Burlington Resources Inc. and Nexen Inc. plan to increase their spending in North America next year, with Burlington’s spending earmarked for natural gas development in the Rocky Mountains while Nexen’s will be spent in the deepwater Gulf of Mexico.

Houston-based Burlington said Thursday it will spend about $1.5 billion in 2004, about the same as this year, and will fund all of it internally. The 2004 budget excludes potential acquisitions, which are currently projected at $228 million this year.

“During 2004 we expect to generate production growth at the upper end of our previously announced guidance range of 3-8% in annual average long-term growth,” said CEO Bobby S. Shackouls. “Meanwhile, the flat 2004 capital budget reflects our philosophy of maintaining consistent spending throughout commodity price cycles, rather than ramping activity up and down.”

Approximately 85% of Burlington’s 2004 capital budget is allocated for investments in North America, with the most to be spent in the Rockies fairway of the Lower 48 and Canada. This year, Burlington spent about 75% of its capital budget in North America. Another 15% will be spent on international projects, down from this year’s 25%, which Burlington attributed to the impending completion of several major projects.

Burlington also has increased the hedged volumes of future North American gas production. This month, Burlington has hedged additional volumes of expected future natural gas production, primarily for the 1Q2004. To date these actions have added approximately 310 MMcf/d of fixed-price contracts at a Henry Hub equivalent price of $6.57/Mcf. Total hedged volumes are currently 790 MMcf/d for the first quarter, with 187 MMcf/d hedged in the second quarter. Burlington’s full hedge position is available on the Hedging Schedule page of its web site at www.br-inc.com/docs/hedge.pdf.

Calgary-based Nexen plans to invest C$1.8 billion in capital projects in 2004, an increase of C$245 million over 2003. Almost C$1.1 billion focuses on advancing major development programs and high quality exploration in four key basins, while C$590 million or 34% is directed toward sustaining production and cash flow from core oil and gas assets.

Nearly half of Nexen’s budgeted exploration capital will be invested in the Gulf of Mexico, where it plans to drill at least five exploration wells, including deepwater tests in the Green Canyon, Garden Banks and Eastern Gulf of Mexico areas, plus two Miocene gas prospects on the shelf.

“Our strategy is to grow in the deepwater Gulf of Mexico, offshore West Africa, in the Middle East, and Canada’s Athabasca oil sands where we can generate superior growth and returns,” said CEO Charlie Fischer. “We are moving forward in these areas with concrete development projects and high-quality exploration opportunities. Our investment in the deepwater Gulf is already delivering high-margin volumes at Aspen, with Gunnison to follow shortly.”

Approximately 45% of Nexen’s cash flow from core assets is being reinvested in those assets to deliver production between 255,000-275,000 boe/d next year. Production after royalties will average between 180,000-195,000 boe/d. The remaining 55% of cash flow will be invested in new growth projects, which will come on-stream in 2005 and beyond.

Nexen’s U.S. natural gas production is estimated to comprise 45% of total equivalent production in 2004, while its Canadian natural gas production is estimated to comprise 33%. In Western Canada, Nexen plans to focus on shallow gas, heavy oil and light oil as it transitions to new sources of production growth such as synthetic crude oil and coalbed methane.

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