Nexen's Deepwater Fields in GOM Shut-in Until 2009

Following the initial assessment of damage to its assets in the Gulf of Mexico caused by Hurricane Ike, Nexen Inc. has provided the following update.

Nexen's Green Canyon 6, 50 and 137 deepwater fields are shut-in following the toppling of a third-party processing platform. The Company is currently evaluating alternative production options for these fields. On the shelf, at Vermilion 321/340, there is substantial damage to the lower decks of some of the platforms. Nexen does not expect production there to be restored until 2009. Production from these particular deepwater and shelf fields was approximately 5,600 equivalent barrels of oil per day prior to the hurricane.

On the shelf, initial assessments indicate minor damage to a number of the Company's other production facilities and subject to the completion of underwater assessments, Nexen will make the necessary repairs and expect to restore production later this year. In the deepwater, Gunnison received minor damage while at Aspen and Wrigley, third-party host facilities were damaged. These deepwater fields are expected to recommence production this year but timing is uncertain because of reliance on third-party repairs. A number of our other properties have been brought back online while others are ready to start production when allowed.

For the rest of this quarter, Nexen expects minimal production volumes from its Gulf of Mexico operations as the Company works to restore production activities. For the fourth quarter, Nexen expects its production volumes in the Gulf to range between 10,000 and 20,000 boe/d. Production volumes are dependant on the timing of repair work and the readiness of third-party infrastructure, such as production platforms and pipelines.

"Prior to Hurricanes Gustav and Ike, we were producing approximately 30,000 equivalent barrels per day in the Gulf," said Charlie Fischer, Nexen's President and Chief Executive Officer. "With the significant production downtime caused by these hurricanes, we expect to be slightly below the low end of our production guidance this year."

Drilling operations at Nexen's Cote de Mer prospect were suspended on account of Hurricanes Gustav and Ike. Drilling operations have resumed.