Nexus to Raise A$93 Million Via Placement

Nexus Energy Limited has completed the first tranche placement of new shares to Viking Shipping Limited raising A$35 million at A$1.35 per share. Viking may also subscribe for a further placement of A$58 million at A$1.35 per share by the end of July 2007 to obtain an exclusive arrangement for the supply of a Floating Storage Production and Offloading facility for the Crux liquids project pursuant to a Floating Production Facility Option Agreement between Nexus and a subsidiary of Viking.

Nexus has issued 25.9 million ordinary shares for the tranche 1 placement and subject to completion of the second tranche will issue a further 42.8 million ordinary shares for the tranche 2 placement. The completion of both tranches will result in the total issue of 68.7 million ordinary shares, being the equivalent of 15% of Nexus' prior existing issued capital.

Under the Option Agreement, Vanguard Oil and Gas International, a subsidiary of Viking, will provide Nexus with a leased FPSO on pre-agreed terms based on a transparent calculation of lease rates for deployment on the Crux liquids project. The proceeds from the placement will be used to fund the further development of the Crux and Longtom projects. Nexus will benefit from the injection of capital on 'better than market' terms as well as an option to secure a fully termed proposal for the development of Crux by the end of the third quarter of 2007.

In addition, Nexus expects to develop a strategic relationship with Viking, a company with extensive experience and relationships in the shipping business.

Vanguard has previous Australian FPSO experience and with the financial support from its parent (Viking) and is expected to assist Nexus in maximising the value from the highly prospective Crux liquids project. Vanguard is in the process of purchasing up to three vessels for FPSO deployment in a range of oil field development applications.

Nexus will gain access to the expertise and ship conversion and construction relationships of Thome Ship Management ("Thome"), one of Asia's largest Asian-based ship management companies employing some 5,500 seagoing and shore based staff.

Thome is presently supervising the construction of more than 40 new vessels, is involved with the management of several FPSOs and recently completed a full floating storage and offloading vessel conversion.

Nexus managing director, Ian Tchacos, said "The agreement announced today further strengthens Nexus's capital base and our access to critical skills by creating a strong alignment with an important industry partner.

Viking is highly motivated to assist us with the development of the Crux liquids project and other potential projects, which require floating production solutions. It is an important milestone in bringing the very significant and valuable Crux project closer to development."

Viking commented, "Viking considers Nexus to be a very attractive investment opportunity offering an exciting pipeline of projects supported by a very capable management team. Viking and Vanguard consider Nexus to be an excellent platform through which the parties may jointly pursue other upstream oil and gas opportunities requiring floating solutions.


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