Nexen Inc. reported that we have concluded a joint venture with CNOOC Limited in the Gulf of Mexico. The joint venture will give CNOOC Limited 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 Limited will participate in Kakuna, Angel Fire, and Cypress with a 20% working interest. CNOOC Limited may also participate in three additional exploration wells with a 10% to 25% working interest. The venture does not include any interest in our 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.

Nexen's strategy in the Gulf of Mexico is to mature prospects at a high working interest, and then utilize joint venture agreements like this one to reduce our interest to our target level of 25%-30%, while recognizing the potential of our exploration portfolio, continued Romanow.

Drilling on the Kakuna well on Green Canyon block 504 is currently in progress. We also expect to spud the Angel Fire well on Green Canyon block 327 in 2012.

Tags: Nexen Inc.