Nexus said it was not in a position to provide updated resource figures for the Crux field until the results of this well and other appraisal activities had been incorporated into a revised assessment.

The company said it would consider sidetracking the well to a location in the field where seismic data had indicated both the A and B reservoir sands were present.

"The current status of the Crux-2 well is to drill ahead to appraise the ‘B” sands within the Crux field and complete logging and interpretation activities,” Nexus said yesterday.

“Following this, a decision will be made on whether to sidetrack the well.

“A complete analysis of results for the Crux-2 well will be made available when the entire zone of interest has been drilled, logged and the results interpreted. Any impact of this appraisal well on a development decision on the Crux liquids project will be assessed following a full analysis of the results of the well and any potential sidetrack and other appraisal activities.”

Crux-2 was designed to test the northeastern extent of the Crux gas/condensate field to test an upside scenario and expand the volume of known hydrocarbon resources to the interpreted limit of the field.

Its failure to find the reservoir it was seeking suggests the revised estimate of a contingent recoverable condensate resource of 71MMbbl million barrels of gas condensate may be over-optimistic. The previous estimate had been 40MMbbl.

As of 9.30 am yesterday, the Crux-2 well was at a depth of 3854m below the rotary table and drilling ahead towards a planned total depth of 4145m BRT.

Drilling towards the well’s planned total depth is continuing in order to establish the presence of the lower “B” reservoir sand, Nexus said.

Crux is 100% owned by Nexus. But the company has sold the rights to the gas (excluding condensate) in the field to Shell for $US40 million ($A51.3 million). The gas sales agreement provides for Nexus to be able to execute a condensate recycle project until December 31, 2020 at which time Shell will take ownership of the permit and will be able to extract the gas and any remaining condensate.

Nexus has previously said it expected to sanction the project by mid-year, with first condensate being produced during the third quarter of 2009.