GOLD Coast gas hopeful Icon Energy has snared a major new shale gas permit that is pivotal to the company making good on its proposed $32 billion gas deal with China.
The State Government has awarded Icon the ATP 855 tenement located in the rich Nappamerri Trough which is said to have 200 trillion cubic feet of gas in place -- a potentially bigger reserve than the mammoth North West Shelf.
"This is the one we've been waiting for," said Icon's managing director Ray James, describing it as a 'historic milestone' for the company.
"It's a huge boost for us.
"This is what we were using to underwrite the Chinese contract so it now means our Chinese memorandum of understanding has been given a boost."
Icon Energy earlier this year secured a deal to supply Shenzhen SinoGas with 40 million tonnes of LNG over 20 years. A gas sale agreement, worth up to $32 billion in revenue, is expected to be signed before the end of this year.
Icon firmed up its gas supply prospects last month by securing the rights to explore a new gas and oil permit in the Gippsland Basin.
But it is the shale gas prospects in the Nappamerri Trough, near the border of Queensland and South Australia, that has excited Mr James. "The grant of ATP 855P now places Icon into a significant shale gas play," he said.
"Icon was an original applicant for the tenement and has interests at all stratigraphic levels."
Mr James said shale gas was emerging as a major resource that has 'saved' the US market.
He said the Nappamerri Trough 'compares with the best in the US'.
Beach Petroleum, which is undertaking a 50-day test well on an adjacent tenement, has proposed a farm-in agreement with Icon Energy that would see it take half of Icon's 80 per cent interest in ATP 855 for $8.5 million in operational expenditure and a $3.5 million placement in Icon shares.
The remaining 20 per cent is controlled by Adelaide Energy.
Icon's permit win may have caught index traders on the hop after the company's shares jumped 18 per cent this week.
The shares, which closed 1c higher at 19.5c yesterday, have been under pressure since Icon was dropped out of the ASX 300 index last month but could gain ground again next week.
The Nappamerri deal will see the indigenous owners of the permit issued with 50,000 Icon shares as part of a sign-on payment.
"It strengthens our relationship (with Icon Energy) as we have a share in the company" said indigenous spokesman Hope Ebsworth.
ICN Price at posting:
19.5¢ Sentiment: None Disclosure: Not Held
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