18/03/2009 - 09:00

Nexus in halt as Crux sale falls over

18/03/2009 - 09:00

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Nexus Energy has placed its Crux oil project on hold and extended a voluntary suspension of its shares as the company seeks funding after an asset sale process fell through.

Nexus in halt as Crux sale falls over

Nexus Energy has placed its Crux oil project on hold and extended a voluntary suspension of its shares as the company seeks funding after an asset sale process fell through.

The company said on Wednesday a sale process for assets and a potential transaction for the company had been impacted by adverse global economic conditions and not resulted in an "acceptable offer".

Nexus has been forced to place its Crux oil project in Western Australia on hold as it struggles for financing, while chief financial officer Peter Thomas has pulled the pin and resigned from the group.

The company expects that negotiations in relation to asset sales, debt raising alternatives and significant contractual obligations will be completed by March 31.

"We are mindful of shareholder value and the need to be fully funded," Nexus chairman Michael Fowler said in a statement.

Nexus has been running a sale process for up to 30 per cent of the Crux oil project in the Browse Basin after Japanese group Mitsui pulled out of a planned purchase in October.

Mitsui had planned to buy a 25 per cent stake in Crux from Nexus for $US255 million ($A385 million) but declined to go ahead, citing global economic crisis.

Nexus owns 85 per cent of Crux, which has assets containing about 75.2 million barrels of condensate, or light oil reserves, while Osaka Gas holds the balance.

The company has an incentive to develop the project as soon as possible after signing a $US40 million ($A60.45 million) deal in 2007 to sell the Crux gas reserves to Shell Australia.

Under the agreement, Nexus can undertake its liquids project until the end of calendar 2020 when Shell will assume ownership of the permit and will have the right to extract the gas and any remaining condensate.

Shares in Nexus last traded at 38 cents.

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