Nexen announces Gulf of Mexico joint venture partnership

Offshore staff 

CALGARY, Alberta – Nexen Inc. says that it has concluded a joint venture with CNOOC Ltd. in the Gulf of Mexico. The joint venture will give CNOOC a working interest in up to six deepwater exploration wells in the Gulf.

Among the prospects included in the deal are the Kakuna well, which is currently drilling, and the Angel Fire well, which is expected to spud in 2012. CNOOC will participate in Kakuna, Angel Fire, and Cypress with a 20% working interest.

CNOOC may also participate in three additional exploration wells with a 10% to 25% working interest. Nexen says that the venture does not include any interest in its Appomattox discovery or related Norphlet formation prospects.

“This agreement is the culmination of an extensive process to recognize some of the value our exploration team has created in the Gulf of Mexico,” said Marvin Romanow, Nexen’s President and CEO. “We are seeing a gradual return to normal activity in the Gulf and this deal is a reflection of the fact that the basin remains a very exciting one for deepwater exploration prospects.”

Drilling on the Kakuna well on Green Canyon block 504 is currently in progress, and Nexen says it expects to spud the Angel Fire well on Green Canyon block 327 in 2012.

Nexen currently produces approximately 20,000 boe/d in the GoM, and is one of the top leaseholders in the deepwater Gulf. The company says it has a significant discovery at Appomattox, containing at least 250 MMbbl of contingent recoverable resource, where it is currently drilling its first appraisal well. Nexen has a 20% interest in Appomattox, the remainder is held by Shell, who is the operator.

11/30/2011

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