Nexen On The Hunt for Canada Shale Gas Partner

OTTAWA (Dow Jones Newswires), Feb. 18, 2011

Nexen plans to follow in Encana's footsteps in finding a joint-venture partner to help finance development of new shale gas reserves in western Canada.

The Calgary oil and gas producer, one of Canada's largest, said it had hired advisers at Bank of America to solicit interests in developing Nexen's 300,000 acres of shale gas land in northeastern British Columbia.

"What we want to do is to find an arrangement and a partnership that looks towards developing those assets over the next 40 years," Nexen Chief Executive Marvin Romanow said. "Which is about the timeframe you have to think about when you look at how much gas has been discovered up there."

Nexen's interest in securing a partner follows news earlier this month that Canada's largest natural gas producer Encana agreed to sell to PetroChina for C$5.4 billion a 50% stake in a 635,000-acre area of shale gas lands stretched across northeastern British Columbia and northwestern Alberta, and a the C$1.05B sale by Calgary's Talisman in another plot shale gas land in British Columbia to South Africa's Sasol.

Romanow didn't specify whether Nexen would seek foreign investments in its shale gas properties. The Canadian federal government is reviewing PetroChina's deal with Encana under laws requiring foreign investments to be of "net benefit" to Canada.

Romanow said Nexen expects to find a partner and close a deal during the second half of this year.

Earlier Thursday, Nexen reported fourth-quarter earnings of C$220 million or 42 Canadian cents a share, declined from C$259 million or 50 Canadian cents a share a year earlier, in part due to lower production.

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