Apache will assume operatorship of the permit and will earn a 62.5% participating interest in by funding 94% of the estimated costs to undertake a two well drilling program, including a Longtom appraisal well and an exploration well expected to be on the Grayling prospect in the permit.

Apache has already begun planning the drilling program with operations planned to begin during October 2004 with the two wells being drilled back to back.

The drilling program will target the Longtom gas appraisal opportunity, which has mean reserves calculated at 270 Bcf, and the Grayling prospect with mean oil potential calculated by Nexus of 104 mmbbls. Both Longtom and Grayling are defined on 3-D seismic.

Nexus expects to drill up to six appraisal and exploration wells in its acreage portfolio over the next 12 to 18 months.