Nexen Provides Update on GOM Production Activity

Nexen is gradually stepping up production from the first well at its Aspen prospect in Green Canyon 243 of the Gulf of Mexico. The company is currently evaluating well bore conditions. The second well is expected to come on-stream late this year. With both wells fully on-stream, Nexen's working interest production is expected to be in the 15,000 to 18,000 boe per day range. "Aspen is a great project for the company with a short cycle time, high production rates and strong netbacks," remarked CEO and President, Charlie Fischer. Nexen has a 60% working interest in Aspen. BP has the remaining 40% working interest in the field.

In the deepwater Gulf of Mexico, investment activity will focus on completing the Gunnison development located in Garden Banks 668, where first production is anticipated early in 2004. Construction of the SPAR production facility is expected to be complete in the second quarter of 2003, with installation commencing in the third quarter. Construction of a 92-mile oil pipeline, a 41-mile gas line and completion and tie-in of 10 development wells is scheduled to commence mid-year. The production facilities are designed to handle 40,000 barrels of oil and 200 million cubic feet of natural gas per day (12,000 barrels of oil and 60 mmcf of gas per day net to Nexen). "Gunnison is a very attractive project," commented Fischer. "At current prices, the cash netback from its production will be more than double finding and development costs, ensuring full cycle returns well in excess of our cost of capital." Nexen has a 30% working interest in Gunnison.