Crux asset AC/L9
(Nexus 85%, Osaka Gas 15%)
The Crux field is located in Production Licence AC/L9 in the Browse Basin, offshore Western Australia and was acquired by Nexus in January 2006.
Nexus is operator of AC/L9 and holds 85% equity in the liquids resource with joint venture partner Osaka Gas holding the remaining 15%. Shell Development Australia holds the rights to 100% of the gas resource within the permit and under the current contract can access the gas in 2021. Average water depth is around 170 meters with the major Crux reservoir at 3,800 meters.
Five intersections of the Crux field have been drilled to date and around 280km2 of 3D seismic has been collected to delineate the structure. Based on this information, the Crux field has a reserve estimate of around 75 MMbbl of high quality light oil, with further upside potential around the undrilled Auriga and Caelum structures. Importantly the Crux reservoir has high permeability and high porosity and the gas is low in CO2 and other impurities.
It is proposed to develop the Crux field as a liquids stripping project. The development concept is based on four subsea production wells and four subsea gas re-injection wells tied back to a custom built leased floating production storage and offloading vessel (FPSO).
Crux appraisal and engineering has matured to a point where the proposed liquids project could be sanctioned within a short period of time. Nexus has received interest in Crux from domestic and international oil companies and continues to explore the option of a part sell-down and a development of the liquids project with the introduction of an additional new partner.
To help fund the appraisal of the Crux field, Nexus sold the rights to the gas in AC/L9, excluding condensate to Shell. The gas sales agreement enables Nexus to undertake its liquids stripping 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. The terms of the arrangements with respect to Shell's rights to gas in AC/L9, include provisions for where the liquids joint-venture unanimously decides not to progress with a liquids stripping project, and notifies Shell prior to 31 December 2020.
These provisions include the ability for Nexus and Osaka Gas, to participate in the production of any liquid hydrocarbons in a gas commercialisation project initiated by Shell. Such contractual rights are triggered upon transfer of the AC/L9 licence to Shell (with the notification allowing earlier access for Shell to the licence, at its option) and last until the end of that project life (the 1 January 2021 cut-off date would not apply).
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