Nexen Sells Canadian Oil and Gas Properties for $946 Million

Nexen is finalizing agreements to sell conventional oil and gas properties in southeast Saskatchewan, northwest Saskatchewan, northeast British Columbia and the Alberta foothills for approximately $946 million before closing adjustments. At December 31, 2004, the properties had proved reserves of approximately 49 million boe and proved plus probable of 64 million boe. In the first quarter of 2005, the properties produced 18,300 boe/d and generated approximately $47 million of cash flow. The sales are expected to close this summer with a gain totaling approximately $300 million (before tax) in the third quarter. No current taxes will be payable on these transactions.

"We are pleased with the value for the oil and gas assets and the progress on monetizing of our chemicals division," said Charlie Fischer, Nexen's President and CEO. "Proceeds will reduce the debt we incurred when purchasing Buzzard and other assets in the North Sea in late-2004. Buzzard will come onstream in late-2006, and at its peak, will add approximately 85,000 boe/d of production and $1.4 billion in annual cash flow, assuming a US$40/bbl WTI."