By OGJ editors
HOUSTON, Dec. 11 -- Nexen Inc. has approved a 2008 capital investment program of $2.4 billion, about $1.2 billion less than its 2007 program.
The decrease reflects reduced investment in several of the company's major development projects, including its coalbed methane operations in Alberta, due to uncertainty surrounding proposed changes to Alberta's royalty regime.
Nexen said its 2008 capital spending will focus on value-adding projects, growing net production by about 8-10%, and generating $2.9 billion in cash flow next year, which compares to its expected cash flow of about $3.4 billion for 2007.
About 29% of the capital budget will be allocated to major development projects. This will allow Nexen to bring Long Lake Phase 1 and Ettrick oil field in the North Sea on stream in 2008 as well as progress Longhorn in the Gulf of Mexico and CBM at Fort Assiniboine in Alberta.
About 17% is earmarked for early-stage development projects expected to contribute production and cash flow growth beyond 2008. These include future phases of oil sands in the Athabasca region, Block OPL-222 off West Africa, and its Knotty Head and Golden Eagle discoveries in the Gulf of Mexico and North Sea, respectively.
About 25% will be spent on exploration in North Sea and Gulf of Mexico growth areas and on shale gas in northeast British Columbia. Another 25% it allocated toward existing producing assets.
