Nexus will receive A$75 million for Osaka Gas' interest in the Crux liquids project upon receipt of regulatory approvals for the transaction. The implied value of the project based on this transaction is A$500 million.
Nexus and Osaka Gas have also agreed to enter into further agreements for the initiation of joint studies intended to identify and secure exploration opportunities which will target significant potential gas resources.
Nexus completed front end engineering studies for the Crux liquids project in February 2007 and recently completed drilling on the Crux-2 and Crux-2 ST1 appraisal wells. Nexus and Osaka Gas have committed to a work program which is expected to see the Crux liquids project reach a financial investment decision in the second quarter of 2008.
Osaka Gas is capitalized at A$9.1 billion and has been operating for over 100 years. The company is the seventh largest gas utility in the world (based on 2006 sales revenue) importing over 7 million tonnes of LNG per year. Osaka Gas owns and operates two LNG receiving terminals, a commercial and domestic gas distribution system and power generating assets in the Kansai region of Japan.
Nexus managing director, Ian Tchacos, said "Nexus is delighted to be joined by Osaka Gas in the Crux liquids project. Osaka Gas brings considerable financial capacity to the project which places Nexus in a position to accelerate the progress of the Crux field development. The transaction also reflects the resource potential and value of the project and lays the foundations for a strong partnership with a respected downstream industry player with extensive experience in Asia Pacific LNG and gas markets."
"Osaka Gas is an industry leader with a long track record in the downstream LNG business and brings to Nexus additional financial support and marketing capability enhancing our competitive standing in both the Australian oil and gas sector and the Asia Pacific LNG and gas market." Mr. Tchacos added.
The Crux field in exploration permit AC/P23, in the Browse basin offshore Western Australia was acquired by Nexus in January 2006. The field is 100km north east of the 100% Nexus owned permit, WA-377-P, which contains the Echuca Shoals gas discovery.
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