Nexus Raises Funds for Development Program

Nexus Energy has successfully completed a placement of 94,000,000 shares at 47 cents per share to raise $44.2 million. The issue has been placed with a range of Australian and international institutions and sophisticated investors by Euroz Securities Limited and UK based Beaufort International Associates Limited.

The placement was extremely well supported by the company's existing institutional shareholders and has also seen the introduction of several new important financial institutions to the Nexus share register.

The new capital raised will enable Nexus to aggressively pursue its ongoing asset development program focused on transforming Nexus from an exploration company to a significant producer. The funds are to be deployed on the following activities:

  • drilling and appraisal of the Longtom gas field;
  • the purchase of long lead inventory items for the drilling of an appraisal well on the Crux gas condensate field
  • Engineering and feasibility studies relating to the development of the Crux gas condensate field;
  • 3D seismic acquisition and processing over the Crux field in the AC/P23 permit;
  • the purchase of existing 3D seismic data over the Echuca Shoals gas condensate field in WA 377P permit
  • ƒnThe acquisition of 3D seismic in the WA 368P permit; and ƒnongoing working capital.

The placement will be in 2 tranches:

  • ƒnTranche 1 will be utilizing Nexus' 15% placement capacity under the ASX listing rules with the issue of 36.9 million shares ($17.4 million). Settlement is expected on March 24th.
  • ƒnTranche 2 will be subject to shareholders approving the issue of 57.1 million shares ($26.8 million) at a shareholders meeting to be held on 21 April 2006, with settlement of funds expected on April 24th.

Announcing this today Nexus Managing Director Ian Tchacos said "Nexus is an asset rich company with an exceptional resource base capable of generating substantial long term cash flows. The capital raised will enable the Company to rapidly progress the commercialization of the Longtom Gas Field and the Crux Gas Condensate Field unlocking the value potential of these assets and propelling the Company from a junior explorer to a significant producer. We have the assets, the people and now the capital required to take Nexus to the next level. We are delighted to have been well supported by our current shareholders as well as new local and overseas institutional shareholders which add further depth to Nexus' shareholder base."