i can't understand market reaction., page-27

Jake,
I am only just starting to focus on ICN again, but as I see it there are only two options.
1.drill like hell for at least 18 months and start testing each well as it is drilled. IF the ongoing results are good, and thats a big "if",then I am sure the Chinese will give ICN a bit more time to get up to the 2TCF requirement.
This to me would be the best option, because it yields the best return on investment.BUT,this will take a lot of money and an intense effort.
Dont forget that ICN is still trying to convert the Stanwell contract to a binding sales contract and this will also tie up an unknown amount of permit 626.
2.ICN could source the gas from third parties (in Qld,NSW and maybe SA).This is a big ask and a tough deal to do.It would also have a much lower rate of return.RJ hasnt been the easiest person to deal with over the years and consequently ICN may be a last resort for some sellers.
3 ICN could aim for a combination of 1 and 2, which is where they actually may end up in my opinion.
4 Merge with a company that has both the reserves and the management and technical experience.This would result in a severe dilution for ICN holders, be very tough to negotiate.Usually MD's shy away from such deals because they often lose the top job and have to deal with a whole new Board.There would still be value in a deal like this for ICN, and depending on the deal may be a good way to go.
It might also save ICN from spending up big to prove up their own reserves.

ICN is nowhere close to satisfying the Stanwell contract.
I wonder if that also has a drop dead date?

The entire approval process will be delayed until it becomes clear where the gas will come from and where it will go to.This process is becomming a lot tougher now that the Greens and others have run big scare programs.Even the big boys have hundreds of onerous environmental conditions to fulfill.the authorities will not give any time to approvals to ICN unless ICN has all the gas and a full cycle development plan.
I dont think ICN has the horsepower,experience or intellect to really do what is required so they need to staff up with good people and therein lies another problem.
Anyway, thats how I see it right now. I havent bought yet as I am still trying to convince myself.