Nexen Sells Canadian Heavy Oil Properties

Nexen Inc. has agreed to sell its heavy oil properties in Western Canada to Northern Blizzard Resources Inc. for approximately $975 million (before closing adjustments and costs).

On December 31, 2009, the properties had proved reserves of 39 million boe (barrels of oil equivalent). During the past four quarters, the properties produced an average of 16,100 boe/day from 750 net wells and generated $130 million of cash flow when West Texas Intermediate (WTI) averaged US$70.70 per barrel. The transaction is expected to close on June 30, 2010 and is subject to customary closing conditions. The sale will result in a significant reported gain of over $700 million.

Following the sale, Nexen still expects to meet its original 2010 production guidance.

"This transaction represents excellent value realization for these non-core assets," said Marvin Romanow, Nexen's President and CEO. "With this sale, we have achieved our target of generating $1.0 billion of proceeds from the sale of non-core assets. We now expect to generate over $1.5 billion of total proceeds and net debt reduction from all asset sales, once we complete the expected sale of our interest in Canexus over the next 12 to 18 months. These proceeds will be reinvested in pursuing the exciting success we're having in our conventional exploration, oil sands and shale gas investment programs."

Return to June 2010 Western Energy News

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