Nexen Strikes Pay with Knotty Head Sidetrack

Nexen reports that drilling and logging operations on the sidetrack well at the Knotty Head discovery on Green Canyon 512 have concluded.

The discovery well was drilled in 2005 to a total depth of 34,189 feet and encountered approximately 600 feet of net oil pay in multiple zones. The sidetrack well was drilled downdip to a total depth of 32,986 feet, with a bottom-hole location approximately 4,500 feet to the south of the original wellbore. The sidetrack encountered all reservoirs seen in the discovery well, and approximately 400 feet of net oil pay were logged.

Nexen's pre-drill resource estimate for the field, prior to drilling the first exploration well was 350 million to 1 billion barrels. Based on the results of this drilling, the company's resource estimate for the field is now 200 to 500 million barrels of oil equivalent. We believe the majority of the resources are located on our leasehold. The field is located in approximately 3,500 feet of water.

"We are encouraged with the results of the wells drilled to date, which has confirmed Knotty Head to be a potential world-class discovery," said Charlie Fischer, Nexen's president and CEO. "We will continue to accelerate the appraisal of the field in order to determine ultimate reserves and formulate an optimal development plan."

Nexen is the operator of the block with a 25-percent working interest. Other owners in the block, each holding 25 percent, include Anadarko, BHP Billiton, and Chevron.

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