Nexen's Golden Eagle Takes Flight as 'Major Development'

Nexen continues its significant growth in the UK North Sea, announcing the discovery of substantial additional resource and the start up of new production.

Golden Eagle Area Contains Significant Recoverable Contingent Resource

Based on Nexen's assessment of the data acquired to date, including three exploration wells, nine appraisal wells, three drill-stem tests, one injectivity test and extensive core data, the company estimates that the Golden Eagle area contains between 150 and 275 million boe of gross recoverable contingent resource and is becoming a major development project. The Golden Eagle area includes Nexen's 34% operated interest in both the Golden Eagle and Hobby discoveries and its 46% operated interest in the Pink discovery.

Nexen expects to continue appraisal drilling in the area for the remainder of the year, and is evaluating development options as the company moves towards project sanction.

"The Golden Eagle area is shaping up to be a significant development for Nexen and after Buzzard, it is the largest oil find in the UK North Sea in the last decade," commented Marvin Romanow, Nexen's President and Chief Executive Officer. "Not only are the economics attractive at oil prices as low as US$40/bbl but with Buzzard at peak rates for the next five years or so, this development allows us to keep growing our presence in the North Sea."

Significant Scott/Telford Development Area Well

In the Scott/Telford development area, Nexen recently completed drilling a new step-out development well which encountered 254 feet of high quality net oil pay. The company is currently assessing the results to determine ultimate reserve additions and whether additional drilling is required to delineate the area further. The well will be tied into Nexen's Scott platform and is expected to add incremental production of approximately 10,000-15,000 boe/d by year end. Nexen has a 72% operated working interest in the field.

Ettrick Field On Stream

The Ettrick field began producing in mid August at an initial rate of 20,000 boe/d (16,000 boe/d net to Nexen). The company has recently produced at rates approximating 30,000 boe/d (gross), which allowed Nexen to test the design capacity of the floating production, storage and offloading vessel (FPSO). As production rates stabilize, the company will optimize production from the field. In addition, Nexen has a nearby discovery at Blackbird which could be a future tie-back to Ettrick, further enhancing the economics of this development. Nexen operates both Ettrick and Blackbird, with a 79.73% working interest in each.

Planned Buzzard Shutdown Underway

At Buzzard, the four week shutdown is underway for jacket installation and tie in preparation relating to the fourth platform. Work is proceeding as planned and the platform jacket was successfully installed earlier this week. Nexen expects to have production back on stream by mid September. In 2010, Nexen will install the topsides and begin operating the fourth platform which will allow the company to handle higher levels of hydrogen sulphide over the life of the field.