MELBOURNE, Australia -- Nexus Energy has farmed-out an interest in exploration permit AC/P41, in the Browse basin, Western Australia, to Mitsui E&P Australia (Mitsui) following board approvals of both parties.
Under the agreement, Mitsui will acquire a 20% interest in exploration permit AC/P41 for $20 million in cash and will fund costs attributable to Nexus' remaining 30% interest for three exploration wells in AC/P41, to the extent of $34 million. This includes the cost of drilling of the Libra prospect due to spud later this month. As a result, Nexus expects to receive total funding from Mitsui of up to $30 million in December. The farm-out remains subject to a number of conditions, including the right of pre-emption of Nexus' existing joint venture partner and regulatory approvals.
Nexus previously advised that it had entered into a MOU with respect to a potential sale of a 25% interest in the Crux liquids project in exploration permit AC/P23. The potential sale, for $255 million valued Nexus' 85% holding in the permit at $867 million, effective July 1. The counterparty to the MOU has not received board approval for this purchase citing global market conditions for not proceeding. However, Nexus has received substantial interest from other parties.
Nexus is seeking an additional partner for development of the Crux liquids project. A formal global process will be carried out with respect to a sale of a substantial interest in AC/P23. The board of Nexus is appointing Deutsche Bank to conduct this process. The process will be initiated shortly and will be governed by strict protocols to ensure genuine competition.