Nexen will sell its heavy oil properties in Western Canada to Calgary-based Northern Blizzard Resources for approximately $975m.

The transaction is expected to close on June 30, 2010. At December 31, 2009, the properties had proved reserves of 39 million boe. During the past four quarters, the properties produced an average of 16,100boe/d from 750 net wells and generated $130m of cash flow when WTI averaged $70.70 per barrel, Nexen said.

Marvin Romanow, president and CEO of Nexen, said: “This transaction represents excellent value realization for these non-core assets. With this sale, we have achieved our target of generating $1bn of proceeds from the sale of non-core assets.

“We now expect to generate over $1.5bn of total proceeds and net debt reduction from all asset sales, once we complete the expected sale of our interest in Canexus over the next 12 to 18 months. These proceeds will be reinvested in pursuing the exciting success we’re having in our conventional exploration, oil sands and shale gas investment programs.”

Nexen is focused on three growth strategies: oil sands and unconventional gas in Western Canada and conventional exploration and development primarily in the North Sea, offshore West Africa and deep-water Gulf of Mexico, the company said.