Nexus Agrees Commercial Principles with Shell for Crux Liquids Project Extension

abarrelfull wrote on 26 Nov 2010 12:43
Tags: australia nexus shell

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Nexus Energy Limited (“Nexus”) has reached agreement on commercial terms with Shell Development (Australia) Pty Ltd (“Shell”) to purchase an option to a three (3) year extension of the gas rights handover date from 31 December 2020 to 31 December 2023. The agreement is subject to final legal documentation and requisite parties’ board approvals. This represents an important milestone in the commercialisation of Crux (AC/L9).

The three (3) year extension provides the Crux liquids project a ten (10) year full production
term based upon the development timetable. The commercial terms are to pay Shell:

• An option fee of US$675,000 on execution.
• An exercise fee of US$34,325,000 payable upon Final Investment Decision (“FID”) before end of 2011
• An overriding royalty payment of 3.5% for project production life.

Nexus Chairman, Michael Fowler said “The Shell extension is a significant step towards the development of Crux. Whilst we still have a lot of work to do to bring Crux into production, the extension is necessary to allow sufficient time to recover the liquids and meet the conditions for financing. I congratulate Shell for the spirit in which they have conducted these negotiations.

This project is important for our shareholders and the Australian Government as it is expected to generate in the order of $1billion in tax revenues.”

Managing Director, Richard Cottee, said, “Nexus is concentrating on adding fundamental shareholder value and this is an important first step in the realisation of the inherent wealth of the Crux field.”

• Nexus Agrees Commercial Principles with Shell for Crux Liquids Project Extension

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