Production
2007 fourth quarter production averaged 262,000 boe/d (214,000 boe/d after royalties) with Buzzard contributing 75,000 boe/d. During the quarter, Nexen shut in production from the Buzzard platform following storm damage to one of the power generation turbine stacks. The damage was repaired within a few days. Reliability issues with the acid gas removal system at Buzzard also temporarily reduced production volumes. These issues have largely been resolved and Buzzard is now performing well, with Nexen’s share of production averaging over 95,500 boe/d (221,000 boe/d gross) for the month of January 2008.
2007 annual production averaged 254,000 boe/d (207,000 boe/d after royalties) as compared to 212,000 boe/d (156,000 boe/d after royalties) in 2006. This resulted in industry-leading production after royalties growth of 33%, but was less than the 50% growth forecasted a year ago. Project start-up and ramp-up delays, coupled with disappointing results from development drilling at Aspen, caused 2007 production to be less than originally forecast. At Buzzard, commissioning of all systems took longer than expected but this work is now complete and the platform is performing well. At Long Lake, project start up was deferred approximately six months to allow for completion of the air separation and sulphur recovery units. Despite these timing setbacks, project returns have not been impacted.
In 2008, Nexen expect additional production growth over 2007 and expect production to range from 260,000 to 280,000 boe/d (220,000 to 240,000 boe/d after royalties). For the month of January 2008, Nexen’s production was approximately 275,000 boe/d (233,000 boe/d after royalties).
Nexen's 2006 annual production averaged 212,000 boe/d (156,000 boe/d after royalties) as compared to 242,000 boe/d (173,000 boe/d after royalties) in 2005. Natural declines from the company's properties in Yemen and the Gulf of Mexico reduced production year over year as did asset dispositions in Canada in mid-2005. Since year end, Nexen have added incremental production at Aspen and Buzzard.
Reserves
In 2007, Nexen added 102 mmboe of proved reserves and invested approximately $2.6 billion in oil and gas exploration and development activities, replacing approximately 110% of their production. Total proved and probable reserves now total approximately two billion boe.
Proved reserves at the end of 2006 stood at 1,049 MMboe.
