AC/P23 (Crux Liquids Project) Nexus 85%, Osaka Gas 15%

The Crux field was acquired by Nexus in January 2006. It is located in exploration permit AC/P23, in the Browse Basin, offshore Western Australia.

Appraisal of the Crux field began almost immediately with the acquisition and interpretation of the 285 km2 Crucis 3D seismic survey in early 2006. In late December 2006 the Crux-2 well appraisal was spudded. Crux-2 encountered a gross gas column of 70 metres in Plover Formation sands. These sands were not seen in Crux-1. However, as the well did not intersect the required minimum thickness of reservoir sands necessary to support the proposed liquids project gas injection rate, a decision was made to sidetrack the well to a more optimal location.

The Crux-2 ST1 well encountered a gross gas column of 158 metres significantly in excess of pre-drill expectations. The well encountered both the same high quality Triassic aged Nome Formation "A" reservoirs encountered in Crux-1 and the younger Plover Formation gas sands which were encountered in Crux-2 and was suspended as a future Crux liquids project injection well.

The results at the Crux-2 ST1 well confirmed the extension of the high quality reservoir sands seen in the Crux-1 well to the north eastern part of the field and increases confidence in the resource volumes. In addition, analysis of the seismic post the drilling of Crux-2 has indicated that the Plover Formation sands are potentially extensive and may contain a significant proportion of the field's resource.

Crux-2 ST1 confirmed a higher liquids content within the Crux field with samples recovered indicating a condensate/gas ratio of 35 barrels per million standard cubic feet of reservoir gas. The field was re-mapped following the completion of Crux-2 ST1.

Appraisal drilling of the Crux field continued in December 2007 with Crux-3. Wireline logs recorded in Crux-3 indicated that the well intersected approximately 150 metres of high quality net gas pay over a gross vertical gas column of 300 metres. The majority of the pay is in the Plover and Nome Formation reservoirs where 134 metres of net gas pay was intersected. Age dating has indicated the presence of 13 metres of gas sand in the overlying Montara Formation.

The confirmation of this younger gas charged reservoir indicates that the Crux field comprises four distinct reservoir sections – Montara Formation, Plover Formation and Nome Formation "A" and "B" sands. The pressure data from Crux-3 and the other Crux wells confirm that the gas sands in each of the formations are in pressure communication across the field and form part of a single accumulation.

A production test was subsequently conducted over the 13 metre Montara Formation sand. A maximum flow rate of 50 MMscf/d was recorded with an associated average condensate rate of approximately 2,000 barrels per day through a 1" choke with a flowing well head pressure of 2,770 psi. The information gathered from the production test will be used in the detailed design of the production facilities for the Crux liquids project.

In April 2008 Nexus reported that a substantial increase of recoverable hydrocarbon volumes in the Crux field had been confirmed by independent auditor Gaffney, Cline and Associates ("GCA").

The table below details the current updated volumes and compares them against those previously provided by GCA on 24 October 2007.

CRUX FIELD ESTIMATED RECOVERABLE LIQUIDS VOLUMES

	*Gross (100%) Field*			*Nexus Share 85%*
Confidence Level	P90	P50	P10	P90	P50	P10
Condensate MMstb @ 24 October 2007	54.9	66.3	78.3	46.7	56.4	66.6
Condensate MMstb @ 22 April 2008	63.8	75.2	86.3	54.2	63.9	73.4

These revised volumes are the result of further review by Nexus as well as an independent assessment by external independent expert, GCA. The volumes were certified by GCA as Contingent Resources as the project has not yet been officially sanctioned and GCA has not assessed the commerciality of the Condensate Resource volumes.

However, Nexus has subsequently booked these volumes as Reserves on the basis of the Crux project being deemed by the board of Nexus to be economic.

Nexus anticipates being able to commit to the development of the Crux liquids project by end of 2008 once sufficient proven reserves have been delineated and development costs determined.

In early 2007 Nexus sold the rights to the gas, excluding condensate, in the Crux field to Shell Development (Australia) Pty Ltd for US$40 million. The gas sales agreement enables Nexus to be undertake its condensate recycle project until 31 December 2020 at which time Shell will assume ownership of the permit and will have the right to extract the gas and any remaining condensate.

In August 2007, Nexus sold a 15% interest in the Crux liquids project to Osaka Gas for A$75 million valuing the Crux resource at $500 million. Osaka Gas' financial strength is expected to facilitate rapid development of the project.