Nexen Inc. Reports Operating Results (10-Q)
Nexen Inc. has a market cap of $10.76 billion; its shares were traded at around $20.53 with a P/E ratio of 13.7 and P/S ratio of 1.9. The dividend yield of Nexen Inc. stocks is 1%. Nexen Inc. had an annual average earning growth of 11.8% over the past 10 years. GuruFocus rated Nexen Inc. the business predictability rank of 3.5-star.NXY is in the portfolios of Jim Simons of Renaissance Technologies LLC, David Dreman of Dreman Value Management, Bruce Kovner of Caxton Associates, George Soros of Soros Fund Management LLC, Jeremy Grantham of GMO LLC.
Highlight of Business Operations: PROPERTY, PLANT AND EQUIPMENT
Net of Accumulated Depreciation, Depletion, Amortization and
Impairment of $10,129 (December 31, 2009 - $10,807) 15,755 15,492
GOODWILL 343 339
FUTURE INCOME TAX ASSETS 1,340 1,148
DEFERRED CHARGES AND OTHER ASSETS (NOTE 5) 289 370
ASSETS HELD FOR SALE (NOTE 15) 303 -
TOTAL ASSETS 22,515 22,900
(1) Cash and cash equivalents at June 30, 2010 consist of cash of $237 million
and short-term investments of $733 million (June 30, 2009 - cash of $227
million and short-term investments of $1,747 million).
(1) Net of income tax recovery for the three months ended June 30, 2010 of $28
million (2009 - $62 million expense) and net of income tax recovery for the
six months ended June 30, 2010 of $8 million (2009 - $38 million expense).
We follow the successful efforts method of accounting for our oil and gas
activities, which use the estimated proved reserves we believe are recoverable
from our oil and gas properties. Specifically, reserves estimates are used to
calculate our unit-of-production depletion rates and to assess, when necessary,
our oil and gas assets for impairment. Adoption of these amendments changed our
estimate of reserves used to calculate depletion in 2010. As a result of the
amendments, depletion expense for continuing operations for the three and six
months ended June 30, 2010 increased by $11 million and $24 million, net income
from continuing operations decreased by $7 million and $16 million, and earnings
per common share decreased by $0.02/share and $0.04/share, respectively.
As at June 30, 2010, we have exploratory costs that have been capitalized for
more than one year relating to our shale gas exploratory activities in Canada
($348 million), interests in eight exploratory blocks in the North Sea ($193
million), two exploratory blocks in the Gulf of Mexico ($118 million), and our
interest in an exploratory block offshore Nigeria ($21 million). These costs
relate to projects with successful exploration wells for which we have not been
able to recognize proved reserves. We are assessing all of these wells and
projects, and are working with our partners to prepare development plans, drill
additional appraisal wells or otherwise assess commercial viability.
We carry our long-term debt at amortized cost using the effective interest rate
method. At June 30, 2010, the estimated fair value of our long-term debt was
$6,736 million (December 31, 2009 - $7,594 million) as compared to the carrying
value of $6,283 million (December 31, 2009 - $7,251 million). The fair value of
long-term debt is estimated based on prices provided by quoted markets and
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