The company said this area of the Basin was emerging as a major gas province, with several large condensate-rich gas accumulations lying near the permit area.

Nexus has interpreted Echuca Shoals to contain a potential recoverable resource of 1.3 trillion cubic feet of gas and 62 million barrels of condensate. It said this resource estimate also contains considerable upside, as the field may extend further to the north than currently mapped.

“We regard this to be one of the hottest exploration areas in the country, where condensate-rich multi-trillion cubic feet fields such as the nearby Ichthys, are likely to yield LNG projects in the near future,” managing director Ian Tchacos said.

“Being awarded this permit, which contains the potential for another large condensate-rich gas accumulation at Echuca Shoals, is a major coup for Nexus, adding to our growing suite of quality oil and gas assets in Australia’s premier provinces.”

Nexus said the new permit has excellent coverage of recently acquired 3D seismic, which would allow for the rapid choice of drilling locations for further appraisal and exploration.

WA377P lies about 120km north-east of the Crux gas condensate field in AC/P23. Nexus recently announced that initial results from a 3D seismic survey has shown Crux could contain a larger gas condensate resource than first thought.

The company said the new project area also showed potential to be developed as a gas condensate project in a similar way to Crux. This could see the condensate commercialised before a market is secured for the gas, it said.

The 330 square kilometre permit area is also immediately adjacent to Shell Development Australia’s WA371P block. Tchacos described Shell’s 12-well drilling program planned for this permit as the “most significant and aggressive drilling program” undertaken in recent years and one that underscored the exploration potential of the area.

“A further compelling reason for Nexus to pursue WA377P is the fact that gas has been discovered in several other reservoir sections in nearby fields, including Ichthys and Gwydion,” he said.

The Echuca Shoals-1 well encountered two independent gas columns in Berriasian and Tithonian aged sandstones. The deeper Tithonian aged gas accumulation contains the bulk of the discovered gas.

While no sample of reservoir fluid was recovered from the well, wireline log data identified a major gas accumulation, Nexus said. Density information obtained from pressure data in the well indicates that the gas is rich in condensate.

Nexus will now acquire 150sq.km of 3D seismic data in the first year of the permit term to mature a drilling target before a well is drilled in the second permit year.

Subject to rig availability, Nexus will attempt to accelerate the drilling in this permit to the first half of 2007.

Tchacos added that by securing this permit, Nexus was continuing its ongoing strategy of acquiring high quality exploration/appraisal opportunities in Australia at significant equity levels. This then allows the company to farm-out to joint venture partners and secure funding for drilling.