The marketing and trading of North American natural gas is our marketing group’s largest revenue source. We focus on key regional markets where we have a strategic presence— solid customer relationships, in-depth understanding of the market or established physical assets. We capture regional opportunities by managing supply, transportation and storage assets for producers and end users. In addition to the fee-for-service income we realize from managing these assets, we generate further revenue by:

• capitalizing on location spreads (differences in prices between market locations) using our transportation assets;
• capitalizing on time spreads (differences in prices between summer and winter) using our storage assets; and
• financial trading of location and time spreads.

We have offices in key regions including Calgary, Detroit, Denver and Houston. Our Calgary office provides a variety of services, including supply, storage, and transportation management as well as netback pool arrangements and other customer services. Our customers include producers and consumers in western Canada as well as consumers (including utilities) in eastern Canada, the north-eastern United States and the US mid-continent. Our Detroit office works closely with Calgary to provide services to our customers and our presence in Houston has established us in the Gulf Coast region. We use our access to transportation and storage facilities to optimize returns for ourselves as well as our customers.

In 2003 and 2004, we grew our asset base by acquiring physical gas purchase and sales contracts, as well as natural gas transportation capacity, on favourable terms. This gave us access to new third party gas supply until the end of 2008, pipeline capacity to 2016 and new relationships that have enabled us to negotiate new gas purchase and sales contracts. We continue to pursue opportunities to grow our storage and transportation positions by reviewing acquisitions and participating in the normal bidding processes. Our position as a physical marketer at multiple delivery points in key markets gives us flexibility to capitalize on time and location spreads. With pipeline capacity, we can move gas from producing regions to take advantage of price differences.

In addition to transportation and storage assets, we hold financial contracts that enable us to capture profits around time and location spreads. The risks we assume on these contracts are based on solid fundamental analysis and knowledge of regional markets. The risk is managed proactively by our product group teams and monitored closely by our risk group, with regular reporting to management and the board of directors.

Our Business

• Market 6+ bcf/d
• One of the top 10 energy marketers in North America for the past five years
• Manage 3.5+ bcf/d of transport on over 30 pipelines
• Manage 50+ bcf of storage throughout North America
• Extensive and diverse customer base of producers, end users, LDC's and other marketers

Doing Business As
Nexen Marketing
Nexen Marketing U.S.A. Inc.