On Friday, the Melbourne-based company said the appraisal well had intersected gas sands about 90 metres above the prognosed top of reservoir.

“The results of this well to date are very encouraging. This intersection is the highest known gas encountered at Crux to date,” managing director Ian Tchacos said.

“I look forward to reporting on the quality of the reservoir when we have that information towards the end of next week.”

Crux-3 has intersected bout 10 metres of reservoir sands – similar in quality to the high porosity sands seen in other Crux wells – with good indications of gas, Nexus said.

On Friday, the Sedco 703 rig had stopped drilling the well in preparation to core part of the reservoir, before drilling ahead to the total planned depth of 3985 metres.

“The information obtained from the collection of reservoir rock recovered from coring will be used to ensure optimal recovery of condensate from the planned liquids project,” Nexus said.

Drilling is expected to reach total depth by the end of next week.

Crux-3 is the first of three wells to be drilled back-to-back in the greater Crux area over the next three months.

Nexus, which holds an 85% equity share of the AC-P23 exploration permit, is drilling the wells ahead of a likely final investment decision on the Crux liquids project expected mid-2008. Japan's Osaka Gas holds the remaining 15% of the project.

Two of the three wells will be drilled in AC-P23 to appraise the Crux field while a third well will be drilled in the adjoining AC-P41 exploration permit in which Nexus holds a 50% interest, to test the Libra exploration prospect.

Crux-3 is located in the core area of the Crux field to evaluate the thickness of the main Nome formation reservoir section which, based on seismic data, is estimated to be thicker than currently mapped.

The well will test the potential for the younger Plover formation, intersected in both the Crux-2 and Crux-2 ST1 wells, to extend toward the southwestern part of the field.