gas reserves

whilst I have had my doubts about Icon and its mgt and Board, I have always stated that I believe the MOU had value. That has been proven to be the case, as we now have an even more valuable GSA.

I would say however, I still have lingering doubts wrt the credibility of ICN mgt - but I guess with time, and the evolution of the GSA, these doubts will diminish. The market seems to be still thinking along the same lines unfortunately.

My personal view on the GSA is:
1. the GSA is definately a fungible asset - basically all someone needs to do is provide cert reserves of 2100pj of 2P, and they have a (almost) unconditional contract with an arm of the Govt of China. As i wrote earlier, the process of finding a customer, getting thru all the red tape, getting govt approvals, negotiating terms etc etc, steals a march on competitors, and thus is worth real money.

2. it is interesting that ICN is already in talks with major Gladstone LNG coys - that would be easiest outcome

3. when I read that ICN might look to "stranded gas" to fulfill GSA, i was only thinking East Coast. But clearly ICN is referring to any Aust "stranded gas". So now we can think about gas up in WA etc? Any in Bass Strait maybe?

4. Obviously The big issue for ICN is to move the GSA to an unconditional contract asap. They need to achieve that to organise LNG plant, funding, infrastructure etc etc.
The point that ICN have laboured upon is that they don't need to prove-up their own reserves to 2100pj of 2P all at once. They only need enough gas of their own to supply the contract in the short term. They DO need to have a cert statement proving that ICN CAN supply 2100 pj of 2P though. AND that needs to be in place by 31 March 2013!!!
The big point here, imho, is that there is no way ICN is going to be able to prove-up 2100pj x 2P in two years! Even if they start today, they won't get there.

Clearly from ICN statements, ICN wants to supply the GSA with its own gas - thats where the biggest margins would be.
So I am thinking that what ICN may well do, is to negotiate the conditional supply of gas from another source ie on a "call" basis. then as ICN proves up its own gas, it can substitute iCN gas for that 3rd party's gas. Don't know how mechanism would work or what pricing it would need. Also not sure how/when LNG processing would work.

5 BIGGEST ISSUE imho:
no wonder ICN has said they will make more announcements within a matter of months!

"...Seller obtaining by 31 December 2012 all required authorisations (including for the development and operation of any feedstock fields and LNG facilities) on terms satisfactory to Seller in its sole discretion..."

So by 21 Dec 2012, ICN must supply Buyer with approvals for dev't of gas fields and also LNG production facilities!!

Even if ICN started that process today, they would not get there by Dec 2012. and anyway, they don't have the gas.

So that seems to indicate that ICN must do a deal with one of the big boys? Or I guess maybe ESG ?

cheers