ICON Energy's (ASX: ICN) shrinking share price has prompted the Gold Coast-based gas explorer to undertake a buyback of up to 10 per cent of its stock on issue.
The buyback comes on the heels of Icon this week reporting it held $20.97 million in cash after posting an $8.19 million profit for the December half.
The profit was driven by an $11.36 million income tax benefit and compares with a $2.8 million loss a year earlier.
Icon's shares slipped to a low of 7.3c in recent weeks as the company continues to wait out results from test drilling its potentially lucrative gas deposit in the Nappamerri Trough along the Queensland and South Australian border.
Icon is yet to determine the commercial viability of the ATP 855 permit which is being drilled by joint venture partner Beach Energy (ASX: BPT).
The company's shares have settled above 8c but traded as high as 18.5c over the past year.
"Our cash position is sufficient to meet our near-term exploration and administrative commitments and we retain the ability to pursue valuable growth opportunities that may arise in the near future," says Icon's managing director Ray James (pictured).
"The buy-back provides Icon with an opportunity to strengthen the company's capital position at a cyclical low point in the resources market and also demonstrates the board's strong belief in the underlying values of the company's assets," he says.
Icon intends buying back and cancelling up to 61.9 million of its shares over 12 months from March 12.
Meanwhile, Beach Energy this week revealed it had completed stage one of the drilling program within the ATP 855 permit with stage two set to start in March.
Beach managing director Reg Nelson says the drilling program had achieved all technical objectives and collected a significant volume of date as "we continue to progress our understanding of this deep gas play".
"Should the ultimate goal of commercialisation be achieved, the Nappamerri Trough natural gas resource will be uniquely positioned to service east coast gas market demand for many years to come," he says.
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