Financial Results-Netbacks in the Business

During the quarter, our cash flow from operations was CAD557 million and Nexen’s production volumes were 9% more than the earlier quarter driven by improved uptime in the UK North Sea and the restoration of hurricane impacted production in the Gulf of Mexico. The company will continue to generate industry-leading cash netbacks averaging just over CAD30/bbl in the first quarter, driven by low royalties and low company-wide conventional operating costs. WTI averaged CAD43/bbl for the quarter compared to CAD59/bbl in the year-ago quarter and CAD98/bbl. ever since the previous quarter, WTI decreased about 27% but our cash flow remained the same. This reflects higher production volumes and a turnaround in the company’s marketing results.

We are pleased with our first quarter results, stated Marvin Romanow, Nexen’s president and chief executive officer. Our production volumes were strong and we generated solid cash flow and earnings in a low price environment. Our company-wide operations currently break even on earnings with commodity prices around CAD30/bbl.

Nexen’s financial position remains strong and has over CAD3.3 billion of available liquidity. This comprises cash of about CAD2.1 billion, with the remainder in undrawn committed credit lines. The company has no debt maturities until 2012 and the average term of its public debt is about 17 years. As a result, Nexen is well positioned in the existing environment.

Late last year, Nexen’s announced a 2009 capital investment program that was largely funded by cash flow with WTI in the CAD60/bbl range. The company is managing its capital investment program recognizing existing economic conditions. To protect base cash flow, Nexen has put options on 45,000 bbls/d of production with an average 2009 strike price of CAD60/bbl Brent.

Nexen’s funding requirements for the first quarter totaled about CAD1.2 billion. The majority of this related to the acquisition of the company’s additional 15% working interest in the Long Lake project and capital investment on development programs which goes beyond quarterly cash flow. The company has funded these investments with excess cash generated in the previous year and by drawing on its credit lines.

Our diversified portfolio of assets is delivering results and providing us with choices for capital investment in this challenging environment, stated Romanow. While we are slowing down our investment in certain areas, we are accelerating projects that are economic in the current environment, such as the Golden Eagle area in the UK North Sea. We are also completing and progressing new growth projects such as Long Lake, Ettrick, Longhorn and Usan.

Marketing-Streamlined Business Generating Positive Results

Nexen’s marketing division contributed cash flow of CAD83 million for the first quarter of 2009 driven by a renewed focus on the optimization of its physical marketing assets. The crude oil marketing group used their storage positions to take advantage of contango in the marketplace. In January 2009, Nexen exited the last of the gas trading positions that did not support its physical marketing business.

We have returned our marketing business back to basics and this has reduced our risk exposure, said Romanow. We expect to see positive cash flow from this division for the year.

Nexen’s first quarter production volumes averaged 252,000 boe/d (225,000 boe/d after royalties) with 85% of our production weighted to crude oil. Buzzard continues to outperform and contributed a quarterly record of 93,000 boe/d (215,000 boe/d gross) to our volumes. Buzzard will be shut down for four weeks in the third quarter for tie-in and jacket installation of the fourth platform, which will allow the company to handle higher levels of hydrogen sulphide and maintain peak production until at least 2014. The shutdown is planned to coincide with an anticipated slowdown of the Forties pipeline for maintenance. Nexen’s anticipates new volumes from the start up of Ettrick and Longhorn and the continuing ramp up of Long Lake to offset this Buzzard downtime.

Nexen’s is also seeing the return of its Gulf of Mexico production that was shut-in due to hurricanes in 2008. Remaining shut-in production is anticipated to be back on stream later this year and in 2010. The company anticipates its US production to raise over the course of the year as Longhorn comes onstream and most fields are restored to pre-hurricane levels.

During the quarter, Syncrude started the planned turnaround of Coker 8-3 earlier than expected. Nexen anticipates second quarter volumes to be lesser as a result of this turnaround, but improve in the second half of the year.

North Sea-Continued Successful Exploration Program

During the quarter, the company had major success at Hobby in the Golden Eagle area. Nexen’s has concluded drilling the Hobby discovery well and two sidetracks. All three wells encountered important high quality oil pay. These results are encouraging and are at the high end of our pre-drill estimates. The company intends to carry on with appraisal activity and anticipate spudding an appraisal well shortly. In addition, Nexen plan to drill a third sidetrack. The Golden Eagle area comprises exciting discoveries at Golden Eagle, Hobby and Pink. Nexen’s has a 34% operated interest in both Hobby and Golden Eagle and a 46% operated working interest in Pink. Nexen’s has additional prospects in the area that its plans to drill later in 2009.

We are excited with the discoveries we are making in the Golden Eagle area just north of our world-class Buzzard asset, commented Romanow. The development of these discoveries is economic at current commodity prices and in our view, development of this area will support a standalone platform.

Nexen’s Ettrick development in the North Sea is progressing towards first oil in the coming months and is anticipated to add about 6,000 to 8,000 boe/d to the company’s annual 2009 production volumes. The development comprises of a leased floating production, storage and offloading vessel (FPSO) designed to handle 30,000 bbls/d of oil and 35 mmcf/d of gas. The company also has a discovery at Blackbird which could be a future tie-back to Ettrick. Nexen operates both Ettrick and Blackbird, with an 80% working interest in each.

Quarterly Dividend

The board has declared the regular quarterly dividend of CAD0.05 per common share. The divided is payable July 1, 2009, to shareholders of record on June 10, 2009.