Nexen Resists Buyback Trend, Earmarks Cash For Big Projects

Oil Daily, The, October, 2004

Canada's Nexen reported a sharp 22% rise in third-quarter profits on Thursday, despite lower oil and gas production volumes due in part to hurricane-related shut-ins in the Gulf of Mexico late in the period.

The impact of the lower volumes was more than offset by higher commodity prices in the quarter. Nexen's strategy of not hedging its production paid off, as the Calgary-based company was able to take full advantage of the sharp run-up in oil and gas prices.

Nexen earned C$220 million (US$175 million), or C$1.70/share, in the third quarter, up from a year-earlier C$181 million (C$1.38/share). The company's output slipped 10% in the period to 244,000 barrels of oil equivalent per day.

With no hedges in place, Nexen was paid handsomely for its...