2011 i can't wait, page-9

Before some start to get negative after that last ann, something positive to consider (not my opinion. I quote from the 2010 AR.
ATP626P failed to be certified as ?commercial? as the gas flow rate was only 100,000cfgpd when 200,000cfgpd is the required rate. All other factors are satisfactory apart from the permeability of the coal.

The next drilling programme will involve new engineering to enable stimulation. (increase permeability)

Netherland, Sewell & Assoc has already confirmed total resource estimate of 6100PJ within ATP626P, including 1115PJ (2C) and 1775PJ (3C). To move these to proven reserves of 2P and 3P Icon must demonstrate commercial flow rates of fluids. i.e. increase from current 100,000cfgpd to 200,000cfgpd.

That IS Icon?s Number 1 focus for the start of 2011 which we are assured will be the case.

In no way am I suggesting a comparison with BOW Energy, but, what has happened to BOW?s SP gives us a great guide as to how the market is assessing this sector.
BOW has done the opposite to ICN by spending all of their money and efforts into drilling holes and proving up reserves, whereas, ICN has tried to find markets for the gas before they spent too much money on drilling.

Whether or not we agree, the MD clearly states in his report that ?The one essential ingredient for successful unconventional gas is to have a market. Without a market, the investment in drilling to prove up reserves cannot be justified.? That is his policy and we all know about it, like it or not.

BOW has proven reserves but no GSA?s. ICN has one GSA and a ?possible? under negotiation, but no ?proven? reserves.
The market obviously prefers the BOW policy as its market cap is $403 mil, with ICN?s being $103 mil.
But, it indicates what the market can do to ICN?s SP if they (a) prove up their reserves (b) get the China GSA?

ICN has $38.5 mil of drilling coming up ASAP, all paid for by Stanwell and Beach and still has PEL218 and ATP855P and finalization of THAT Beach "deal" to look forward to!!
Something I am happy to sit back and watch.
Happy New Year to all.