Canadian oil and gas company Nexen Inc. has missed the deadline for the completion of maintenance work at the Buzzard oil field in the North Sea. Delay in the commissioning of the fourth platform will hamper the company’s production target.
The Buzzard oil field is the key contributor to Forties crude. Moreover, this crude is the most important constituent of benchmark Brent, which is used to price a major portion of the world's oil.
Due to the delay in work, a November cargo – F1104 – has been dropped from the loading program of the Forties.
Production was scheduled to commence in mid October but now it has been postponed by a week.
Calgary, Alberta-based Nexen has a diversified portfolio of exploration and production operations in Canada, the U.S. Gulf of Mexico, North Sea (U.K.), Yemen, Nigeria and other areas. We believe that the company’s multi-year inventory of development projects and endeavors will aid in accomplishing the targeted growth level.
Nexen has been actively investing in its upstream assets in recent years, significantly improving its long-term, production-growth prospect. The production efficiency at Buzzard surpassed the company’s target of 85% and touched 88% in the second quarter of 2012.
Of late, Nexen has been in the news following its purchase deal with Chinese energy giant CNOOC Ltd. (CEO - Free Report) last July for approximately $15.1 billion in cash. Per the agreement, which is expected to be wrapped up by this year-end, CNOOC will buy all the outstanding common shares of Nexen at $27.50 per share, representing a premium of 61% to its closing price on the New York Stock Exchange on July 20.
Nexen retains a Zacks #2 Rank, which is equivalent to a Buy rating for the period of one to three months.