re: can someone please post the ann ? Sorry about the...

re: can someone please post the ann ? Sorry about the formatting

Nexus Energy Limited ABN 64 058 818 278 . 17 Bennetts Lane Melbourne Victoria 3000
Phone: +613 9660 2500 Fax: +613 9654 9303
Website: www.nexusenergy.com.au
Nexus Energy moves to accelerate appraisal
of the Longtom gas accumulation
Nexus is pleased to announce that it has submitted an appraisal drilling program to the Vic/P54 Joint
Venture for the Longtom Gas discovery.
The drilling of the Longtom #3 as an appraisal well is expected in September 2005 using the Ocean Patriot
drilling rig.
The drilling program w ill ensure the rapid appraisal of the field which if successful will lead to its early
development. The w ell w ill be designed such that it can be suspended as a future commercial gas
producer that can be rapidly bought into production.
Substantial Increase in Nexus Recoverable Gas Volume Estimates
Final permeability results from the core recovered from Longtom #2 are very positive. Nexus’ analysis
indicates the upper sands at Longtom w ill flow at commercial rates in an appropriately drilled and
completed well. Nexus’ mapping and engineering studies indicate that the Longtom field contains
commercial quantities of gas with potential large reserves upside.
Nexus Energy Limited ABN 64 058 818 278 . 17 Bennetts Lane Melbourne Victoria 3000
Phone: +613 9660 2500 Fax: +613 9654 9303
Website: www.nexusenergy.com.au
Nexus has revised the recoverable gas volume estimates based on geological data obtained from the
Longtom #2 well (including the core data recovered from the sidetrack). Current indications are that,
based upon a successful Longtom #3 appraisal well, potential Proved + Probable recoverable gas volumes
at Longtom could be in excess of 300 Bcf, with potential Proved, Probable and Possible gas volumes of up
to 500 Bcf. Victoria annually consumes approximately 220 Bcf of gas per year at a wholesale value of
around $600 million.
Core Sample Results
The permeabilities obtained from special core analysis indicate the upper sands of the Longtom #2 w ell
could potentially produce gas at rates in excess of that recovered from the Lower sands which flowed at
approximately 19 million cubic feet per day during Test #1. Reservoir damage through drilling could have
been the reason these sands did not flow. Alternatively, analysis of pressure data from Test #2 by Nexus
indicates that the well may not have produced gas due to a mechanical malfunction of the test tools.
Reservoir simulation studies completed by Nexus indicate that Longtom development wells w ill produce at
commercial rates for a period of up to 10 years with out intervention.
Development Options
Nexus is considering several different development options for the Longtom gas field including the
possibility of a stand alone development similar to the nearby Patricia Baleen field approximately 12 km
away. These studies are being conducted by Worley engineering who are also providing engineering
support for the development of the Casino field.
Stand alone option
Tie-back option to Patricia Baleen
The objectives of the Longtom #3 w ell are to confirm the commercial gas flow and reserve potential of the
upper sands of the Longtom reservoirs and the lateral extent of the lower sands by drilling horizontally
through the reservoir. It is planned to suspend the well as a producer.
Rapid Timetable
Nexus has taken a very pro-active approach in tabling this proposal to the Operator, Apache. The
Company has been motivated by the large value potential at Longtom, the current rig availability and the
possibility of gas sales as early as late 2006. Under the Joint Venture agreement between Nexus and
Apache, Apache has until mid April 2005 to decide whether it shall participate in the Longtom gas appraisal
program. If Apache decides not to participate in the appraisal program, Nexus intends to proceed on a
stand alone basis thereby gaining a 100% share of any production from Longtom.
Conclusion
Longtom is potentially a very substantial resource capable of delivering substantial long term cash flow and
value for Nexus. Longtom is ideally located to underpin the development of an Eastern Gas hub which can
provide gas into both Melbourne and Sydney via the Eastern Gas Pipeline. Nexus has assembled an
experienced technical team w hich has enabled the Company to formulate an appraisal program w hich w ill
enable rapid development of this asset.
For further information please contact:
Ian Tchacos - Managing Director
Keith Edwards – Engineering & New Business Manager
Phone: 03 9660 2500
Fax: 03 9654 9303
Website: www.nexusenergy.com.au