Nexen Sees Production Up by 10% in '09 from Ettrick, Longhorn Start-Ups

Nexen's fourth quarter production averaged 230,000 boe/d (198,000 boe/d after royalties). A significant portion of our Gulf of Mexico production remains shut-in following hurricanes in the third quarter of 2008. 

Nexen's US production was approximately 30,000 boe/d prior to the hurricanes and was reduced to 6,000 boe/d after. In the fourth quarter, the company restored production at Gunnison, West Cameron and Eugene Island and recently resumed production at Aspen, increasing its Gulf of Mexico production to approximately 17,000 boe/d.

Nexen expects its Wrigley field to come back on stream by the end of the first quarter although timing ultimately depends on repairs to third-party facilities. At Green Canyon 6, 50 and 137, production remains shut-in following the destruction of a host processing platform. The company is evaluating options for these fields.

In the UK, production was lower during the quarter on account of maintenance downtime at all fields. Buzzard contributed 85,000 boe/d (197,000 boe/d gross) to Nexen's quarterly volumes compared to 89,600 boe/d (207,500 boe/d gross) in the third quarter.

Annual Production

Nexen's annual production averaged 250,000 boe/d (210,000 boe/d after royalties). Buzzard performed well and contributed 88,200 boe/d (204,200 boe/d gross) compared to 64,200 boe/d (148,500 boe/d gross) in 2007 when it was ramping up. This increase was offset by declines at the company's maturing fields in Yemen and hurricane interruptions in the Gulf of Mexico.

In 2009, the company expects its production after royalties to grow approximately 10% compared to 2008 and range from 225,000 to 240,000 boe/d (255,000 to 270,000 boe/d before royalties). This growth is due to the start-up of Ettrick in the North Sea, Longhorn in the Gulf of Mexico and ramping up production at Long Lake. Nexen's production at Long Lake will also be at a higher working interest than in 2008.