Nexen Inc. TSX: NXY NYSE: NXY

FORT MCMURRAY, ALBERTA--(Marketwire - Oct. 23, 2008) - Joint-venture partners OPTI Canada Inc. ("OPTI") and Nexen Inc. ("Nexen") today marked the grand opening of the Long Lake Project ("Long Lake").

Long Lake is Canada's fourth major integrated oilsands project and the first to integrate in-situ bitumen recovery with gasification and onsite upgrading. Facility construction was completed earlier this year and the SAGD operation is currently producing bitumen feedstock in anticipation of Upgrader start-up.

This project will create significant value for Albertans by generating approximately 60,000 barrels per day of Premium Sweet Crude (PSCTM). Our product will be the highest quality synthetic oil to come from Canada's oil sands. Commissioning and testing of the Upgrader is well underway and first production of PSCTM is expected shortly.

"This world-class facility is the culmination of years of planning and reflects the hard work of thousands of people, from tradespeople and contractors, to the employees of both joint-venture partners," said Charlie Fischer, President and CEO of Nexen. "While the project took longer to complete than anticipated, we are very satisfied with the outcome. We look forward to achieving our design volumes over the next 12 to 18 months followed by decades of low-cost, reliable production."

"We're pleased to announce the opening of the Long Lake Project, as it brings next-generation technology to Canada's oil sands," said Sid Dykstra, President and CEO of OPTI. "Long Lake is unique because it represents a step change in upgrading and is the first project to incorporate gasification. This is expected to lead to lower operating costs and position Long Lake to be a leader in carbon capture."

In conjunction with the grand opening of Long Lake, and to recognize the support of neighbouring communities in making it a success, Nexen and OPTI also announced a $2.5-million contribution to four public schools within the Regional Municipality of Wood Buffalo.

The contribution includes $1.5 million to provide ancillary resources that will greatly enhance the educational offering at the new Bill Woodward School (BWS), now under construction in Anzac, the closest hamlet to the Project. The funds are earmarked for items such as smart boards, playground equipment, science labs, library resources and computers. The school, named after a respected elder and community leader who passed away in 2007, is expected to open in 2010.

In addition, the contribution includes $1 million to establish the Long Lake Scholarship Program. This program will offer future graduates of BWS and three Fort McMurray high schools - Father Patrick Mercredi Community School, Westwood Community School and Fort McMurray Composite High School, funding support to continue their education at the post-secondary level.

"The community has been very welcoming and supportive and has grown side-by-side with the Long Lake Project," said Sid Dykstra. "With Long Lake projected to operate for 40 years, we plan on being a good long-term neighbour now and in the future - and we believe there is no better investment for the future than education."

"We believe that the communities in which we operate should benefit from our presence," added Charlie Fischer. "It's an honour to support a community initiative that Bill Woodward would have been proud to see."

The Project is located 40 kilometres southeast of Fort McMurray, in the Athabasca oil sands of northeastern Alberta, and provides full-time employment for a staff of approximately 350. Nexen constructed and is responsible for steam assisted gravity drainage operations, while OPTI constructed and is responsible for Upgrader operations.

ABOUT NEXEN INC.

Nexen Inc. is an independent, Canadian-based global energy company, listed on the Toronto and New York stock exchanges under the symbol NXY. We are uniquely positioned for growth in the North Sea, Western Canada (including the Athabasca oil sands of Alberta and unconventional gas resource plays such as coalbed methane and shale gas), deep-water Gulf of Mexico, offshore West Africa and the Middle East. We add value for shareholders through successful full-cycle oil and gas exploration and development and leadership in ethics, integrity, governance and environmental protection.

ABOUT OPTI CANADA INC.

OPTI Canada Inc. is a Calgary, Alberta-based company focused on developing the fourth and next major integrated oil sands project in Canada, the Long Lake Project, in a 50/50 joint venture with Nexen Inc. The first phase of the Project consists of 72,000 barrels per day of SAGD (steam assisted gravity drainage) oil production integrated with an OPTI-operated upgrading facility, using OPTI's proprietary OrCrudeTM process and commercially available hydrocracking and gasification. Through gasification, this configuration substantially reduces the exposure to and the need to purchase natural gas. The Project is expected to produce 60,000 bbl/d of products, primarily 39 degrees API Premium Sweet Crude with low sulphur content, making it a highly desirable refinery feedstock. OPTI's common shares trade on the Toronto Stock Exchange under the symbol OPC.

Additional Long Lake Project information is available on our Web site: www.longlake.ca.

To view the accompanying B-roll with this news story, please see the information below:

Live Satellite Coordinates: 
DATE OF FEED: Thursday, October 23rd, 2008 
TIME OF FEED: 5:00 PM EDT - 5:30 PM EDT 
CO-ORDINATES: Anik F2 C, Transponder 3B 
Audio subcarrier 6.2 and 6.8 
Downlink frequency 3820 vertical 
URL / Download Coordinates: 
DATE: October 23 2008 
TIME: 8:00 PM EDT 
http://cnw.pathfireondemand.com/viewpackage.action?packageid=98 

Forward-Looking Statements

Certain statements in this report constitute "forward-looking statements" (within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended) or "forward-looking information" (within the meaning of applicable Canadian securities legislation). Such statements or information ("forward-looking statements") are generally identifiable by the terminology used such as "anticipate", "believe", "intend", "plan", "expect", "estimate", "budget", "outlook" or other similar words and include statements relating to or associated with individual wells, regions or projects. Any statements as to possible future crude oil, natural gas or chemicals prices, future production levels, future cost recovery oil revenues from our Yemen operations, future capital expenditures and their allocation to exploration and development activities, future earnings, future asset dispositions, future sources of funding for our capital program, future debt levels, possible commerciality, development plans or capacity expansions, future ability to execute dispositions of assets or businesses, future cash flows and their uses, future drilling of new wells, ultimate recoverability of reserves or resources, expected finding and development costs, expected operating costs, future demand for chemicals products, estimates on a per share basis, sales, future expenditures and future allowances relating to environmental matters and dates by which certain areas will be developed or will come on stream, and changes in any of the foregoing are forward-looking statements. Statements relating to "reserves" or "resources" are forward-looking statements, as they involve the implied assessment, based on estimates and assumptions that the reserves and resources described exist in the quantities predicted or estimated, and can be profitably produced in the future.

