Nexen Acquires Acreage Offshore Australia

Nexen Inc. announced that it has exercised its pre-emptive right to acquire BHP Petroleum Ltd.'s 50% interest in the Buffalo oil field offshore Australia for US $21 million.

The transaction is subject to regulatory approval and will increase Nexen's interest in the field to 100%. The acquisition has an effective date of September 1, 2000 and is expected to close in the first quarter of 2001.

Buffalo is located in the Timor Sea, approximately 560 kilometers northwest of Darwin, and was estimated to contain gross remaining proved reserves of 6.2 million barrels at the effective date. The field has been on production since December 1999 and is currently producing approximately 15,000 barrels per day of 53 degrees API crude oil through a floating production, storage and offloading vessel ("FPSO").

"This is an attractive deal," commented Charlie Fischer, Nexen's Chief Operating Officer. "This crude generates excellent netbacks and at current oil prices, the acquisition will pay-out during the first quarter of 2001. In addition, we have five exploration blocks on the northwest shelf of Australia and the revenue and cash flow from Buffalo enables us to explore much more cost effectively. Finally, the acquisition gives us control of a FPSO which could greatly accelerate development of any future discoveries once Buffalo depletes in 2002."


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