ICON DRILLS TOWARD MARKET CAP OF $300M

ASX-listed Icon Energy will undertake a capital raising venture for a program worth around $20 million via a share purchase plan (SPP) to significantly increase its coal seam gas (CSG) reserves. The Gold Coast-based CSG explorer will look to increase its market cap to $300 million in 18 months – an increase of around $180 million.

Trading of Icon stock has been halted until Monday when full details of the SPP will be released. Shares closed at 36c.

At today’s AGM on the Gold Coast, Icon managing director Ray James, told shareholders that the company’s $36 million joint venture with the State Government-owned Stanwell Corporation is set to generate electricity for thousands of Queenslanders. Stanwell currently supplies power to 30 per cent of the grid.

Icon is planning a further 30-40 wells in the Surat basin, on farming land to the north of Goondiwindi; in Roma, north Queensland; and in South Australia over the next 18 months.

“This industry is not being dragged down by the global financial crisis, in fact we are expanding and going ahead,” says James, a major shareholder of Icon stock.

“The whole coal seam gas industry is a bit of an enigma at the moment and is one of the few industries that are moving ahead on the stock market in Australia.

“We are looking at trying to add some institutional investors to the register, particularly a couple of bigger ones, following a road show that we had last week. In relation to the shareholders it can only be by way of a rights issue. At this point in time I can say that would be done as the same price as any placement. The shareholders will not be disadvantaged in regard to any placement. It’s the view of the board that there be equal treatment.”

Shareholders today voted the re-election of Stephen Barry (chairman of TSS) as a director, while Derek Murphy and Keith Hilless were elected to the board as non executive directors. All but five unit holders voted in favour – the same five who unsuccessfully attempted a management takeover of the company last year.

“We have a resource that is clean, cleaner than anything else and it will be utilised for a long time,” says James.

Earlier today Commonwealth Bank senior economist of global markets Michael Workman, told members of the Australian Institute of Company Directors that CSG exploration in Queensland would likely offset forecast unemployment of 8.5 per cent.

Don’t miss our comprehensive cover story on Ray James in the June issue of Gold Coast Business News.