Nexen Inc.
TSX : NXY
NYSE : NXY

Nexen Inc.

January 11, 2008 21:32 ET

Nexen Responds to Media Reports

CALGARY, ALBERTA--(Marketwire - Jan. 11, 2008) - Nexen Inc. announced today that media reports regarding the break up or sale of parts of the company are incorrect.

"We are not being pressed to sell or break out parts of our business and we have not received any letters to that effect," said Charlie Fischer, Nexen's President and CEO. "I was surprised to read reports in the media that a campaign is underway to break up the company as I would have expected we would be among the first to know."

"Reports that our stock price does not reflect the value of our underlying assets are not news. We have frequently advised our shareholders and the investment community that the full value of our assets is not being recognized by the market and we have disclosed our plans to unlock that value," continued Fischer.

Our Long Lake oilsands project is scheduled to commence mid-year and production of premium synthetic crude at a significant cost advantage to competing technologies will ramp-up over a 12 to 18 month period after initial start-up of the upgrader. Our Buzzard project in the UK North Sea is world class. We are focused on maintaining the improved reliability and higher production rates we have recently achieved at Buzzard. In the Gulf of Mexico, we have built value with an enviable resource base and we plan to create additional value this year through our deep-water exploration program. Offshore West Africa, the development of our exciting Usan discovery is progressing well towards formal sanctioning in the near future. In addition, we have no fixed price hedges or caps in place allowing us to benefit fully from high commodity prices.

"We expect to grow our net production by between 8% and 10% this year," said Fischer. "We delivered significant production growth and value for our shareholders last year, but we fell short of expectations largely as a result of delays in the ramp-up of Buzzard and in the start-up of Long Lake. While it is not unique in today's environment for the completion of some of our major development projects to take longer than expected, the significant value that these projects will deliver to our shareholders has not changed."

Nexen Inc. is an independent, Canadian-based global energy company, listed on the Toronto and New York stock exchanges under the symbol NXY. We are uniquely positioned for growth in the North Sea, deep-water Gulf of Mexico, the Athabasca oil sands of Alberta, the Middle East and offshore West Africa. We add value for shareholders through successful full-cycle oil and gas exploration and development and leadership in ethics, integrity and environmental protection.

Forward-Looking Statements

Certain statements in this report constitute "forward-looking statements" (within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended) or "forward-looking information" (within the meaning of applicable Canadian securities legislation). Such statements or information (" statements") are generally identifiable by the terminology used such as "anticipate", "believe", "intend", "plan", "expect", "estimate", "budget", "outlook" or other similar words, and include statements relating to: expected full year production, as well as future production associated with individual wells, regions or projects such as: Usan, OPL 222/223, U.K. Buzzard/ Ettrick/Scott Telford & Farragon/Golden Eagle/Exploration/Discoveries, Canadian Heavy Oil/Enhanced Oil Recovery/ Long Lake Ph 1 2 &3+/Syncrude/Coalbed Methane/Shale Gas, United States Knotty Head/Vicksburg/ Longhorn/Exploration/Shelf, Yemen Masila/Block 51 Norway, Conventional Gas, and other projects.

The forward-looking statements are subject to known and unknown risks and uncertainties and other factors which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such statements. Such factors include, among others: market prices for oil and gas and chemicals products; our ability to explore, develop, produce and transport crude oil and natural gas to markets; the results of exploration and development drilling and related activities; volatility in energy trading markets; foreign-currency exchange rates; economic conditions in the countries and regions in which we carry on business; governmental actions including changes to taxes or royalties, changes in environmental and other laws and regulations; renegotiations of contracts; results of litigation, arbitration or regulatory proceedings; and political uncertainty, including actions by terrorists, insurgent or other groups, or other armed conflict, including conflict between states. The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these factors are interdependent, and management's future course of action would depend on our assessment of all information at that time. Any statements as to possible future crude oil, natural gas or chemicals prices, future production levels, future cost recovery oil revenues from our Yemen operations, future capital expenditures and their allocation to exploration and development activities, future earnings, future asset dispositions, future sources of funding for our capital program, future debt levels, possible commerciality, development plans or capacity expansions, future ability to execute dispositions of assets or businesses, future cash flows and their uses, future drilling of new wells, ultimate recoverability of reserves or resources, expected finding and development costs, expected operating costs, future demand for chemicals products, estimates on a per share basis, sales, future expenditures and future allowances relating to environmental matters and dates by which certain areas will be developed or will come on stream, and changes in any of the foregoing are forward-looking statements. Statements relating to "reserves" or "resources" are deemed to be forward-looking statements, as they involve the implied assessment, based on estimates and assumptions that the reserves and resources described exist in the quantities predicted or estimated, and can be profitably produced in the future.

Although we believe that the expectations conveyed by the forward-looking statements are reasonable based on information available to us on the date such forward-looking statements were made, no assurances can be given as to future results, levels of activity and achievements. Undue reliance should not be placed on the statements contained herein, which are made as of the date hereof and, except as required by law, Nexen undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained herein are expressly qualified by this cautionary statement. Readers should also refer to Items 1A and 7A in our 2006 Annual Report on Form 10-K for further discussion of the risk factors.

Contact Information

  • Michael J. Harris, CA
    Vice President, Investor Relations
    (403) 699-4688
    or
    Lavonne Zdunich, CA
    Analyst, Investor Relations
    (403) 699-5821
    or
    Nexen Inc.
    801 - 7th Ave SW
    Calgary, Alberta, Canada T2P 3P7
    Website: www.nexeninc.com