16873--2/21/2008--NEXEN

related topics

{gas, price, oil}

{operation, international, foreign}

{cost, regulation, environmental}

{debt, indebtedness, cash}

{operation, natural, condition}

{regulation, change, law}

{cost, contract, operation}

A substantial or extended decline in oil and natural gas prices could have a material adverse effect on us. Competitive forces may limit our access to natural resources, and create labour and equipment shortages. Exploration, development and production risks and natural disasters could result in liability exposure or loss of production or reserves. Our offshore operations are subject to unique operating risks. Without reserve additions, our reserves and production will decline over time and we require capital to produce remaining reserves. Our proved reserves include undeveloped properties that require additional capital to bring them on-stream. Our heavy oil production is more expensive and yields lower prices than light oil and gas. The Long Lake Project faces additional risks compared to conventional oil and gas production. Some of our production is concentrated in a few producing assets. Our operations could be subject to changes in regulations related to air emissions. Our energy marketing operations expose us to the risk of trading losses and liquidity constraints. Use of marine transportation may expose us to the risk of financial loss and damaged reputation. Fluctuations in exchange rates give rise to foreign currency exposure. Increases in interest rates could give rise to increased debt servicing obligations. The inability of counterparties to fulfill their obligations to us could adversely impact our results of operations. We may not achieve commercial production rates in our coalbed methane or shale gas operations. We have significant up-front commitments related to our current development projects. We operate in countries with political and economic risk. We may be affected by changes in government rules and regulations. Our operations are exposed to environmental liabilities.

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16873--2/21/2008--NEXEN_INC