bpt vs icn, page-9

Goodaye,
I too am rapidly becoming disheartened with what is happening at ATP626, and with the prospects of fulfilling the Stanwell GSA.
Without much info wrt ATP626, it appears that the permit may well be a bit of a dog.
We never have been informed about the flow rates etc, and most of the wells drilled (albeit few in number over so many years), seem to be either failures or poor performers at best.
I agree with Occam, that without a doubt, it will cost millions to develop any gas fields in ATP626 - but raising those funds for field development would probably not be a problem, IF the wells were good performers - which they clearly are not.
I am still not clear what Stanwell will do if the latest round of drilling is not encouraging.

But i guess we need to divorce the ATP626 farce from the ATP855 situation.

The ATP855 situation, imho, is simply one of "business".
I don't think the objective of ICN and BPT have changed, but the parameters have changed with the effluction of time.

The terms of the BPT farmin was announced back in Oct 2009.
At that time Beach had not done any shale drilling, and was still evaluating the concept and the potential of the Nappameerri trough. So it was early days for BPT.

The F/in deal seemed to have three legs:
1. - BPT gets 25% for funding seismic
2. - BPT gets option to acquire additional 15% by funding ICN's share of drilling costs up to max of $7m.
ICN estimated cost to BPT of 40% farmin would be approx $8.5m.
3. - BPT to subscribe to $3.5m of ICN shares ( at a price to be negotiated - within a yet to be completed Share Subscription Agreement).

Since that time, several things have happened.
1. BPT has done much more work on analysing the potential dev't of the shale gas resources in Nap Trough
2. - qty of resource appears to be huge with BPT estimating resource as bigger than all QLD CSG resource
3. BPT had drilled Encounter shale gas well, and by Dec 2010 had the coring results and an idea of potential (good gas shows, and shale thickness expected was 60m but came in at 200m thick).
4 But BPT then only launched its legal proceedings in March 2011. ie so BPT had results of Encounter and had prelim results of Holdfast well prior to launching legal action - so it obviously is well aware of the value of the prize.
5. Cooper Basin J/V now looking at sending its gas north to GLNG project - so BPT shale gas has another potential market for its shale gas - in addition to possibility of LNG export thru SA LNG terminal.
6. ICN signed Chinese GSA - possible commercialisation route for ICN - BUT also for BPT/ICN J/V
7. Change of SP dynamics for BPT subscription for ICN shares:
- as per ICN preso on 14 Sept 2009 ICN sp was 53c, with 439m shares on issue, and market cap of $233m.
- yesterday sp was 18c, 469m shares and market cap of $82m !!!
- so at Sept 2009 price of 53c BPT gets 6.6m shares or 1.5% shareholding
- but at yesterday pricing BPT gets 19.4m shares or 4.1%. At 19.4m shares that would make BPT 3rd largest s/h, and almost as big a s/h as R/J ! so it would not take much for BPT to go past RJ and become biggest s/h. At what point would BPT demand a seat on ICN Board????
8. BPT ALWAYS said that its purpose in farmin to ATP855 was to "consolidate" its shale position in Napp trough !!
( and that is the kicker - that situation will not change irrespective of who wins the court case - it will always be BPT position to "consolidate" permits, because of all the advantages - scale, operatorship, development options, efficiency of exploration, efficiency of development, attractiveness to GSA offtakers, attractiveness to new farminees/new JV partners, attractiveness to funding participants, scale for infrastructure and LNG plants etc, etc).

The only thing that will change is the TERMS of BPT's participation!

So what I am getting to, is that I don't think ICN intends to ditch BPT if ICN wins - it will just try and renegotiate the terms!

If BPT wins, then the terms of the farmin remain, but I think that the Share Subscription would still need to be determined !?
That would probably need to be negotiated in light of the determination of the court proceedings - maybe they would get an arbitrator.

But one thing is clear - BPT wants "IN" to ATP855.

cheers