Nexen's Dilly Creek site in the Horn River Basin of northeastern BC.

Expansion Underway in Northeast British Columbia

We recognized the potential of shale gas early and in 2006 began acquiring large blocks of high-quality acreage in the Horn River Basin located in northeast British Columbia, Canada — one of the most prospective gas fields in North America. In 2010, we purchased more land in the nearby Cordova and Liard basins, bringing our total land position to approximately 300,000 acres held by Nexen and our joint venture partners.

Third-party evaluators have estimated that our land in the Horn River and Cordova basins hold between four trillion and 15 trillion cubic feet of recoverable contingent resources, while the Liard lands contain an estimated five trillion to 23 trillion cubic feet of prospective resources.1

Activity

In the Horn River, Nexen has built a camp 215 kilometres northeast of Fort Nelson, British Columbia that can house over 300 workers to run our day-to-day activities. Our current production capacity is about 29,000 barrels of oil equivalent per day (boe/d). Production from Horn River averaged about 8,800 boe/d in 2012.

At Cordova, we have begun to develop plans for an access road and camp facility and are currently in the planning and consultation process for both of these projects. We are continuing to explore our Liard assets to understand the development potential.

Joint Venture with INPEX/JGC

In 2011, Nexen announced a joint venture agreement with a consortium led by INPEX Corporation of Japan and its partner JGC – companies with world-class expertise in liquefied natural gas (LNG) and access to Asian LNG markets. Under this agreement, which closed in August 2012, INPEX and JGC acquired a 40% combined working interest in Nexen’s shale gas holdings in northeast British Columbia. Nexen believes liquefied natural gas (LNG) export could be an attractive option for maximizing the value of our shale gas business.

1 For further information about our resource estimates, please review our legal notice.