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Icon is poised to be a real growth company with unconventional gas resources heading Icon's asset list.

Getting these resources proven and into commercial production is the challenge for Icon as it is a small market cap company. Securing funding by equity investors in Icon's securities and with joint venture partners in the most promising areas is necessary to develop these resources. It is also necessary to monetize gas assets by way of Gas Sales Contracts.

Stanwell Corporation has approved a new drilling program consisting of two wells to be located in the northern panhandle of ATP 626P, together with an additional testing program on the Lydia pilot. Details of this program will be released when the rig is ready to mobilize to the tenement, which (at the time of going to press) is expected to be in the last quarter of 2011.

A highlight of the year was the signing of the LNG Sales Agreement with Shantou SinoEnergy Co. Ltd in Shantou City in China. This Agreement is for the supply of 40 million tonnes of LNG over twenty years, with emerging opportunities having the potential to enable Icon to more than double this contract over the same period. The current global demand for LNG created this opportunity for Icon and is expected to create future opportunities for the Company.

Operationally, it is now Icon's key focus to prove the necessary 2.5TCF of reserves to supply both the China and Stanwell Contracts.

There is no shortage of gas reserves in the world and Contracts to supply gas will become limited. The building of the relationships around these Contracts will therefore ensure the commercial success of Icon, while other companies might be left with unmarketable gas reserves. Supply under Icon's Chinese Contract does not begin before 2016 and remains subject to various conditions precedent, all of which must be met before an FID decision is made.

Importantly , Icon also settled a dispute with Beach Energy in July this year and has subsequently farmed out a 40% interest in ATP 855P to Beach. The agreement reached with Beach brings several advantages to Icon. Not only will Icon be carried through most of the first well, Beach has undertaken to use its new drilling rig to drill the first deep horizontal well in ATP 855P when it arrives in Australia around April 2012.

In moving towards commercialisation of the Company's assets, it is necessary to deal with the problems surrounding Coal Seam Gas (CSG) drilling and dewatering. The community has become concerned with the new technology and scale of the activity surrounding CSG and there is a degree of misinformation circulating in some sections of the general public. Within Icon Energy's operating areas we have made enormous efforts to engage the stakeholders, particularly the farmers on whose land we work. It is pleasing to report that our relationships are excellent and we have worked hard to allay any fears about our involvement on their land.

In addition, we have an excellent relationship with the Bigambal People in meeting the requirements of the Company's Cultural Heritage Agreement in our operations in ATP 626P.

Icon's interest in geothermal energy has progressed. The Company is in the process of making applications for funding and considering collaborative partners in line with discussions held with the Federal Government.

Elsewhere, plans are advancing to start drilling in PEP 170 in Victoria's Gippsland Basin. Icon has prepared and submitted the Operations Plan and the Environmental Management Plan to the Department of Primary Industries (DPI) and is proceeding to negotiate with the traditional owners and landowners ahead of commencing the program. So far two prospects have been identified for drilling.

This year has been a year of consolidation in a very difficult economic market where funds need to be utilised prudently.

I would like to thank the management and staff of Icon Energy for the position Icon has reached on a number of fronts which have set the Company up for a great future in the gas business.

Your sincerely

Chairman