Nexus Snags Transocean Legend for Crux Project

Nexus Energy Limited announced that a Notice of Award (“NOA”) has been signed with Sedco Forex International Inc to secure the Transocean Legend semi-submersible drilling rig for the Crux liquids project. It is expected that the rig will be available to commence operations on the Crux field between February and April 2009. The timing will depend on whether optional wells are exercised by the company currently utilising the rig.

The NOA for the Transocean Legend includes a minimum duration contract of 260 days to drill five additional development wells and complete all eight wells planned for the Crux development. The proposed contract will also include optional drilling slots for Nexus to drill additional appraisal, development or exploration wells around the Crux field, such as the Auriga-1 prospect.

Importantly the timing of the drilling rig availability will enable well work to be completed in advance of the floating production storage and offloading (“FPSO”) vessel installation activities and the majority of the drilling and completion operations will be able to be undertaken outside of the potentially disruptive cyclone season.

In addition to the NOA for the drilling campaign, Letters of Intent (“LOI”) have been signed with Cameron Australasian Proprietary Limited for the supply of eight sub-sea xmas trees, and with Wellstream International Limited for the supply of the flexible sub-sea flow lines which will connect the Crux development wells to the FPSO vessel. These follow an LOI that was signed in January 2008 with GE Oil & Gas for the supply of two re-injection compressors trains for the FPSO gas processing plant. These commitments represent a spend of approximately US$ 308 million towards the Crux liquids project.

Nexus together with its partner Osaka Gas continue to work towards a Final Investment Decision for the Crux project before the end of 2008 which is in turn expected to deliver first production by the end of 2010. In the coming months Nexus expects to award further major contracts for the FPSO turret mooring swivel system.

Nexus managing director, Ian Tchacos said, “The drilling and completion work represents a major component of the Crux development work. Securing a high quality drilling rig in the current tight market is an important milestone for the Crux liquids project schedule.”

“In addition, the early commitment to key equipment components is critical to locking in project costs and maintaining the project schedule on this very valuable development.”

Crux is located in exploration permit AC/P23, in the Browse Basin, offshore Western Australia.

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