Nexus to Raise $74MM for Longtom, Crux Developments

Longtom Field
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Nexus has successfully completed a placement to institutional and sophisticated investors, raising gross proceeds of approximately $31 million. Further, eligible shareholders will be invited to participate in a fully underwritten non-renounceable rights issue to raise an additional $43 million (before costs and expenses).

The placement and rights issue will strengthen Nexus' balance sheet and provide financial flexibility though to the end of 2010. Proceeds will be used to fund ongoing development of the Longtom gas project, long lead items for the Crux liquids project and general working capital.

The company's immediate priority is the start-up of the Longtom gas project, in October 2009. This capital raising avoids the requirement to consider a forced sale of assets, and provides the opportunity to deal with Nexus' interest in the Crux liquids project in a manner that maximizes shareholder value.

Placement Terms

The placement of approximately 96.8 million ordinary shares was completed at an issue price of A$0.32 per share, an 18% discount to the 5 day VWAP. Southern Cross Equities Limited ("Southern Cross") and Azure Capital Pty Ltd ("Azure") were co-lead managers for the placement. It is expected that the placement shares will be issued on September 8, 2009.

Rights Issue Terms

Following the successful completion of the placement Nexus will be inviting eligible shareholders to participate in a fully underwritten 1 for 3.75 non-renounceable rights issue at a price of A$0.22 per share, a 44% discount to the 5 day VWAP. Shares issued via the placement are
eligible to participate in the rights issue. Southern Cross has committed to fully underwrite the rights issue. The rights issue is fully sub-underwritten by Azure. Subsequent to the placement and rights issue Nexus will have approximately 940 million ordinary shares on issue.

Full details of the terms and conditions of the rights issue will be contained in the prospectus to be lodged with both ASIC and ASX and despatched to shareholders with a registered address in Australia, New Zealand, Singapore, the United Kingdom or the British Virgin Islands. The record date for the rights issue is September 17, 2009. Eligible Shareholders wishing to take up their rights will need to complete the application form that will accompany the prospectus. The closing date for acceptances and payment is October 2, 2009.

Board Appointments

Following completion of the rights issue, Symon Drake-Brockman will be invited to join the Nexus board as a non-executive director. Drake-Brockman is expected to hold around 70 million shares, or 7.3% of Nexus' diluted capital, as a result of acquiring 25 million shares under the placement and taking up his entitlement under the rights issue and sub-underwriting arrangements with Azure.


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