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Company: Nexen (NXY)
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  Nexen Quarterly Report - beats estimates

Nexen announced its Q1/08 operating and financial results beating the Street’s estimates.

Cash Flow


First quarter operating cash flows were up 74% year-over-year. The

company reported operating CFPS (fd) of $1.93 versus consensus of $1.91 nd and

Earnings

Operating EPS (fd) of $1.17 versus consensus of $0.96 

Nexen beat estimates primarily due to higher production, higher realized prices and lower general and administrative expenses during the quarter. Production during the quarter averaged 267,000 boe/d compared with our estimate of 262,000 boe/d. The difference was mainly due to solid performance at Buzzard (NXY 43.2%), with gross production averaging approximately 212,000 boe/d, 12,000 boe/d higher than Buzzard’s nameplate capacity. Heavy oil differentials narrowed during Q1/08, with realized Canadian heavy oil prices averaging $65.94 during Q1/08. At Long Lake, bitumen production volumes averaged approximately 6,200 b/d, with peak rates to date in excess of 7,500 b/d. During the quarter construction of the upgrader was completed, and, with commissioning approximately 50% complete, Nexen plans to introduce hydrocarbons into key processing units in May. In Q1/08, the first cogeneration unit was started and has been producing power in excess of 80 megawatts. The second cogeneration unit was recently started and is expected to be fully operational shortly. In the Gulf of Mexico, Nexen sanctioned the development of the Longhorn discovery (NXY 25%). Development will consist of three subsea wells being tied back to the nonoperated Crystal facility. First production is expected in 2009 with a peak gross production rate of 200 mmcf/d. The company also made significant progress at Ettrick in the North Sea and had positive drill results from its Horn River play in northeast BC,

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