Nexen Reports Only Minor Damage From Hurricane Gustav

CALGARY, ALBERTA, Sep 05 (MARKET WIRE) --
Nexen Inc. announced today that initial inspections of production
facilities in the Gulf of Mexico indicate only minor damage as a result
of Hurricane Gustav.

Prior to the hurricane, we were producing approximately 30,000 equivalent
barrels per day in the Gulf and we expect to restore production over the
coming days. Resumption of production from some facilities is dependant
on a more complete assessment of potential damage and the ability of
transportation infrastructure to accept the production.

"Safety and environmental protection are always our first concerns and we
evacuated all personnel from the Gulf last weekend," said Charlie
Fischer, Nexen's President and Chief Executive Officer. "We expect to
have approximately two thirds of our production volumes back on-stream
some time this weekend and anticipate being back to full rates by the end
of next week."

We also suspended drilling operations at our Cote de Mer prospect.
Drilling is expected to resume there shortly.

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.

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 performance, including expected reliability of operations and
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, upgrade and transport crude oil and natural gas to
markets; the results of exploration and development drilling and related
activities; the risks inherent in operating in harsh climates; the risks
inherent in operating significant facilities which process hazardous and
potentially explosive materials under high temperature and pressure;
volatility in energy trading markets; foreign-currency exchange rates;
economic conditions in the countries and regions in which we carry on
business including the increasing costs of materials and labour and the
ability of suppliers to meet delivery schedules and cost estimates;
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", "recoverable resources" and
"recoverable contingent 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.

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.

Contacts:
Michael J. Harris, CA
Vice President, Investor Relations
(403) 699-4688

Tim Chatten, P.Eng
Analyst, Investor Relations
(403) 699-4244

Nexen Inc.
801 - 7th Ave SW
Calgary, Alberta, Canada T2P 3P7
Website: www.nexeninc.com

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