Pad 12 Producing and Pad 13 Steaming Ahead of Schedule
CALGARY, June 26, 2012 /CNW/ - Nexen Inc. (TSX, NYSE: NXY) today
announced that we have reached two major milestones in our plan to fill
the Long Lake upgrader: first oil production from pad 12 and first
steam into pad 13.
We exceeded our expectations for first production from pad 12 with
conversion of wells to SAGD after approximately 70 days of steam
circulation versus our previous experience of approximately 90 to 120
days. The acceleration was due to new completion technologies and
processes that will now be the standard for future wells. Currently
three of the nine wells are in production with the remainder expected
to be converted over the next few weeks as we install the electronic
submersible pumps.
Steam injection on pad 13 is also ahead of schedule primarily as a
result of the efficiency of steam utilization on the pad 12 start-up.
We are now steaming all nine wells on the pad. First bitumen production
is expected later this year. Production from pads 12 and 13 is
expected to ramp-up to full rates over an 18 to 24 month period.
"Exceeding expectations on these two milestones is a significant
accomplishment. We continue to see real progress at Long Lake," said
Kevin Reinhart, Nexen's interim President & CEO.
The Long Lake project is also progressing in other areas. Pad 11
continues to ramp-up and is trending towards the upper end of our
expected range of 4,000 to 8,000 bbls/d. On pads 14, 15 and Kinosis 1A,
we are progressing site civil work and engineering, and expect to start
drilling mid-summer. Steam injection is expected on pads 14 and 15 in
the second half of 2013, with Kinosis 1A following by mid-year 2014.
Nexen has a 65% working interest in both Long Lake and Kinosis and is
the operator. The remaining 35% interest is held by CNOOC Canada Inc.
About Nexen
Nexen Inc. is an independent, Canadian-based global energy company,
listed on the Toronto and New York stock exchanges under the symbol
NXY. Nexen is focused on three growth strategies: oil sands and shale
gas in Western Canada and conventional exploration and development
primarily in the North Sea, offshore West Africa and deepwater Gulf of
Mexico. Nexen adds value for shareholders through successful full-cycle
oil and gas exploration and development, and leadership in ethics,
integrity, governance and environmental stewardship.
Forward-Looking Statements
Certain statements in this Release constitute "forward-looking
statements" (within the meaning of the United States Private Securities Litigation Reform Act of 1995, as amended) or "forward-looking information" (within the meaning of
applicable Canadian securities legislation). Such statements or
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"anticipate", "believe", "intend", "plan", "expect", "estimate",
"budget", "outlook", "forecast" or other similar words and include
statements relating to or associated with individual wells, regions or
projects. Any statements as to possible future crude oil or natural gas
prices; future production levels; future royalties and tax levels;
future capital expenditures, their timing and their allocation to
exploration and development activities; future earnings; future asset
acquisitions or dispositions; future sources of funding for our capital
program; future debt levels; availability of committed credit
facilities; possible commerciality of our projects; development plans
or capacity expansions; the expectation that we have the ability to
substantially grow production at our oil sands facilities through
controlled expansions; the expectation of achieving the production
design rates from our oil sands facilities; the expectation that our
oil sands production facilities continue to develop better and more
sustainable practices; the expectation of cheaper and more
technologically advanced operations; the expected design size of our
facilities; the expected timing and associated production impact of
facility turnarounds and maintenance; the expectation that we can
continue to operate our offshore exploration, development and
production facilities safely and profitably; future ability to execute
dispositions of assets or businesses; future sources of liquidity, cash
flows and their uses; future drilling of new wells; ultimate
recoverability of current and long-term assets; ultimate recoverability
of reserves or resources; expected finding and development costs;
expected operating costs; future cost recovery oil revenues from our
Yemen operations; the expectation of our ability to comply with the new
safety and environmental rules enacted in the US at a minimal
incremental cost, and of receiving necessary drilling permits for our
US offshore operations; estimates on a per share basis; future foreign
currency exchange rates; future expenditures and future allowances
relating to environmental matters and our ability to comply with them;
dates by which certain areas will be developed, come on stream or reach
expected operating capacity; and changes in any of the foregoing are
forward-looking statements.
