Nexen Earmarks 2010 Capital Budget at $2.5B

As Nexen moves into 2010, the company's priorities include the ramp up of Long Lake, sanctioning its discoveries in the North Sea, the continued improvement of its Horn River shale gas returns, the development of its offshore Usan project and ongoing exploration in core areas.

2010 Budget

Nexen'sstrategies are focused on oil sands, shale gas and conventional development and exploration in select basins. In 2010, the company plans to advance these strategies by investing $2.5 billion and growing production after royalties by approximately 4 to 6% assuming the midpoint of our guidance.

Highlights of the 2010 budget are as follows:

• Production after royalties has grown over the last three years at an annual compound rate of over 10% with further growth of approximately 4 to 6% expected in 2010 assuming the midpoint of the company's guidance. At the high end of Nexen's guidance range, volumes would grow over 15%
• Capital investment plans of $2.5 billion solidify growth beyond 2010 as Nexen develops Usan, Golden Eagle, Long Lake and Horn River shale gas
• Production volumes expected to range from 200,000 to 250,000 boe/d (230,000 to 280,000 boe/d before royalties)
• Capital program funded with cash flow assuming WTI averages around US$70/bbl; free cash flow of approximately $600 million at current strip prices
• 15 exploration and appraisal wells planned, testing approximately 600 million boes of net unrisked resource potential