“The farmout to KNOC and SCG is an important deal for Nexus in terms of funding and a valuable ongoing relationship,” said managing director Ian Tchacos.

KNOC and SCG are earning 50% in Nexus' VIC/P56 and VIC/P49. The Korean companies will fund the bulk of the drilling costs to a maximum of A$15 million in the two permits, beginning with the Culverin/Scimitar well in VIC/P56.

Nexus’ overall program will consist of five exploration prospects in three permits, as well as the appraisal of the Longtom gas field.

Each of these prospects had substantial reserves potential, and cumulatively they offered exposure to reserves potential in excess of 135 million barrels of oil equivalent net to Nexus, the company claimed.

The exploration drilling will be conducted at the Galloway, Fur Seal, Culverin, Scimitar and Upper Longtom prospects.

Galloway, in the western part of Vic/P39(v), is defined on 2D seismic data at Top Latrobe and Intra Latrobe levels.

It is a simple anticlinal feature analogous to the Seahorse and Wirrah oilfields 15-25km to the south. It has the potential to contain mean oil reserves of 28 million barrels. Nexus expected interest, post farm-out, is 50%. Nexus is the operator.

Planning is also well advanced to drill the well in the coastal permit Vic/P39(v) in February 2006 as a deviated well from an onshore location using a land rig.

All of the other prospects will be drilled using the Ocean Patriot semi-submersible rig. Firm slots have been booked for this rig.

Fur Seal in Vic/P54 is due to spud in October. It is defined on 3D seismic data and lies midway between the Moonfish and Sunfish oilfields. It is formed by the juxtaposition of Intra Latrobe reservoir beds against an Eocene-aged channel in the western part of the lease. It has the potential to contain mean oil reserves of 29 million barrels. Apache is the operator and Nexus’ interest is 37.5%.

Culverin and Scimitar in Vic/P56 are defined on 3D seismic data. The Culverin/Scimitar well is due to spud in November.

Culverin is at Top Latrobe level in the eastern part of the permit. It is a large structure with the potential to contain mean oil reserves of 97 million barrels.

Scimitar underlies the Culverin prospect at the deeper Intra Latrobe level and is analogous to the Basker Manta fields, which lie about 12km north. It is expected to contain a mixture of oil and gas and could contain mean oil reserves of 63 million barrels. Nexus has 50% in Vic/P56 and is the operator.

The “Longtom Upper” exploration prospect and Longtom field appraisal well in Vic/P54 are due to spud in March 2006. While Apache is the operator in the rest of the permit, Nexus has taken sole risk for the Longtom block and is looking for a farminee. Nexus plans to retain 50% of this block.

The Longtom-3 well is designed to appraise the sands successfully tested in the Longtom-2 well. It will also intersect potential gas-bearing sands above the existing Longtom accumulation.

These sands, recently identified as gas anomalies on reprocessed seismic data, have not been penetrated by either Longtom-1 or Longtom-2, and have the potential to contain 250 billion cubic feet of gas reserves, in addition to other reserves already identified in the Longtom field.

The well has been designed as a potential development well and will be tested for production capacity of the individual producing sand groups.

Nexus said appraisal and development of the Longtom gas field remained its key goal.

Nexus commissioned Gaffney, Cline & Associates to independently review Longtom’s resource volumes. Its estimates of P(90), P(50) and P(10) recoverable gas resources for the Longtom field are 193bcf, 316bcf and 435bcf respectively.