Boqueron Block—Guando
In 2000, we made our first discovery at Guando on our 20% nonoperated Boqueron Block. Boqueron is in the Upper Magdalena Basin of central Colombia, approximately 45 km southwest of Bogota. Our working interest in Guando will decrease to 10% once the field has produced 60 million barrels of oil, which is expected to occur in early 2009. Our share of 2007 production averaged 6,200 bbls/d before royalties (5,700 after royalties), about 2% of Nexen’s total production including Syncrude.

Production from Guando is subject to a royalty between 5% and 25% depending on daily production, and in 2007 averaged 8%. Colombian taxable income is subject to federal income tax of 34% in 2007 and 33% in 2008 and future years.

Exploration
We have interests in three exploration blocks in the Upper Magdalena Basin: El Queso acquired in 2003, Villarrica Norte Block in 2005 and El Guadual in 2007. In 2007, we drilled two unsuccessful wells; Guaini-1 and Atalea-1. We hold five technical evaluation agreements that each provide approximately one year to evaluate potential prospects. We are also identifying other growth opportunities in Colombia.