The decision was almost made for the company when it was unable to raise new capital to support an intensive Australian CBM appraisal and development program, whereas in the US it is in the final stages of $US45 million capital raising based on an oil development strategy in Louisiana.
Chairman Martin Pyecroft said at the company's recent AGM that on top of the $3 million raised from the sale of the Australian assets, this puts the company in a strong financial position.
Another big factor in the decision was the relatively high gas prices in North America compared to Australia. At around $6 per gigajoule at present it is roughly three times the value of Australian production, which the company said presents a real revenue source for Icon and its shareholders.
Proven reserves for the Louisiana prospects include 12.2 million barrels of oil and 15.6 bcf of gas with a total gross value of $US230 million, using current oil and gas prices. The potential for new reserves at the company's other field, Bayou Choctaw, have not been used in the financial analysis.
"Along with my fellow directors, I believe that the latter part of 2003 will see Icon enter a new era of oil and gas production in the Bayou Choctaw Field in Louisiana as funds from the capital raising become available," said Pyecroft.
