Ann: UPDATE ON DRILLING STATUS LYDIA PILOT LP-4 , page-6

re: Ann: UPDATE ON DRILLING STATUS LYDIA PILO... Registered Office: Ph: 61+ 07 5562 0077
Level 4, 19 Arbour Court Fax: 61+ 07 5562 0011
PO Box 3366 Email: [email protected]
ROBINA TC QLD 4230 AUSTRALIA Web: www.iconenergy.com
14 April 2009
The Manager
Company Announcements Office
Australian Securities Exchange Limited
20 Bridge Street
Sydney NSW 2000
Dear Sir


UPDATE ON DRILLING STATUS LYDIA PILOT LP-4
Lydia Pilot LP4 has reached a total depth of 819 metres and showed excellent gas saturations
over the Walloon Coal Measures with gas readings ranging from 40 to 75 units ( 8,000 to
15,000 parts per million) against a background gas reading of 2 to 9 units (400 to 1800 ppm).
Drilling encountered a total of 12 well developed coals, which correlated well with the coals
found in Lydia No.1. The shows consisted of natural gas (methane) and were sharply coincident
with the coal breaks in the well. This indicates that the coals contain abundant gas
and are saturated.
The well is half way through under reaming the coals, which is an operation to open the well
bore over the coal intervals to increase the coal surface area in contact with the well. When
this operation is completed the well will be cleaned out in preparation for running and
cementing the 7 inch casing. A 5 ½ inch slotted liner will then be run over the coals. Tubing
and pump will then be installed and the well placed on pump.
When all three new wells are completed and Lydia No.1will be completed as a monitoring
well, the wells will be placed on pump to remove the water from the well bores to determine
gas flow rates. Gas flow rates do not usually reach commercial rates for some time and the
buildup of production gas will be reported on a regular basis. A new storage holding pond is
under construction to take the water produced from the Lydia Pilot.
Netherland Sewell and Associates Inc will engaged to independently estimate and certify the
gas reserves as they are proven. These numbers will also be regularly released to the market.
The coal seam gas resource identified in ATP 626P has been determined utilising 54
previously drilled wells. Some of these wells were drilled the 1960s when technology was not
as advanced as it is now, but they have been very useful in outlining the distribution of the
Jurassic Walloon Coal Measures throughout the permit. The reserves in the permit have not
been determined at this point. What has been determined and reported is the estimated size of
the gas in place which is classified as a resource. The resource is estimated at 5.4 TCF
(5400PG) Gas Initially In Place (GIIP).