Sman74 and othersI spoke to the Chief Geologist...

Sman74 and others

I spoke to the Chief Geologist (Phillip........) at Nexus on the phone last evening to get an explanation about the A an B sands. I was out of the office and was not able to take notes but I was basically told:

. the A sand appears to have been eroded away at this point in the field and replaced by more recently laid down sands (Triassic).

. They still expect to encounter the B sands below

. they intend to use the reference points in this well to quickly analyse the appropriate point to side track and pick up the A and B sands...However, this is made somewhat more difficult because they have been drilling without drilling logs to save costs. But they can still pick up the correlations using the wirelines after reaching total depth.

. The company has a strongly held view that the field also extends further south than so far mapped and they have applied for a permit (to be gazetted) immediately south of AC/P23.

. Although the upside case they were trying to support may not be proven with Crux 2, I was informed that the area south could easily more than compensate, assuming they are awarded it (and the field extends there).

Seems the company is a bit disappointed but also seems the initial market reaction is an over-reaction.

regards
DF