The Melbourne-based mid-cap has three main projects in its asset portfolio – the Longtom gas field in Bass Strait and the Crux and Echuca Shoals gas/condensate fields offshore northwest Australia.
Speaking at the Excellence in Upstream Energy Conference in Sydney yesterday, Tchacos said the company planned to start drilling an appraisal well at Echuca in the next month or two.
“It’s been a busy year for Nexus – we’ve taken some pretty big steps in the past three or four years, growing from a company that was just accumulating acreage to one that’s bringing two projects [Crux and Longtom] into development,” he said.
“We’re now following up a third opportunity [Echuca] that could put Nexus into the lucrative LNG industry.”
Tchacos said Nexus was considering further farming-down its working interest in Echuca to reduce its costs. It currently holds 66% of the project, while Shell has 34%.
“Nexus could still end up with 25% of a major LNG project,” he said.
“And that would be quite a significant achievement for a company our size.”
Tchacos said Nexus’ strategy was to “get into assets early” with a 100% interest and “work them hard”.
“We’ve gone in there and backed ourselves, so most of our exploration drilling has come through farm-outs,” he said.
“Doing it this can give you tremendous leverage – but the key is to get in there early.”
Elsewhere in northwestern Australia, the company plans to spend the next two or three months better defining the reserves at its Crux project, in the Browse Basin, with a view to producing 10,000 barrels of liquids per day in 2010.
Earlier this month, Nexus released a report in which it increased the best contingent resource estimate to 65 million barrels of liquids from 55MMbbl. In addition, the field is expected to produce about 35bbl of condensate per million cubic feet of reservoir gas – up 13% from the previous estimate.
Tchacos said the recent results from the Crux-2 and sidetrack wells spelled good news for the project, despite the appraisal well failing to intersect a reservoir seen in the original discovery.
“The good news is that we’ve seen another reservoir above Crux that is interconnected with the other reservoirs,” he said.
“If you look at the economics, it is a better result. It’s a more compact field with a higher liquids content.”
Meanwhile in the Bass Strait, Nexus plans to submit a development plan for its $185 million Longtom gas project, in Victoria’s offshore Gippsland Basin, to the relevant authority in the next couple of weeks.
In order to meet the first gas production target, Nexus plans to drill an additional development well and install pipelines in the first half of 2008.
The company also recently booked reserves and finalised a gas sales agreement with Santos, based on 350 petajoules of gas and 4MMbbl of condensate.
Under the sales agreement, Nexus will deliver raw gas from the Longtom field via subsea wells linked by pipeline to the Santos-owned and operated Patricia/Baleen gas processing plant near Orbost.
Santos, which has an option to acquire a 35% stake in the project, has agreed to process up to 450PJ of raw gas from Longtom and purchase the first 350PJ of the sales gas at defined prices.
