WA-377-P (Echuca Shoals) Nexus 66%, Shell 34%

The exploration permit WA-377-P located in the Browse Basin, offshore Western Australia was awarded to Nexus (100%) in March 2006. The permit contains the Echuca Shoals gas discovery, located in close proximity to the giant Ichthys gas field. Echuca Shoals-1 was drilled in 1983 and encountered gas at several levels.

 

Echuca Shoals-1, intersected a gas column over a 70 metres gross interval, but did not intersect a gas water contact (GWC). Pressure data from the well indicated the potential for a significant column and the likelihood that the accumulation was stratigraphically trapped. The pressure data also allowed for the possibility of condensate rich gas, no samples had been collected in the original well.

 

In July 2007, Nexus completed a farm-in agreement with Shell Development (Australia) Pty Ltd (“Shell”) to jointly appraise the Echuca Shoals gas discovery.   Under the farm-in agreement, Shell provides funding of up to US$60 million in a combination of cash (US$5 million) and contributions toward the drilling of two appraisal wells (US$55 million) to earn a 34% interest in the permit. The first of the two wells pursuant to the farm-in agreement has been completed.

 

Fossetmaker-1 was spudded on 6 August 2007. The well is located approximately 7 km ENE of Echuca Shoals-1 to evaluate the possible eastern extension of the Echuca Shoals field. 

 

Following an initial evaluation of the results of Fossetmaker-1, Nexus believes that potential gas volumes of up to 4 Tcf of gas in place and associated condensate may be present in the Echuca Shoals structure within WA-377-P. The results from the Fossetmaker-1 well are not conclusive and another well will be required to test this potential. Geological and geophysical studies are underway to evaluate the Fossetmaker-1 result and nearby wells to further assess the potential of Echuca Shoals and determine the optimum location for any future appraisal well.