The company today said consulting firm Gaffney, Cline and Associates confirmed revised contingent resource estimates of 435 petajoules of gas and 5.2 million barrels of condensate at Longtom.

“The new contingent resource estimate is expected to allow proven plus probable reserves of 350PJ of gas and 4 million barrels of condensate to be booked to the project,” the company said.

Nexus said this reflects the sales volumes currently contracted to Santos from the Longtom field, subject to achievement of certain project milestones and government approvals.

“The revised contingent resource estimates for the various confidence levels are in line with Nexus’ expectations reported following the Longtom-3 well,” it said.

Nexus said it expects to make a final investment decision on the development of the Longtom field in the near future and the gas project development plan is now complete.

A production licence submission is expected to be submitted to the designated authority before end-March, with a view to securing all necessary government project approvals by mid-2007.

Managing director Ian Tchacos said the company expects financing for the development to be finalised shortly.

“Significant progress has been made on the Longtom project, which is now in an advanced state of definition,” Tchacos said.

“The independent resource audit from GCA is an important milestone for securing project financing.

“Nexus can now look forward to reaching a financial investment decision upon finalisation of financing agreements in the near future.”

Major works, including pipeline installation and the drilling of an additional well, are scheduled for the first half of 2008 with first gas scheduled for the second half.

Gas from the field will be produced via subsea wells linked by a pipeline to the Santos-owned and operated Patricia Baleen gas facility.

History of Longtom

BHP Billiton discovered the Longtom gas field in 1995, but at the time considered it to be uneconomic.

A 386m gas column intersected by the original discovery well was later confirmed by Apache in late 2004 with an appraisal well, which encountered its own 400m gas column in five separate reservoir zones.

Testing of the three reservoir zones flowed at a stabilised rate of 18-19 million cubic feet (MMcfd) per day over 12 hours, but a mechanical failure in the well bore prevented a test of the upper reservoir sections from flowing. A core cut over the upper zone in Longtom-2 confirmed the presence of a reservoir section highly capable of flowing gas.

Drilled on a sole-risk basis by Nexus in September, the Longtom-3 appraisal well confirmed the commercial potential of the Longtom field, when it achieved a sustained flow rate of over 75MMcfd during the second production test over the lower reservoir sections. These sections contain over 80% of the hydrocarbon volumes in the Longtom field.

A test of the upper reservoir sand, which did not flow in Longtom-2, was also shown to be capable of flowing gas.

From deepest to shallowest, the identified gas-bearing reservoir units in the Longtom field are named the 100, 200, 300, 400 and 500 sands. The reservoirs appear to be connected to a series of vertically separate but laterally connected, common aquife