The forward-looking statements are subject to known and unknown risks and uncertainties and other factors which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such statements. Such factors include, among others: market prices for oil and gas and chemicals products; our ability to explore, develop, produce and transport crude oil and natural gas to markets; the results of exploration and development drilling and related activities; volatility in energy trading markets; foreign-currency exchange rates; economic conditions in the countries and regions in which we carry on business; governmental actions including changes to taxes or royalties, changes in environmental and other laws and regulations; renegotiations of contracts; results of litigation, arbitration or regulatory proceedings; and political uncertainty, including actions by terrorists, insurgent or other groups, or other armed conflict, including conflict between states. The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these factors are interdependent, and management's future course of action would depend on our assessment of all information at that time.

Although we believe that the expectations conveyed by the forward-looking statements are reasonable based on information available to us on the date such forward-looking statements were made, no assurances can be given as to future results, levels of activity and achievements. Undue reliance should not be placed on the statements contained herein, which are made as of the date hereof and, except as required by law, Nexen undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained herein are expressly qualified by this cautionary statement. Readers should also refer to Items 1A and 7A in our 2007 Annual Report on Form 10-K for further discussion of the risk factors.

Cautionary Note to US Investors

The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to discuss only proved reserves that are supported by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. In this disclosure, we may refer to "recoverable reserves", "probable reserves" and "recoverable resources" which are inherently more uncertain than proved reserves. These terms are not used in our filings with the SEC. Our reserves and related performance measures represent our working interest before royalties, unless otherwise indicated. Please refer to our Annual Report on Form 10-K available from us or the SEC for further reserve disclosure.

In addition, under SEC regulations, the Syncrude oil sands operations are considered mining activities rather than oil and gas activities. Production, reserves and related measures in this release include results from the Company's share of Syncrude.

Under SEC regulations, we are required to recognize bitumen reserves rather than the upgraded premium synthetic crude oil we will produce and sell from Long Lake.

Cautionary Note to Canadian Investors

Nexen is required to disclose oil and gas activities under National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities (NI 51-101). However, the Canadian securities regulatory authorities (CSA) have granted us exemptions from certain provisions of NI 51-101 to permit US style disclosure. These exemptions were sought because we are a US Securities and Exchange Commission (SEC) registrant and our securities regulatory disclosures, including Form 10-K and other related forms, must comply with SEC requirements. Our disclosures may differ from those of Canadian companies who have not received similar exemptions under NI 51-101.

Please read the "Special Note to Canadian Investors" in Item 7A in our 2007 Annual Report on Form 10-K, for a summary of the exemption granted by the CSA and the major differences between SEC requirements and NI 51-101. The summary is not intended to be all-inclusive or to convey specific advice. Reserve estimation is highly technical and requires professional collaboration and judgment.

Because reserves data are based on judgments regarding future events, actual results will vary and the variations may be material. Variations as a result of future events are expected to be consistent with the fact that reserves are categorized according to the probability of their recovery.

Please note that the differences between SEC requirements and NI 51-101 may be material.

Our probable reserves disclosure applies the Society of Petroleum Engineers/World Petroleum Council (SPE/WPC) definition for probable reserves. The Canadian Oil and Gas Evaluation Handbook states there should not be a significant difference in estimated probable reserve quantities using the SPE/WPC definition versus NI 51-101.

Resources

Nexen's estimates of contingent resources are based on definitions set out in the Canadian Oil and Gas Evaluation Handbook which generally describe contingent resources as those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Such contingencies may include, but are not limited to, factors such as economic, legal, environmental, political and regulatory matters or a lack of markets. Specific contingencies precluding these contingent resources being classified as reserves include but are not limited to: future drilling program results, drilling and completions optimization, stakeholder and regulatory approval of future drilling and infrastructure plans, access to required infrastructure, economic fiscal terms, and general uncertainties associated with this early stage of evaluation.

The estimated range of contingent resources reflects conservative and optimistic likelihoods of recovery. However, there is no certainty that it will be commercially viable to produce any portion of these contingent resources.

Nexen's estimates of discovered resources (equivalent to discovered petroleum initially-in-place) are based on definitions set out in the Canadian Oil and Gas Evaluation Handbook which generally describe discovered resources as those quantities of petroleum estimated, as of a given date, to be contained in known accumulations prior to production. Discovered resources do not represent recoverable volumes.

Cautionary statement: In the case of discovered resources or a subcategory of discovered resources other than reserves, there is no certainty that it will be commercially viable to produce any portion of the resources. In the case of undiscovered resources or a subcategory of undiscovered resources, there is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources.

In this disclosure, we refer to oil and gas in common units called barrel of oil equivalent (boe). A boe is derived by converting six thousand cubic feet of gas to one barrel of oil (6mcf:1bbl). This conversion may be misleading, particularly if used in isolation, since the 6mcf:1bbl ratio is based on an energy equivalency at the burner tip and does not represent the value equivalency at the well head.