Nexus Taps SBM to Construct FPSO for Crux Liquids Project

Nexus has signed an agreement with Single Buoy Moorings Inc ("SBM") to enter into a period of exclusive negotiations for the integrated build, supply and operation of the Crux liquids project floating production storage and offloading vessel ("FPSO").

SBM has already developed an intimate knowledge of the project through its involvement in the detailed engineering and design of the gas processing, liquids extraction and compression facilities. As recently announced, Nexus has now been offered the production license for the area.

SBM is the world's largest provider of floating production systems and these arrangements with a contractor with proven technical credentials and financial capability are a significant boost to the Crux liquids project.

Nexus has also finalized a settlement agreement with Viking (formerly Vanguard) Oil and Gas International Limited and Viking Shipping Limited (together, "Viking") following the termination of a Memorandum of Agreement (MOA) for the supply of a FPSO for the Crux liquids project signed in 2007. Under the terms of the settlement, Nexus will pay Viking US $12 million, by no later than end May 2009, in respect of services received and all claims under the MOA, with a further contingent payment of US $5 million to be made in 2009 only on certain major divestment and liquidity events.

Nexus' managing director, Ian Tchacos said, "I am pleased that we have finalized our FPSO arrangements with Viking to the satisfaction of both parties. The payment represents fair value for Viking’s contribution to the technical definition of the Crux liquids project. Viking is a major shareholder and we believe their ongoing support is an important factor in achieving Nexus' asset and corporate objectives. Importantly Nexus is now able to pursue an alternate FPSO option on behalf of the Crux joint venture with a view to securing a technically robust and financeable development option."

The Crux field was acquired by Nexus in January 2006. It is located in exploration permit AC/P23, in the Browse Basin, offshore Western Australia.