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Nexen Inc. Reports Operating Results (10-Q)

November 03, 2010 | About:
10qk

10qk

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Nexen Inc. (NXY) filed Quarterly Report for the period ended 2010-09-30.

Nexen Inc. has a market cap of $11.09 billion; its shares were traded at around $21.28 with a P/E ratio of 14.2 and P/S ratio of 2. The dividend yield of Nexen Inc. stocks is 0.9%. 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 Julian Robertson of Tiger Management, Jim Simons of Renaissance Technologies LLC, David Dreman of Dreman Value Management, Bruce Kovner of Caxton Associates, Steven Cohen of SAC Capital Advisors, 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 $10,414 (December 31, 2009 - $10,807) 15,835 15,492

GOODWILL 316 339

FUTURE INCOME TAX ASSETS 1,608 1,148

DEFERRED CHARGES AND OTHER ASSETS (Note 5) 236 370

-

TOTAL ASSETS 22,231 22,900

=





(1) Cash and cash equivalents at September 30, 2010 consist of cash of $211

million and short-term investments of $999 million (September 30, 2009 -

cash of $376 million and short-term investments of $1,521 million).





(1) Net of income tax expense for the three months ended September 30, 2010 of

$20 million (2009 - $55 million expense) and net of income tax expense for

the nine months ended September 30, 2010 of $12 million (2009 - $93 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 the three and nine months ended September 30,

2010 increased by $11 million and $35 million, net income decreased by $7

million and $23 million, and earnings per common share decreased by $0.02/share

and $0.06/share, respectively.



As at September 30, 2010, we have exploratory costs that have been capitalized

for more than one year relating to our shale gas exploratory activities in

Canada ($387 million), interests in eight exploratory blocks in the North Sea

($210 million), two exploratory blocks in the Gulf of Mexico ($115 million), and

our interest in an exploratory block offshore Nigeria ($31 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 September 30, 2010, the estimated fair value of our long-term debt

was $6,385 million (December 31, 2009 - $7,594 million) as compared to the

carrying value of $5,678 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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