Statements relating to "reserves" or "resources" are forward-looking
statements, as they involve the implied assessment, based on estimates
and assumptions that the reserves and resources described exist in the
quantities predicted or estimated and can be profitably produced in the
future.
All of the forward-looking statements in this Release are qualified by
the assumptions that are stated or inherent in such forward-looking
statements. Although we believe that these assumptions are reasonable
based on the information available to us on the date such assumptions
were made, this list is not exhaustive of the factors that may affect
any of the forward-looking statements and the reader should not place
an undue reliance on these assumptions and such forward-looking
statements. The key assumptions that have been made in connection with
the forward-looking statements include the following: that we will
conduct our operations and achieve results of operations as
anticipated; that our development plans will achieve the expected
results; the general continuance of current or, where applicable,
assumed industry conditions; the continuation of assumed tax, royalty
and regulatory regimes; the accuracy of the estimates of our reserve
volumes; commodity price and cost assumptions; the continued
availability of adequate cash flow and debt and/or equity financing to
fund our capital and operating requirements as needed; and the extent
of our liabilities. We believe the material factors, expectations and
assumptions reflected in the forward-looking statements are reasonable,
but no assurance can be given that these factors, expectations and
assumptions will prove to be correct.
Forward-looking statements are subject to known and unknown risks and
uncertainties and other factors, many of which are beyond our control
and each of which contributes to the possibility that our
forward-looking statements will not occur or that actual results,
levels of activity and achievements may differ materially from those
expressed or implied by such statements. Such factors include, among
others: market prices for oil and gas; our ability to explore, develop,
produce, upgrade and transport crude oil and natural gas to markets;
ultimate effectiveness of design or design modifications to facilities;
the results of exploration and development drilling and related
activities; the cumulative impact of oil sands development on the
environment; the impact of technology on operations and processes and
how new complex technology may not perform as expected; the
availability of pipeline and global refining capacity; risks inherent
to the operations of any large, complex refinery units, especially the
integration between production operations and an upgrader facility;
availability of third-party bitumen for use in our oil sands production
facilities; labour and material shortages; risks related to accidents,
blowouts and spills in connection with our offshore exploration,
development and production activities, particularly our deep-water
activities; direct and indirect risks related to the imposition of
moratoriums, suspensions or cancellations of our offshore exploration,
development and production operations, particularly our deep-water
activities; the impact of severe weather on our offshore exploration,
development and production activities, particularly our deep-water
activities; the effectiveness and reliability of our technology in
harsh and unpredictable environments; risks related to the actions and
financial circumstances of our agents and contractors, counterparties
and joint venture partners; volatility in energy trading markets;
foreign currency exchange rates; economic conditions in the countries
and regions in which we carry on business; governmental actions
including changes to taxes or royalties, changes in environmental and
other laws and regulations including without limitation, those related
to our offshore exploration, development and production activities;
renegotiations of contracts; results of litigation, arbitration or
regulatory proceedings; political uncertainty, including actions by
terrorists, insurgent or other groups, or other armed conflict,
including conflict between states; and other factors, many of which are
beyond our control.
These risks, uncertainties and other factors and their possible impact
are discussed more fully in the sections titled "Risk Factors" in our
2011 Annual Information Form and "Quantitative and Qualitative
Disclosures About Market Risk" in our 2011 annual MD&A. The impact of
any one risk, uncertainty or factor on a particular forward-looking
statement is not determinable with certainty as these factors are
interdependent, and management's future course of action would depend
on our assessment of all information at that time. Although we believe
that the expectations conveyed by the forward-looking statements are
reasonable based on information available to us on the date such
forward-looking statements were made, no assurances can be given as to
future results, levels of activity and achievements. Undue reliance
should not be placed on the forward-looking statements contained
herein, which are made as of the date hereof as the plans, intentions,
assumptions or expectations upon which they are based might not occur
or come to fruition. Except as required by applicable securities laws,
Nexen undertakes no obligation to update publicly or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. Included herein is information that may be
considered financial outlook and/or future-oriented financial
information (FOFI). Its purpose is to indicate the potential results of
our intentions and may not be appropriate for other purposes. The
forward-looking statements contained herein are expressly qualified by
this cautionary statement.