Nexus announced the expected commencement of drilling operations on the Longtom 3 appraisal well using the Ocean Patriot offshore drilling rig and the mobilisation of an onshore drilling rig for the Galloway -1 exploration well. Following the commencement of operations Nexus will issue weekly drilling reports on each well for the duration of the drilling activity.

Longtom-3 Appraisal Well (Vic/P54 Permit):

The Longtom-3 appraisal well is part of a sole risk appraisal program operated by Nexus. Nexus has a 100% interest in the Longtom Gas Project which also includes front end engineering design studies.

On the current schedule, the Longtom-3 appraisal well will spud in the 1st week of July. The well is designed to evaluate the extent and productivity of gas bearing reservoirs encountered in the Emperor formation by the Longtom-1 and Longtom-2 wells. The Longtom-2 well intersected 96 metres of net gas sands over a gross interval of 260 metres. Longtom-3 will be drilled approximately 1.2 kms south-west from the Longtom-2 location.

The first phase of drilling will involve a near vertical well (the pilot hole) designed to confirm the presence, extent and quality of gas bearing reservoirs. Upon the confirmation of a minimum gas column the pilot hole will be plugged back and deviated. A horizontal well section will be drilled to intersect gas reservoirs encountered in the pilot hole. It is intended that the horizontal well will be completed and tested to confirm the productive potential of the reservoirs.

The vast bulk of the equipment required for the Longtom-3 well has now arrived in Melbourne. The largest single piece of equipment, the 33 tonne sub-sea well head, is undergoing final preparations in Melbourne.

Galloway-1 Exploration Well (Vic/P39(v) Permit):

The Galloway-1 exploration well will be drilled from an onshore location by deviating the well into the offshore exploration block Vic/P39(v) near Seaspray in SE Victoria. Construction of the well pad has commenced and the operator, Santos, has advised that the rig is scheduled to commence mobilising to the location in early July.

Santos and Tap Oil Limited are farming in to Vic/P39(v) through the drilling of Galloway-1.

The post farm-in interests in the permit will be:

• Nexus Energy (Aust) NL 37.5%

• Santos Ltd 37.5% (Operator)

• Tap (Shelfal) P/L 25%