Ann: Scheme Booklet and Reinstatement of Shares , page-3

re: Ann: Scheme Booklet and Reinstatement of ... NexusBattle and Shareholders,

Well, its quite late and I've been wading through the Independent Experts report and trying to make head-or-tails of it by comparing their valuation of $7M shareholder equity to the $159M book value in the 31dec13 accounts.

There are four areas that I'm not understanding and would appreciate it if someone with more knowledge of Oil&Gas accounting might be able to help me with.

(1) Why does a $19.1M asset of prepaid toll fees in the 31dec13 accounts have no value in the independant experts report? What are these and is it an asset that should be in the company valuation?

(2) The independent expert states (page 37) "As at 31 December 2013, the development asset was recorded at AUD 247 million. This balance is inclusive of plug and abandonment cost of approximately AUD 45 million, resulting in a net balance of AUD 202 million, which is within the range of our selected value (including value associated with additional resources). We have treated the plug and abandonment costs as a surplus liability (refer to Section 5.6)."

HOWEVER, their report gives a preferred value of $180M for the development asset and then ALSO DEDUCTS the $45M as a surplus liability giving a NET value of $135M for CRUX.

HOW IS $202M NET BOOK VALUE "IN THE RANGE OF" THEIR $135M VALUATION? HAVE THEY DOUBLE SUBTRACTED THE PLUG AND ABANDONMENT COSTS, or simply trying to mislead us into thinking that they are valuing close to book value for CRUX?

(3) There appears to be no valuation assigned in the report for compensation from Santos for the outage cause by the electrical fault last year that ceased production for three or so months? In fact the company is completely silent on this subject!

(4) The appraisal and exploration asset valuation of $23.8M seems very light on! Does anyone with deeper knowledge of these assets have a view on the values assigned to the individual prospects?

Items (1) and (2) give a discrepancy of $65M or 5 cents per share, so I'd greatly appreciate it if someone more knowledgeable can look into these items.

Time for bed now!

Good luck to NXS holders and enjoy the ride tomorrow ... hopefully we don't dip too much below 2 cents.

FlyingDr.