Nexen Boasts Continued Success at Horn River Shale Play

Nexen continues to make significant progress on its substantial Horn River shale gas position in northeast British Columbia following the conclusion of a recent three-well drilling and completion program. With five shale gas wells now on-stream, Nexen is producing between 15-20 mmcf/d with the majority of production coming from the three new wells. These wells have a higher frac density than the company's earlier wells. Nexen's land position here could support 500 to 700 wells.

Substantial cost savings and productivity improvements were realized with this drilling and completion program. Nexen took advantage of improved equipment utilization, drilled longer wells, initiated more fracs per well and maintained an industry-leading frac pace of 26 fracs in 15 days while achieving a 100% success rate on our frac program. Two of the wells were completed with eight fracs, while the third well was completed with ten fracs.

"We are making excellent progress in reducing costs and increasing well productivity on our Horn River shale gas acreage with more upside still to come," commented Marvin Romanow, Nexen's President and Chief Executive Officer. "We are currently in the process of developing a winter drilling program that will continue to advance our understanding of this resource and allow us to make more progress on costs and well productivity. We view the Horn River basin as one of the largest and most prolific shale gas plays on the continent -- an observation with which many others agree."

Nexen has approximately 88,000 acres in the Dilly Creek area of the Horn River basin with a 100% working interest. The company estimates that its lands contain between 3 and 6 trillion cubic feet (0.5 to 1.0 billion barrels of oil equivalent) of contingent recoverable resource which could double Nexen's existing total proved reserves. Further appraisal activity is required before these estimates can be finalized and commerciality established.
 

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