gas discoveries. Keppel-1 was not tested
1
due to technical issues concerning pressure and
temperature management and remains suspended
for future evaluation. The drilling and testing of the
wells represented core experimental activities trialling
techniques designed to acquire key data and establish
flow characteristics of the various horizons.
In the 2015 year, the new contractor Condor Energy
Services assembled new modern stimulation equipment
in the USA which was used successfully to stimulate
four of the wells. These wells, Hervey-1, Geoffrey-1,
Redland-1 and Etty-1 were all located in areas where
the gas bearing sediments behaved with a wide variety
of responses which yielded valuable knowledge and
understanding of the methods used. The analysis of the
results has led to a greater understanding of the basin
centred gas accumulation in the Eastern Nappamerri
Trough in the Cooper Basin.
In March 2015, DeGolyer and MacNaughton provided
Beach and Icon with an update on the Contingent
Resources in ATP 855, with a 2C Contingent Resource
estimate of 1.57 TCF. The 2C Contingent 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, out of a total area
of the ATP 855 permit of 414,000 acres.
CHAIRMAN’S REVIEW
4
ICON ENERGY LIMITED
2015 Annual Report ABN 61 058 454 569
CHAIRMAN’S REVIEW
