12 month price target remains at 1.99

Nexus Energy (NXS)
Apache confirms non-participation in Longtom… Share Price: $1.335
Recommendation: Buy (unchanged) Valuation: $1.52
Market Cap: $552m (fully diluted) Risk Rating: High
Irina McCreadie writes…
The author of this note holds NXS shares
Event
As expected, Apache Energy Limited (“Apache”) confirmed it will not exercise its right to buy-back into the Longtom gas
project. Nexus Energy (NXS) now owns 100% of the Longtom field.
Impact
This outcome was widely anticipated. We commented earlier this week that Apache missed its late November deadline
to formally reply to NXS and therefore Apache’s decision not to back in was quite certain.
The Longtom development plan remains on track with reserves certification and FID anticipated in January, and first gas
in the second half of 2008. After a production license has been granted for the field (expected in Q2-07) Santos (STO) will
have an option to buy up to 35% equity in the project.
Recommendation
There is no change to our Buy recommendation. Valuation remains at $1.52 and our 12 month price target remains at $1.99