Nexen/INPEX close shale asset sale


Nexen/INPEX close shale asset sale

CALGARY -  Nexen Inc. announced that it has completed the previously announced sale of a 40% interest in its northeast British Columbia shale gas assets to a consortium led by INPEX CORPORATION of Japan. The total consideration for the sale is $700 million, with 50% cash and a 50% capital carry.

With the deal closed, Nexen now holds a 60% operated interest in the joint venture lands, which are located in the Horn River, Cordova and Liard basins of northeast BC. The remaining 40% is now owned by INPEX Gas British Columbia Ltd., which is jointly established by INPEX and JGC Corporation.

Upon closing, Nexen will receive $821 million in cash, comprised of the initial cash payment and IGBC's share of costs since the effective date of the transaction, including reimbursement of their 40% share of capital and payment of capital carry on Nexen’s 60% share. The remaining carry amount is approximately $106 million.

Nexen and IGBC are continuing with completion activities on an 18-well pad in the Horn River and expanding in-field facilities. The 18-well pad is slated to come on-stream in the fourth quarter and the facility expansion will increase current production capacity to about 175 MMcfd) from about 50 MMcfd. Nexen and IGBC plan to develop this resource as economic conditions permit. The companies have also agreed to jointly investigate the feasibility of LNG export opportunities.

"This is the beginning of a valuable long-term strategic partnership," said Kevin Reinhart, Nexen's interim President and CEO. "Our new partners have technical and commercial strengths that complement our own, and we look forward to working with them to capture the value of this vast resource."

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