MARKET REACTS TO POSITIVE ICON ANNOUNCEMENT

GOLD Coast-based Icon Energy has pushed forward the drilling schedule for its most promising shale gas play by two months after its partner, Beach Energy, was encouraged by strong results in a neighbouring tenement.

The Halifax-1 site at ATP 855P, located on the border of Queensland and South Australia in the Cooper Basin, will be drilled by the end of this month, after originally being scheduled for late September, the company says.

Icon shares were up 10.53 per cent to $0.21 in early trading in reaction to the announcement.

The two companies have established a joint-ownership agreement in ATP 855P, with each holding a 40 per cent assignment. Beach is acting as operator in the Icon-owned tenement.

Beach’s tenement PEL 218 is adjacent to ATP 855 and recent fracture simulation at the Encounter-1 drill site, on the border of the two properties, found a natural gas flow rate of two million standard cubic feet per day (MMscfd).

Icon’s proposed Halifax-1 drill site is just 12 miles from Encounter-1.

“The collaborative approach taken by Beach and Icon will help to confirm what we strongly believe, that the unconventional shale and basin centred gas play, taking shape in the Permian section of PEL 218, continues on the Queensland side in ATP 855P,” says Beach managing director Reg Nelson in a statement to the ASX this morning.

“To date we have not publicised any gas in place estimates for ATP 855P, however, should the Halifax-1 vertical well prove successful, there is little reason why the 300 tcf (trillion cubic feet) plus of gas in place estimated for PEL 218, cannot be replicated in ATP 855P.”

The Ensign 916 rig contracted to Beach and working in PEL 218, will be moved to the Halifax-1 location after the completion of the Streaky-1 well, to the south of Encounter-1, which has reached a depth of 3821 meters and is preparing to run casing.

Encounter-1 will be extensively cored, with evaluation of the whole Permian section down to the base of the Patchawarra Formation. It will be used to identify the best targets for a future horizontal well.

Beach will fund the first $16 million investment in Halifax-1 (or until the cost of completion), less a $1.75 million contribution from Icon.