May 7, 2012 / 11:32 AM / 7 years ago

Nexen abandons unviable U.S. Gulf well

Kevin Reinhart interim CEO of Nexen addresses shareholders at the company's annual general meeting in Calgary, Alberta, April 25, 2012. REUTERS/Todd Korol

(Reuters) - Nexen Inc NXY.TO said it did not find oil or natural gas in commercial quantities at its Kakuna exploratory well in the Gulf of Mexico and was abandoning it.

The company, which has operations in Canada, the Gulf of Mexico, the North Sea and offshore West Africa, said the well was drilled to a depth of 30,300 feet at a cost of about C$120 million ($120.7 million).

The Kakuna well is on Green Canyon block 504 in the deepwater Gulf of Mexico, where Nexen has so far discovered more than 500 million barrels of resources in the Appomattox area.

The company last month reported a lower-than-expected quarterly profit and is working to iron out operational bugs after a disappointing 2011.

Nexen appears to be staging a turnaround under interim Chief Executive Kevin Reinhart after the exit of former CEO Marvin Romanow early this year.

The company plans to explore at least 15 offshore exploration and appraisal wells in the UK North Sea, West Africa and the Gulf of Mexico this year, it said in a statement.

In November, Nexen formed a joint venture with China’s top offshore oil company, CNOOC Ltd (0883.HK), in the Gulf of Mexico which was to give CNOOC a 20 percent working interest in the Kakuna, Angel Fire and Cypress deepwater exploration wells.

Shares of Nexen, which has a market value of about C$9.40 billion, closed at C$17.78 on Friday on the Toronto Stock Exchange.

($1 = 0.9943 Canadian dollars)

Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Maju Samuel

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