Ann: Beach in dispute with Icon regarding ATP855P, page-23

re: Ann: BPT: Beach in dispute with Icon rega... i think all you guys are right.

My experience with Beach over the last few years is that they are greedy, and do not adopt "see-through" good corporate governance.

Just one example, and its pertinent to ICN situation, was when BPT had launched a t/o offer for Drillsearch. BPT was Operator for a well which was being drilled for the J/V of BPT and DLS. SO right in the middle of the drilling, and just before Beach announced to the market that the well was a flop, Beach dumps a bucketful of DLS shares it held, onto the market. It sold shares in between Drilling Report announcements made to the market by Beach!.

I screamed "insider trading", the media picked up the story, and Beach simply claimed it was acting properly. The ASX and ASIC of course did nothing.

SO if ICN wants to get into bed with a rattlesnake, it runs a high risk it will get bitten.

The point is, ICN is going to need to fight every inch of the way if it gets into bed with Beach. It is going to need to ensure that it looks after its own interests every inch of the way - because you can bet that Beach won't do the right thing by ICN.

And here lies the rub.

I think RJ KNOWS how Beach acts on a business basis. And thats why he has declared that there has been no J/V agreement reached. He knows that if he wants to have a situation where ICN can still explore the ATP855 permit for thermal and CSG, when Beach is the Operator, that he will need to have the legal and operational issues stiched-up really tightly.

This was the ICN statement recently released:
"Since October 2009, Icon Energy has been negotiating a potential farmin by Beach Energy Ltd
(Beach) of up to a 40% participating interest in the tenement. As part of those negotiations, Icon
Energy has been seeking to resolve various issues relating to the proposed farmin with Beach,
including (amongst other things) operatorship and the nature, extent and conduct of coal seam gas
(CSG) operations in the tenement, as well as in PEL218.
In the absence of reaching a resolution which is satisfactory to Icon Energy, the Company will for the
time being:
? retain an 80% interest in the tenement and will not proceed with the proposed farmin;
? issue entry notices so that it and its joint venturers can conduct preliminary operations
assessments at the first available opportunity; and
? prepare a detailed exploration drilling programme and budget to test the CSG and shale gas
potential of the permit.
In considering the various issues relating to the tenement, the Company has identified that there is
considerable benefit in not proceeding with the proposed farmin with Beach, particularly given the
inability to formalise the farmin and operating terms and the need to be able to undertake
unhindered geothermal operations in EPG 49 and EPG51..."

Note that the negotiations also include access to PEL218!
SO ICN seems to be having trouble with Beach wrt drilling CSG wells in PEL218 also.

Also, a HC poster above mentioned it had taken a long time for ICN to get going in ATP855 (ie since 2009)- I would point out that the Govt have only JUST formally granted the permits to ICN ! In fact it was only 8 Oct 2010.

Clearly Beach wants in to ATP855 - so there WILL be a resolution to this J/V and Operator issues. I don't think its a money issue. The closer it gets to beach having to release findings on their Holdfast and Encounter wells, the more value will be placed on the ATP855 permit.
I reckon Beach is getting desperate to get its foot on that 40%.

SO it also shows that the claims by Beach in its presentations that Beach was "Operator" of 855, was simply position-taking, and designed to pressure Icon.

I would expect a signing of a GSA would only enhance the value of ATP855 even further.

cheers