Nexus Energy Drilling Ahead at Longtom-4

Nexus Energy Limited advised that the Longtom-4 development well in Production License VIC/L29 in the Gippsland Basin, offshore Victoria, was drilling ahead in 13½ inch hole at 1,835 meters measured depth below the rotary table at an inclination of 30° from vertical. Operations on the Longtom-4 development project commenced on June 21, 2008 and are expected to take approximately two months. After drilling and casing of the current hole section, well operations will include the drilling of a pilot hole, followed by the drilling, completion and production testing of the horizontal section of the well. Longtom-4 is then planned to be suspended as a future gas producer, awaiting connection to the pipeline later this year. As indicated on the schematic cross section below, the horizontal section is being drilled to intersect lengthy intervals of the two deepest sands within the Longtom field.

Longtom-4 is being drilled by the West Triton jack-up 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 for 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 kilometres away. Nexus will construct this pipeline and the associated control lines and equipment. 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 stabilisation, storage and export of the condensate.

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