Nexus Says Companies Eyeing Crux Stake; Writes Down Longtom

Nexus Energy Ltd. (NXS.AU) on Wednesday said several large companies have expressed interest in buying part of its share of the Crux gas and liquids joint venture with Royal Dutch Shell PLC (RDSB) offshore northern Australia.

Nexus said it has also written down the value of its Longtom gas project offshore Victoria state following a reserves downgrade and will take a A$163 million impairment charge in its half-year accounts.

In January, Nexus agreed that Shell would lead an integrated gas and liquids development of Crux in a deal that would give the Australian oil company a 17% stake.

Signing of a binding agreement remains on track for late April, Nexus said Wednesday.

Nexus said it "has been approached by several large energy companies" expressing an interest in part of its stake to secure access to long-term liquefied natural gas rights after the deal with Shell was announced. This indicates the companies are potential buyers of LNG from Australia, such as Asian utilities or traders.

Shell intends to pipe gas from Crux to a floating LNG vessel to be located above its Prelude gas field off the northwest coast of Australia. The Prelude FLNG development aims to be the world's first converting raw gas to a liquid at sea rather than at a multibillion dollar onshore plant.

The downgrade of Longtom's proven and probable reserves to 137 petajoules from an original pre-production estimate of 350 PJ includes a loss from actual production of 32 PJ. Nexus said that while the downgrade is disappointing, it has sufficient resources to meet supply obligations to customers.

-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692; [e-mail]