UPDATE 1-Nexen sees 2008 capital spending of C$2.4 billion

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NEW YORK, Dec 4 (Reuters) - Nexen Inc (NXY.TO: Quote, Profile, Research, Stock Buzz), Canada's fourth largest independent oil producer and exploration company, said on Tuesday it expects to spend C$2.4 billion on capital projects in 2008, down about a third from this year.

The company said it expects 29 percent of that spending will be for major development projects, 17 percent for early stage projects, 25 percent on exploration and 25 percent on its existing producing assets.

The company said the drop from 2007 levels was mostly on reduced investment in its major development projects that are mostly completed as well as uncertainty from proposed changes to Alberta, Canada's royalty regime.

Nexen also expects production, after royalties, to rise between 8 percent and 10 percent to 220,000 barrels of oil equivalent per day (boepd) to 240,000 boepd.

At its Long Lake, Alberta, oil sands project, the company said it expects bitumen production to begin ramping up in the spring, with the upgrader there projected to start up in mid 2008. It expects its Ettrick field in the North Sea is on track for first production in mid-2008.

The Calgary company plans to drill 11 exploration wells over the course of the year.

It expects C$2.9 billion of cash flow, assuming crude oil prices of $70 a barrel and $6.75 per million British thermal units. (Reporting by Michael Erman; Editing by Andre Grenon and Carol Bishopric)