Nexen Sells Non-Core Canadian Assets For $C975MM

Acquired assets in western Canada, gaining 39 MMBOE proved.

Privately held, Calgary-based Northern Blizzard Resources Inc. has acquired heavy oil assets in Western Canada from Nexen Inc., Calgary, (Toronto, NYSE: NXY) for approximately $975 million.

As of year-end 2009, the properties have proved reserves of 39 million barrels of oil equivalent and, for the previous four quarters, have produced an average of 16,100 barrels of oil equivalent per day from 750 net wells. During the second quarter of 2010, average production was approximately 15,000 barrels equivalent per day. At an average crude oil price around $70, production from the wells has generated $130 million of cash flow.

Northern Blizzard Resources is backed by Natural Gas Partners, a family of funds that invests private equity capital in oil and gas production and oilfield services companies. Natural Gas Partners was founded in 1988; holds more than $7 billion of equity capital; and is part of the investment platform of NGP Energy Capital Management, which has $9.5 billion in cumulative capital under management.

Nexen president and chief executive Marvin Romanow says, "With the completion of this sale, we have met our target of generating $1 billion of proceeds from the sale of noncore assets. We now expect to generate over $1.5 billion from all asset sales once we complete our disposition program, which includes the sale of our interest in Canexus over the next 12 to 18 months."

Nexen plans to use aggregate proceeds from its transactions to fund its conventional exploration, oil sands and shale gas programs.