SETBACK FOR ICON'S SHALE GAS PLAN

THE arrival of a powerful exploration drill at a promising Icon Energy tenement in the Cooper Basin will be delayed until later this year.

The Ensign Rig 965, which packs 1500 horsepower, had been expected on the ground this month at the ATP855P tenement, near the Queensland-South Australia border.

The company blamed industrial disputes and bad weather in the United States for the delay in delivery of the rig until the third quarter of 2012.

The Gold Coast company’s managing director Ray James (pictured) revealed the delay in a statement to the Australian Securities Exchange (ASX) today.

“We are very disappointed with news regarding the delayed delivery of Ensign Rig 965 and we fully understand that a lot of attention is being placed on Shale Gas exploration in the Cooper Basin,” says James.

“While we would have preferred a spud [start of drilling] date this financial year, the operator (Beach Energy) informs us the first well for Ensign Rig 965 is now expected to spud in Q3 2012.”

Icon’s share price, which has been dropping since the start of April, plummeted more than 10 per cent today on the back of the news.

Icon negotiated a farm-in agreement with Beach in July last year. Beach acquired a 40 per cent interest in the tenement in exchange for funding Icon’s share of the operations to the tune of $16 million. Beach became the operator of the permit and is to drill a horizontal well in the tenement.

The independent United States Energy Information Administration’s World Shale Gas Resources Report (EIA Report) has placed the shale gas resource potential in the Cooper Basin as a whole at 342 Trillion Cubic Feet (TCF) of gas, with the recoverable equivalent at some 85 TCF.

The Ensign Rig 965 will be used to assess what is considered to be a thick, multi lithology gas accumulation which potentially extends into ATP855P from PEL218, located on the South Australian side of the trough.

Further comment has been sought from Icon but the company has not returned calls.