Australia: Nexus Energy Enters Deal with Wood Group for Crux Liquids Project

Nexus Energy Limited announces that it has executed an agreement with the Wood Group for project management services in relation to the Crux liquids project.

Wood Group is a leading worldwide Engineering and Project Management services provider, having around 34,000 employees, with core strengths in Process Design, Subsea Developments and Pipelines, Operations and Maintenance, Rotating Equipment and Power Management Systems, supporting clients throughout the entire lifecycle from concept and FEED studies on to detail design, construction, commissioning and operations and maintenance.

As stated in the 11 April 2011 announcement in relation to the fully underwritten accelerated renounceable entitlement offer, part of the proceeds from the capital raising will be used to fund the Crux liquids project through to Final Investment Decision (FID) this calendar year. The appointment of the Wood Group is an important step in achieving this key corporate objective.

About Crux

The Crux field is located in Production Licence AC/L9 in the Browse Basin, offshore Western Australia and was acquired by Nexus in January 2006.

Nexus is operator of AC/L9 and holds 85% equity in the liquids resource with joint venture partner Osaka Gas holding the remaining 15%. Shell Development Australia holds the rights to 100% of the gas resource within the permit and under the current contract can access the gas in 2021. Average water depth is around 170 meters with the major Crux reservoir at 3,800 meters.

Five intersections of the Crux field have been drilled to date and around 280km2 of 3D seismic has been collected to delineate the structure. Importantly the Crux reservoir has high permeability and high porosity and the gas is low in CO2 and other impurities. In addition to the Crux gas condensate resource, upside potential has been identified around the undrilled Auriga and Caleum structures.

It is proposed to develop the Crux field as a liquids stripping project. The development concept is based on four subsea production wells and four subsea gas re-injection wells tied back to a custom built leased floating production storage and offloading vessel (FPSO).

Crux appraisal and engineering has matured to a point where the proposed liquids project could be sanctioned within a short period of time. Nexus has received interest in Crux from domestic and international oil companies and continues to explore the option of a part sell-down and a development of the liquids project with the introduction of an additional new partner.

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Source:Wood Group , May 9, 2011;