Nexen Makes Discovery in Deepest Well Drilled U.S. Gulf of Mexico

Nexen reports that drilling and logging operations on the initial well at the Knotty Head prospect, located in Green Canyon 512, have concluded. The well encountered approximately 600 feet of net oil pay in multiple zones. Fluid samples, conventional cores and sidewall cores were taken throughout the productive intervals. Analysis indicates high quality crude oil in good quality reservoir sands. The discovery well is located in approximately 3,500 feet of water. Nexen is the operator of the block with a 25% working interest. Other owners in the block include Anadarko Petroleum Corporation (25%), BHP Billiton (25%) and Chevron Texaco (25%).

The Knotty Head well commenced drilling on March 14, 2005 and was drilled by Transocean's Discoverer Spirit drillship. The well reached a total depth of 34,189 feet and is the deepest well drilled to date in the Gulf of Mexico. The Discoverer Spirit will drill a sidetrack appraisal well which is scheduled to spud immediately. Additional appraisal is planned in 2006 to determine the extent of the discovery.

"This is an exciting discovery and represents a significant milestone in our US program," said Charlie Fischer, Nexen's President and CEO. "We are looking forward to completing the additional drilling required to confirm our estimate of the total resource we have captured."

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