Nexen acquires UK North Sea assets

By OGJ Editors

HOUSTON, Nov. 3 -- Nexen Inc., Calgary, agreed to acquire EnCana Corp.'s UK subsidiary, EnCana (UK) Ltd., for $2.1 billion, effective retroactively to Sept. 30.

The deal includes EnCana's interests in the Buzzard oil and gas discovery, along with Scott and Telford fields plus other satellite discoveries, and interests in exploratory blocks totaling 740,000 net undeveloped acres. It also gives Nexen a proven UK management and technical team, officials said.

Buzzard field, 100 km northeast of Aberdeen, is the largest oil discovery in the past decade in the UK North Sea. Its development is on schedule, with first oil expected in late 2006. The remaining capital investment to bring Buzzard on stream is projected at $650 million, net to Nexen. Production is expected to reach peak levels of 80,000 b/d, net to the acquired interest, in 2007. Pending approval of the transaction by the UK Department of Trade and Industry, Nexen will operate the field with 43.2% working interest.

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