28 July 2014

ASX Announcement Nexus Energy Limited (Administrators Appointed)(ASX:NXS) Variation of Title Conditions Crux Retention Lease AC/RL9

On 23 July 2014, the National Offshore Petroleum Titles Administrator (NOPTA) approved a Variation of Title Conditions to the Petroleum Retention Lease AC/RL9 (Crux Title) following a variation application by the Crux Titleholders.
The Crux Titleholders comprise:

Nexus Energy WA Pty Ltd (wholly owned subsidiary of Nexus Energy Limited (Administrators

Appointed), holding a 15% interest in the Crux Title;
Shell Development (Australia) Proprietary Limited (Operator), holding an 82% interest in the Crux
Title; and

Osaka Gas Crux Pty Ltd, holding a 3% interest in the Crux Title.

The terms of the Crux Title (originally issued on 20 February 2013) provided for drilling activities (comprising the drilling of the Auriga exploration well and plugging and abandonment activities for the Crux-2, Crux-3 and Crux-4 wells) (Drilling Campaign) to be undertaken as part of the Year 2 work program, requiring completion by February 2015.
The application to vary the Crux Title conditions was made by the Crux Titleholders to accommodate a deferral of the Drilling Campaign to following the 2014/2015 cyclone season (typically running from November 2014 to end-April 2015).
The variation to the Crux Title conditions provide that the original detailed work program activities for Years
2 through to Year 5 be consolidated with all activities now being required to be completed within the remaining term of the Crux Title (i.e. by February 2018).
A summary of the revised detailed work program to progress the commercialisation of the Crux Title include:

Year 1: Seismic reprocessing, inversion and interpretation

Procurement of long lead items for Auriga well with approvals for well proposal and well design.

Ye

ars 2-5: Drilling approvals and drilling of Auriga prospect with intent of proving up gas presence

Plugging and abandonment activities for the Crux-2, Crux-3 and Crux-4 wells.

Subsurface studies identifying further appraisal requirements and commercial negotiations with 3rd party gas titleholders.

Submission of re-evaluation of commercial viability of petroleum production in the lease area, including identification of any potential barriers to commercial viability.

Planning and studies, including conceptual development studies.


Provide a report (within 90 days of start of year 5) outlining the final development concept(s) for the Crux field.

The timing of the (now deferred) Drilling Campaign has not yet been confirmed by the Operator

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