Nexus Confirms Higher Liquids Content in Crux Gas

Nexus Energy Limited said that gas samples recovered from the Crux-2 ST1 well confirm a significant increase in the condensate content of gas in the field. The appraisal well is located in Exploration Permit AC/P23 in the offshore Browse Basin, Western Australia.

The increase in the condensate content of the gas is expected to be economically beneficial for the recycle project as it will result in a proportionate increase in condensate resources and condensate rates providing a more capital efficient development . This is because significantly higher condensate production rates can be achieved from the currently proposed gas recycle rate.

Twelve separate down hole samples were obtained from the Crux-2 well and the Crux-2 ST1 well and the samples indicate that the Crux gas contains approximately 35 barrels of condensate per million standard cubic feet of reservoir gas. This is a 25% increase over the value measured in the Crux-1 well of 28 barrels per million standard cubic feet of reservoir gas. The measurements taken in the Crux-2 and Crux-2 ST1 well were obtained using a down hole sampling tool under controlled reservoir conditions providing much more accurate measure of liquids ratio than the sampling obtained from surface well testing facilities utilized at Crux-1.

The new value is 13% higher than the condensate gas ratio of 31 barrels per million standard cubic feet of reservoir gas which was used to calculate the best case estimate of contingent condensate resources of 55 million barrels as presented in Nexus' 15 March 2007 ASX release, titled "Crux Liquids Project Review."

Importantly for the viability of the liquids project, the sampling confirms that the condensate content of the gas is uniform over the entire 256 meter gas column encountered in the original Crux-2 well bore and the current sidetrack (including the younger sands encountered at the top of the sidetrack well bore).

Nexus Managing Director, Ian Tchacos said, "Nexus is particularly pleased that the side track well results have confirmed an increased liquids content as well as large gas intersection in the A sand ,and an additional younger reservoir gas sand section. The combination of these results is expected to have a positive impact on contingent resource condensate estimates compared to those released on 15 March 2007."

The information gained from the Crux-2 well and the Crux-2 ST1 well will now be integrated into the field geological model which will enable Nexus to provide an updated estimate of recoverable field volume in the near future.

The sole (100%) participant in the well is Nexus Energy WA Pty Ltd.