Calgary — The Canadian Press Published on Wednesday, Oct. 28, 2009 7:44AM EDT Last updated on Friday, Dec. 11, 2009 5:43PM EST
Oil and gas producer Nexen Inc. NXY-T says its third-quarter profit fell 86 per cent from year-ago levels due to lower output, maintenance downtime and reduced sales volume.
The Calgary-based company, which has operations in several countries including the Long Lake oil sands project in northern Alberta, said Wednesday that its profit came in at $122-million or 23 cents a share for the three months ended Sept. 30, compared to $886-million or $1.68 per share last year.
Thomson Reuters analysts had estimated Nexen's earnings would be 22 cents a share.
Nexen's quarterly revenue was cut in half to $1.1-billion from $2.2-billion in the third quarter of 2008.
The company attributed the decline to a combination of lower output because of maintenance downtime, reduced sales volume because of the economy and lower prices.
Cash flow was $379-million, down from $1.69-billion, reflecting the hit the company took from the impact of maintenance and turnaround activities and higher estimated cash taxes.
Nexen said it produced an average of 214,000 barrels of oil equivalent a day for the quarter, down from 249,000 barrels a day a year go.
“We previously announced that our third quarter would be impacted by planned turnarounds on a number of fields,” said Marvin Romanow, Nexen's president and chief executive officer.
Nexen pointed out that it had completed a planned turnaround at its jointly owned Long Lake oil sands project in northern Alberta, and had started up the Ettrick project in the U.K. North Sea as well. The company said it also added volumes from successful drilling at the Longhorn project in the Gulf of Mexico.
“With production ramping up at Ettrick, Longhorn and Long Lake, we expect fourth quarter production volumes to be strong,” Mr. Romanov said.
Nexen has operations in the Western Canada and North Sea, the Gulf of Mexico, Yemen and West Africa.
Its partner in the Long Lake oil sands project is OPTI Canada Inc. OPC-T , which announced Wednesday that the project won't reach full output by late 2010 as announced in its previous guidance.
OPTI said it would consult with Nexen, who is the project operator, before providing updated guidance.
It said bitumen production has returned to the level achieved before a turnaround period when the companies replaced valves on a water treatment plant at the project, which uses steam in the bitument extraction process.
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