Nexus Nears Production Testing of Longtom-4

Longtom Field
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Nexus Energy Limited has advised that the Longtom-4 development well in Production License VIC/L29 in the Gippsland Basin, offshore Victoria, has reached a depth of 2,987 meters measured depth below the rotary table (MDRT) in the 9½ inch pilot hole and is preparing to run wireline logs.

The Longtom-4 development well has intersected approximately 100 meters of gas sands across a gross interval of 470 meters. The result is in line with pre-drill expectations and further confirms the ability of seismic to predict the position of gas charged reservoirs across the field.

Since last week the pilot hole has intersected a total of 80 meters of net gas sand in three separate reservoir sands which when combined with the 20 meters of gas sand previously intersected brings the total to approximately 100 meters.

Upon completion of logging the pilot hole, the well will be plugged back before the horizontal section of the well is drilled to intersect lengthy intervals of the two deepest sands. These sands are prognosed to contain the major portion of gas reserves in this part of the field. Once the horizontal section has been drilled, the Longtom-4 well will be production tested and then suspended as a future gas producer, awaiting connection to the pipeline later this year.

Longtom-4 is being drilled by the West Triton jackup and is the second development well for the Longtom gas project. The Longtom-3 well, drilled during the third quarter of 2006, is ready for commercial production with no further rig intervention required.

The flow capacity of Longtom-3 alone is expected to be sufficient to supply the anticipated maximum contract rate requirements for the Longtom field. Timing of a planned third development well will depend on the results of Longtom-4 and the field's production performance over time. The current plan assumes this well will be drilled two to three years after project start-up.

Gas produced from the Longtom wells will enter a new 12 inch pipeline and will be transported from the field to the end of Santos’ existing Patricia-Baleen pipeline, 19 kilometers away. Nexus will construct this pipeline and the associated control lines and equipment with the pipelay barge contracted and set to mobilize from Singapore by quarter end. The raw gas will then continue along the Patricia-Baleen pipeline to shore where it will be processed at Santos' existing onshore gas plant. Santos will install new equipment at the plant capable of processing the Longtom gas. This will primarily involve facilities for the stripping of condensate from the gas and the subsequent stabilisation, storage and export of the condensate.

Nexus' managing director, Ian Tchacos, said, "This excellent result continues to validate Nexus' technical and operational capabilities and I congratulate the team on the progress to date."


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