Nexus to Complete Longtom-4 as Gas Producer in Late 2008

Longtom Field
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Nexus Energy Limited advised that well completion operations were continuing on the Longtom-4 development well in Production Licence VIC/L29 in the Gippsland Basin, offshore Victoria.

Since last week, perforating guns have been run into the wellbore and have been fired. The forward program is to run the permanent completion equipment into the well, and perform a well bore cleanup and 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.

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