Nexen Establishes Floor Price Protection for 2007 Production

Nexen Inc.

Nexen has purchased put options on approximately 38 million barrels of crude oil production in calendar year 2007. These options establish a WTI floor price of US$50 per barrel on these volumes.

"We view this transaction as providing inexpensive insurance," said Marvin Romanow, Nexen's Chief Financial Officer. "Next year, with the Buzzard development fully on-stream, we will have increased leverage to oil prices. These options provide a base level of price protection without limiting our upside in a sustained high price environment."

The put options were purchased for approximately US$24 million (US$0.63 per barrel).

Nexen Inc. is an independent, Canadian-based global energy company, listed on the Toronto and New York stock exchanges under the symbol NXY. We are uniquely positioned for growth in the North Sea, deep-water Gulf of Mexico, the Athabasca oil sands of Alberta, the Middle East and offshore West Africa.