Longtom-4 Offshore Victoria Reaches Total Depth

Longtom Field
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Nexus Energy has advised that as at 06:00am (AEST) the Longtom-4 development well in Production License VIC/L29 in the Gippsland Basin, offshore Victoria, had reached a total depth of 4,648 meters measured depth below the rotary table (MDRT) in the 9 1/2 inch horizontal hole.

Since last week, an additional 1,248 meters of horizontal section has been drilled including approximately 560 meters of gas sands. When combined with the 200 meters reported last week, the well has drilled through a total of 760 meters of gas sands. Longtom-4 has comfortably met pre-drill expectations as it has intersected the anticipated intervals of the two deepest sands with better than expected reservoir quality. These sands are interpreted to contain the major portion of gas reserves in this part of the field.

The forward program is to set 7 inch liner along the length of the well and then complete a comprehensive production test. The well will then be 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 of 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 stabilization, storage and export of the condensate.

Nexus' managing director, Ian Tchacos said, "I am pleased that drilling of the horizontal section of Longtom-4 has been completed with the well intersecting gas charged sands in the major reservoir units as anticipated. This is a very successful outcome and is a significant step towards first production in mid 2009."

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