Iconic Stacks North of Calgary to be Dismantled

Nexen moves to demolition phase at Balzac gas plant

Calgary, Alberta - July 15, 2013 - Nexen Energy ULC has initiated the work required to demolish the Balzac gas plant, including the red and white stacks that have been a familiar landmark of the Calgary and Balzac skyline for more than 50 years.

"We're proud of the comprehensive reclamation effort that's underway and the work we're doing to remediate the site, but I must say, it's a bit sad to see the red and white stacks go," says Andrew Hamilton, Project Manager, Balzac. "But their removal is needed to ensure the safety of those who continue to work on site and to allow us to manage the demolition process in a safe manner before the stacks begin to degrade."

Demolition is scheduled to begin mid-July 2013 and continue into 2014. Structural removal of all above-ground buildings, structures vessels, piping, and equipment will be part of the demolition process.

When the plant was in its 50th year of operation, poor market prices, increasing maintenance costs and declining production from its wells forced the Balzac gas plant into retirement. The plant ceased to produce in 2011, and planning and preparation for demolition began.

The plant provided sour gas processing, including liquefied petroleum gas and sulphur recovery. Since its construction in 1961, the plant processed more than three trillion cubic feet of natural gas, enough natural gas to heat one million homes in Canada for 30 years.

Operating under the banner of Responsible Care®, Nexen has conducted Balzac operations in a safe and environmentally responsible manner and works closely with government agencies and local stakeholders to ensure information related to the demolition process are communicated in a timely manner. Nexen will continue to meet these expectations to ensure the safety of employees, contractors and the public remains a top priority.

Nexen Energy ULC is an upstream oil and gas company responsibly developing energy resources in the UK North Sea, offshore West Africa, the United States and Western Canada. A wholly-owned subsidiary of CNOOC Limited, Nexen has three principal businesses: conventional oil and gas, oil sands and shale gas.

For further information or to arrange a media tour, please contact:

Jimmy Sadden
Corporate Communications
Email: jimmy_sadden@nexeninc.com
Phone: (403) 699-4224
801 - 7th Ave SW, Calgary, Alberta, Canada T2P 3P7

Editor's please note: additional photos of the gas plant and stacks are available.

www.nexeninc.com/balzac

Certain statements in this release constitute "forward-looking statements" (within the meaning of the United States Private Securities Litigation Reform Act of 1995, as amended). Such forward-looking statements are generally identifiable by the forward-looking terminology used such as "will", "intends", "expect", "should" or other similar words. Forward-looking statements are subject to known and unknown risks and uncertainties and other factors, many of which are beyond Nexen's control and each of which contributes to the possibility that its forward-looking statements will not occur or that actual results and achievements may differ materially from those expressed or implied by such statements. These risks, uncertainties and other factors and their possible impact are discussed more fully in the sections titled "Risk Factors" in the Nexen Inc. 2012 Annual Information Form and "Quantitative and Qualitative Disclosures About Market Risk" in Nexen's 2012 annual MD&A, both of which are available at www.nexeninc.com or www.sedar.com. They are also discussed more fully in the CNOOC Limited 2012 Annual Report on Form 20-F which is available at www.cnoocltd.com or www.sec.gov. All of the forward-looking statements in this release are qualified by the assumptions that are stated or inherent in such forward-looking statements. Although Nexen believes these assumptions are reasonable based on the information available to it on the date such assumptions were made, this list is not exhaustive of the factors that may affect any of the forward-looking statements, and the reader should not place an undue reliance on these assumptions and such forward-looking statements. Nexen undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

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