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Nexen Inc. Reports Operating Results (10-Q)

July 21, 2010 | About:
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10qk

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Nexen Inc. (NXY) filed Quarterly Report for the period ended 2010-06-30.

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

third-party brokers.



Read the The complete Report

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