Nexen and Inpex Corp. complete sale.

Nexen have completed the previously announced sale of a 40% interest in the 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, effective July 1, 2011, according to a press release from Nexen.

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. (IGBC), which is jointly established by INPEX and JGC Corporation.

-Upon closing, Nexen 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 our 60% share. The remaining carry amount is approximately $106 million. We expect to record a gain on the sale in our third quarter financial results, Nexen say in the press release.

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 our current production capacity to about 175 million cubic feet per day (mmcf/d) from approximately 50 mmcf/d. Nexen and IGBC plan to develop this resource as economic conditions permit. We have also agreed to jointly investigate the feasibility of LNG export opportunities.