Nexus Rejects Anzon's Hostile Takeover Bid
International TME Resources reports that the operator of VIC/P54 offshore Australia, Nexus Energy, has rejected a hostile $171 million takeover bid from Anzon Australia. Nexus described the bid as inadequate.
Nexus has become hot property because of the
fast-maturing status of its key developments--the Longtom Gas Field on
VIC/P54 in the Bass Strait, located on TME's overriding royalty interest (ORRI) and one other project in the
The Longtom Gas Field is located in the Gippsland Basin and was discovered by BHP in 1995. It was considered sub-commercial (70-120bcf) at the time, however, due to the lack of maturity of the gas markets and the interpreted reservoir quality. A 386-plus meter gas column was intersected in the Emperor Formation in Longtom-1.
Longtom-2 was drilled in late 2004. A 400-plus meter gas column was confirmed within the structure. The lower reservoir section in Longtom-2 flowed at a stabilized rate of 18-19 mmcf/day over a 12 hour period--an excellent result, confirming the commercial potential of the previously untested lower reservoir section in Longtom. The upper reservoir section did not flow gas to surface--two third-party engineers confirmed a subsurface test valve did not open. As a result, the well could not flow against the closed valve. A core from the upper reservoir section was taken and analyzed, confirming an excellent reservoir section highly capable of flowing gas. No gas-water contact has been intersected at Longtom to-date, suggesting deeper reservoir potential exists.
While Longtom-2 pointed to mechanical problems as the cause of poor flow rates from the main reservoir, seismic reprocessing and amplitude variation with offset (AVO) work indicates a strong gas anomaly in these sands as well as an untested anomaly in sands above the primary zone. Thus, Longtom-3 will be a multi-purpose appraisal seeking confirmation of the lateral extent of the lower reservoir as well as exploration of the anomaly higher in the stratigraphic column.
A good result from Longtom-3 would clarify the independent assessment from Gaffney Cline & Associates for the Longtom Gas Field to possibly contain estimated reserves of 316 billion cubic feet and possibly add a further 250 billion cubic feet, which at the moment is listed as possible in the upper reservoir.
TME's ORRI under VIC/P54 is located in the prolific Gippsland Basin of the Bass Strait and consists of 155,676 gross acres.
TME also announced that the joint venture partners of the offshore VIC/P54 have successfully raised $44.2 million. A portion of the capital raised will enable the operator to advance the commercialization of the Longtom Gas Field. The Longtom field contains an estimated 316 BCF of recoverable gas. The Longtom-3 well is expected to drill by May or June of 2006 at an estimated drilling and completion cost of approximately $A35,000,000.
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