Nexen Buys Deepwater Gulf Field Interests from BP for $136M

Calgary-based Nexen Inc. said it bought the remaining 40% interest in the Gulf of Mexico's deepwater Aspen field and interests in five exploration blocks in the greater Aspen area from BP Exploration and Production for US$136 million. The purchase is part of Nexen's strategy to expand its deepwater Gulf operations.

Aspen is located in 3,150 feet of water on Green Canyon Block 243. The asset increases Nexen's exploration acreage in the greater Aspen area to over 80,000 net acres.

Aspen came onstream last December. Current production is 29,000 boe/d, of which 15% is natural gas. Production from Aspen is processed at the Bullwinkle facility, where Nexen has incremental available capacity.

This acquisition increases Nexen's share of field production by 11,600 boe/d. Nexen has sold 60% of the incremental production forward for the next 12 months at a weighted average price of US$29.50/bbl. The cash netback on these hedged volumes, after processing and operating costs, is US$23/bbl.

"We've achieved our goal of becoming a deepwater operator," said CEO Charlie Fischer. "With our strong exploration acreage position, we can now control the timing of future exploration and development activities within the greater Aspen area."

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