more consolidation, page-14

goodaye Gassed,
i cannot see any tie-up of Bow and ICN.
BOW has now got the "For Sale" sign up, and like ESG, it is a goner.

wrt ATP855, as i have been surmising, I cannot see BPT and ICN not combining their interests in the shale resource of ATP855. As BPT is now the Operator it is clear that the resource will be developed jointly. I could also any gas produced being sold jointly.

i read that the development of shale gas wells is really expensive, and that maintaining those wells in production is also expensive.

whilst its pretty clear that any dev't of the shale resource would be out of ICN's financial grasp, I am also thinking that it would be too big for BPT also.

SO imho, something has to give.

whats clear is BPT will spend enough money to de-risk the resource in both 218 and 855.

its pretty clear that sending the gas to Gladstone is viable. Its also clear that a SA LNG plant is a possibility.

what we need to also factor in, is that the behemoth of BG is also in the room now. BG has farmed into DLS shale permits, so imho, that adds a new dimension, as it now a reality that C/B shale gas has a role to play in Gladdy LNG.

the Gladdy LNG projects need gas, and I think they will try to secure much more resources than they need in order to provide some optionality.

I am leaning towards a merger of the shale interests of ICN and BPT.
I still don't think RJ would sell out, and I don't think BPT would want anything else owned by ICN. (maybe the GSA, but we don't know what the terms are yet).

Under the terms of the farmin by BPT, BPT has to drill a horizontal well in ATP855, and then it will be fracced within 30days paid for by both parties. ICN is free-carried for the horizontal well.

so once that well is drilled and fracced and flow rates obtained in ATP855, that will represent a de-risking of the ICN asset. One could reasonably deduce that 855 should be just as prospective as 218.

SO i could see ICN hiving-off its 40% of ATP855.
Placing th ICN share and BPT/ADE share into a j/v coy and then selling down to an international player makes the most sense to me.

But equally, I could also see BPT buying out the ICN interest for cash, and giving ICN interests in CSG assets in C/B maybe. ie an asset swap. ICN is clearly interestsed in the CSG resource in both 218 and 855, so deal where ICN owns/operates csg resource, whilst BPT exclusively owns the shale resource would be a possibility.

OUT-of LEFT FIELD:
what about a deal where BPT supplies gas to fulfill the ICN GSA - and ICN transfers its interests in ATP855 to BEach?
example - ICN transfers all or some of its interest in 855 in exchange for Beach signing a gas supply agreement?

SOOOO many possibilities, but something will give sooner rather than later - remember we have the drop-dead date of Feb 2012 (was it? or Sept 2012? - cannot remeber)

cheers