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A Nexen natural gas rig in B.C. The character of the energy industry changed after the financial crisis, but unlike oil, natural gas prices never recovered.David Olecko

The more you analyze Nexen's financials, the more you realize it's practically impossible to value the company.

On Monday the energy producer released its last set of public year-end results before its $15.1-billion acquisition by CNOOC Ltd. closes, and its outlook is no clearer than when the Chinese buyer first launched its bid last July.

Despite the hefty price tag, CNOOC could be getting a steal. Or it could have massively overpaid. It will take years to find out which is true.

The trouble stems from the nature of Nexen's reserves: its proved undeveloped assets amount to more than the assets it's already started to develop. Here in Canada, the company has 253 million barrels of oil equivalent that it's already producing, compared with 428 million barrels of proven oil equivalent that haven't even been touched. (This doesn't even count the probable reserves.)

On top of that, the vast majority of these assets reside in the oil sands and valuing them is a guessing game. There are simply too many variables involved, most notably the 50-year-plus reserve life Nexen has tied to them. It's hard enough to predict where oil prices will be five years from now, let alone 15 or 25.

Development costs are also extremely finicky. Just look at the company's netbacks in 2012 across its oil assets. U.K. netbacks amount to about $56 per barrel of oil equivalent after royalties, Syncrude netbacks came in at $55 per barrel, and Nexen's operations in Yemen and Nigeria totalled $85 per barrel. Then there was Long Lake, whose netbacks were just $9 per barrel after royalties – and they've been around this level for the past few years.

Long Lake turned out to be a much more difficult asset to develop than most in the oil sands, but that's the whole point. You never know what you're going to get until you start digging. At Long Lake Nexen found far more underground water than it expected, and that delayed the development process. Who knows what CNOOC will uncover elsewhere.

However, the latest financials did make one thing absolutely clear: Nexen's made good headway on its debt. The company's sold off almost $2.7-billion in assets over the past few years, the latest being a 40 per cent working interest in a shale gas joint venture in British Columbia, and that's brought its net debt down to $3.1-billion. That's just 1.2 times cash flows, down from 1.5 in 2011.