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Nexen's Buzzard development in the U.K. Central North Sea.
Nexen's Buzzard development in the U.K. Central North Sea.

Nexen makes 'substantial' North Sea find Add to ...

Nexen Inc. said on Thursday it has made a "substantial" discovery of additional energy resources in the U.K. North Sea in the Golden Eagle area.

The Calgary-based oil and gas company said it estimates Golden Eagle contains the equivalent of between 150 million and 275 million barrels of oil, classified as recoverable contingent resource.

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Nexen didn't provide an estimate on how much of the discovery is comprised of natural gas and how much of it is crude.

Nexen said Golden Eagle is "becoming a major development project" for the company, which expects to continue appraisal drilling in the area for the remainder of the year. Nexen didn't say how much it plans to spend.

"Nexen's exploration momentum is building with these strong results, a potential discovery offshore Nigeria (Owowo) and soon we will see steady results from the Gulf of Mexico," UBS Securities analyst Andrew Potter wrote in a note to clients.

"However, for Nexen to begin outperforming its peers better results are needed from Long Lake (Nexen's biggest oil sands project) - evidence of which is still at least several months away."

Nexen's estimate for Golden Eagle resources is based on data collected from three exploration wells, nine appraisal wells and several tests.

Nexen has a 34 per cent interest in both the Golden Eagle and Hobby discoveries and a 46 per cent interest in the Pink discovery, which are all in the same area.

The company's shares rose 82 cents, almost 4 per cent, to $21.77 in early trading on the Toronto stock exchange.

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