Nexus' revised best estimate of contingent resources at Crux has increased by 48% to 71 MMbbl condensate liquids and 2 Tcf of gas.
Based on the upgrade in Nexus' best estimate contingent resources at Crux and the current level of interest in Crux by several domestic and international oil and gas companies, Nexus expects to secure a suitable farmin partner for the Crux project in the near future.
"We are delighted with the progress being made at Crux. The results from the new 3-D seismic data are very positive, confirming our earlier expectations that our estimates of the resource potential at Crux would increase substantially with the availability of better seismic data," Nexus Managing Director Ian Tchacos said.
Nexus' best estimate contingent resource estimates for Crux are similar to Gaffney, Cline and Associates high estimate of the Crux field contingent resources of 71.9 MMbbl condensate and 1.9 Tcf gas contained in Nexus' Target's Statement. These estimates by Gaffney Cline were based on previous 3-D seismic data acquired as part of a larger regional survey that was not acquired optimally for the Crux field. The new 3-D seismic survey was acquired specifically for Crux providing much higher quality data for mapping the field.
The revised contingent resource estimates based on the new seismic have not yet been audited. Nexus has engaged Gaffney Cline to review the new information on Crux and provide an independent audit of the contingent resource estimates. It is Nexus' intention to complete this by the end of June 2006. While the results of the audit will not be known until that time and may vary from Nexus' revised estimates, Nexus is confident the audit will confirm management's view that the new data supports a significant increase to the contingent resource estimates for Crux.
Crux is a substantial gas and condensate resource in an emerging LNG province. Nexus currently holds 100% interest in the Crux field and is appraising the asset with the intention of commencing its development phase by the second quarter of 2007. The field lies some 100 km to the north east of the 100% Nexus owned WA-377-P permit which contains the significant Echuca Shoals gas discovery which is adjacent to Inpex's Ichthys gas field currently being considered for development as an LNG project.
Upon acquisition of the Crux asset Nexus commissioned a new 280 square kilometer 3D seismic survey over the Crux field. This survey was completed in March 2006 and new structure maps for the Crux field have been generated using the new velocity data.
The next step in the forward plan for the project will be the completion of the front end engineering and design (FEED) which will incorporate the results from both the new 3D seismic data and the Crux #2 appraisal well. Preparation for the drilling of the Crux #2 appraisal well in Q4 of this calendar year is underway. Nexus is actively seeking a rig slot and is purchasing the required drilling materials which will allow the well to be drilled when a slot becomes available.
"Crux is already a significant gas and liquids resource, but the larger potential volumes which we have been able to identify have positive implications for the appraisal and potential development of the Crux gas condensate project as well as the potential future utilization of Crux gas in a future Browse basin LNG project," Mr. Tchacos added.
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