Icon Reports ATP 855 in Queensland Holds 28 Tcf of Prospective Gas Resource

Icon Energy Limited reported Thursday a 28 trillion cubic feet (Tcf) Unconventional Prospective Gas Resource estimate in ATP 855 in Queensland, Australia.

Beach Energy Limited, in its capacity as Operator of the ATP 855 joint venture, which comprises Beach Energy, Icon Energy and Chevron Australia Exploration 1 Pty Ltd, recently engaged DeGolyer & MacNaughton, a leading United States based independent consulting firm focused on the petroleum industry, to provide a report on the Unconventional Prospective Resources in ATP 855. The June 15 report prepared by DeGolyer & MacNaughton has been disclosed by Beach Energy to Icon Energy for the purpose of release to the Australian Securities Exchange.

The findings of this independent report show a best estimate (P50) of 28 Tcf of Gross Unconventional Prospective Raw Natural Gas Resources (as of June 15) in ATP 855, of which Icon Energy’s interest is 10 Tcf (35.1 percent). The results are summarized as follows:

ATP 855 – Gross Unconventional Prospective Raw Natural Gas Resource

  • Gross Unconventional Prospective Raw Natural Gas Resource (Tcf): 21.48 (Low Estimate - P90); 28.49 (Best Estimate - P50); 37.74 (High Estimate - P10)

Notes:

  • Low, best and high estimates in this table are P90, P50 and P10 respectively
  • Probability of geological success has not been applied to the volumes in this table
  • Application of any geological and economic chance factor does not equate unconventional prospective resources to contingent resources or reserves
  • Recovery efficiency is applied to unconventional prospective resources in this table
  • The unconventional prospective resources presented above are based on the statistical aggregation method (probabilistic estimates for each formation)
  • There is no certainty that any portion of the unconventional prospective resources estimated above will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the unconventional prospective resource evaluated

The Unconventional Prospective Resources Estimates prepared by DeGolyer and MacNaughton were evaluated in accordance with the Petroleum Resources Management System (PRMS).

Icon Energy Managing Director Ray James said, today’s independent report is a very encouraging outcome for the joint venture. To have a 28 Tcf Recoverable Prospective Resource booking with Icon’s interest being 10 Tcf is a significant step towards our primary objective of proving up 2 Tcf of 2P reserves in ATP 855.

“This booking released today confirms the potential of the Nappamerri Trough shale and basin-centered gas province and as a joint venture partner we are working hard to “crack the code” of this exciting resource play”.

Next Steps

The Joint Venture has completed drilling Etty-1, which is the sixth and final well in the initial drilling program. This will be followed by a hydraulic stimulation and extended well testing program consisting of 4 wells; Geoffrey-1, Hervey-1, Redland-1 and Etty-1. This program, which is expected to commence in the third quarter of calendar year 2014, will involve optimization of the hydraulic stimulation which will focus on specific horizons in each well across the permit, subject to joint venture approval.

The stimulation in Geoffrey-1 will be progressive, with specific horizons being sequentially stimulated and flow tested in order to evaluate individual flow characteristics. This will lead to a better understanding of the overall gas deliverability from the well. This process is expected to take a number of months.

To progress the Gross Unconventional Prospective Resource to a Contingent Resource classification, will require the successful stimulation and flow testing of the 4 wells as mentioned above and additional evaluation of the well results by an independent consulting firm.

In August 2013 Icon Energy announced an estimated Contingent Resource2 (prepared by DeGolyer & MacNaughton for Beach Energy) attributed to the areas around the Halifax-1 well as follows:

  • Gross Contingent Resources (Bcf): 318 (1C); 629 (2C); 1,115 (3C)

Note:

  • This was based on a statistical aggregation method using Monte Carlo simulation for each formation

Icon is committed to working with its joint venture participants to fully explore this potentially outstanding hydrocarbon resource in ATP 855 and over the coming months will update the market with further results.

Cautionary Statement

The estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s) relate to undiscovered accumulations. These estimates have both an associated risk of discovery and a risk of development. Further exploration, appraisal and evaluation activities are required to determine the existence of a significant quantity of potentially moveable hydrocarbons.

Joint Venture Interests in ATP 855

  • Icon Energy Limited - 35.1 percent
  • Beach Energy Limited - 46.9 percent (Operator)
  • Chevron Australia Exploration 1 Pty Ltd - 18 percent


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