The share subscription agreement is conditional on the ATP 626P farm-in agreement, the renewal of that permit and approval by Icon shareholders. In addition, Santos will pay $100,000 for an unconditional 20 million options in the company.

Under the ATP 626P farm-in agreement, Santos has been appointed operator and has committed to drilling and completing the Stitch-1 well.

Icon told the ASX that this well could be drilled within the next few months, subject to rig availability and selecting a drilling location.

Following the farm-in, which is subject to the permit being renewed by the Queensland Department of Natural Resources and Mines, Santos and Icon would be 50:50 joint venture partners in ATP 626P.

Several drilling opportunities have been interpreted in the permit and an active ongoing seismic and drilling program is expected following the drilling of Stitch-1, Icon said.

The well would be located on the Moonie Fault and on trend to the Moonie Oilfield with the same reservoir objective. Icon said access and proximity to the Moonie pipeline infrastructure, 40km away, meant this prospect was an attractive target.

Santos has also signed a HOA with Icon over ATP 765P and 766P in the Cooper-Eromanga Basin, south-west Queensland.

Under this agreement, Santos will be appointed operator and has agreed to record 150km of new 2D and 160km of 3D seismic data, in addition to drilling one well in each area.

Following this program, the working interest would be Santos (63%), Icon Energy (27.75%), Deka Resources (4.625%) and Well Traced (4.625%).

ATP 765P and 766P are currently under application, with native title agreements to be negotiated before seismic data can be recorded and a well located, Icon said.

Santos is planning an intensive Cooper-Eromanga Basin drilling program over the next few years, involving both conventional rigs and highly mobile light rigs capable of economically accessing small, shallow pools of oil.