announcement here Progress Update - Longtom #2 Core...

announcement here Progress Update - Longtom #2 Core Analyses
SUMMARY
Initial results have been obtained from analysis of core samples recovered from the Longtom #2
well. These results are part of a program of measurements and experiments to determine the
Longtom reservoir flow characteristics and other key properties, described in greater detail below.
Nexus is encouraged by the results obtained to date.
DETAIL
Nexus Energy indicated at the conclusion of the Longtom #2 well in late December 2004 that a
complete analysis of the core recovered from the well (over the interval 2112 – 2148 measured
depth below rotary table) would take approximately 3 months and would be available in late March
2005. Given the importance of the core results in determining the flow and reserves potential of the
upper sands encountered in Longtom, the Company will endeavour to provide relevant information
to its shareholders as it becomes available.
The core analysis program will involve at least the following work:
1. Slabbing the core – the process of laying out the core and cutting the core in half along its
vertical axis.
2. Creation of a Strip Log – a detailed description of the core along its length indicating
important properties including porosity, rock types, physical structures (such as faults and
laminations etc), fossils and the likely depositional environments of the sediments
3. Obtain spot permeabilities – injecting air into points along the core’s axis to determine the
comparative permeabilities at various points along the core.
4. Cutting plugs from the core for flooding and reverse flow experiments to determine rock
permeabilities in representative samples under reservoir temperature and pressure conditions
and the effects of drilling fluids on the permeability
5. Petrological analysis – determining the composition of the sediments, cementing materials
and clays.
6. Electrical measurement – determining the electrical properties of the core
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
Items 1 – 3 are now complete. Nexus believes the initial visual inspection and spot permeabilities
are encouraging in terms of the likely flow potential of the reservoir sections in the Longtom # 2
core. The initial spot permeability measurements made on the core to date have provided an
indication of the permeability profile along the core for data taken from the core at surface
conditions. These values are higher than the permeabilities expected under subsurface conditions
where the reservoir rocks are subject to much higher pressures and temperatures. The additional
permeability analysis that will now be undertaken (Item 4) will simulate down-hole conditions on
cylindrical plugs taken along the core. These plugs have already been taken from the core for this
next phase of work with further results expected to be available over the next 2 weeks. These results
will enable Nexus to simulate the flow potential of the upper sands at Longtom in an undamaged
reservoir.
Other benefits from the work include:
• evaluation of the effects of various drilling muds on reservoir permeability allowing the least
damaging mud to be used in future
• assisting in the calibration of electrical measurements taken while drilling to provide more
accurate reservoir properties such as porosity and gas saturation
• providing an understanding of the way the reservoir was deposited allowing a more accurate
reservoir model which assists with reserves confidence and appraisal strategies
• determining the potential benefit of well stimulation programmes on productivity if required
to enhance production rates.
Other Studies:
Given the importance of Longtom to the Company, Nexus is independently remapping the field to
determine the likely range of recoverable gas volumes and conducting other engineering studies as
part of a programme focussed on rapidly appraising and commercialising this asset. The Company
plans to release further relevant information in relation to Longtom as it becomes available in order
to keep its shareholders informed on progress.
For further information please contact:
Ian Tchacos
Managing Director
Phone: 03 9660 2500
Fax: 03 9654 9303
Website: www.nexusenergy.com.au