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Nexen Up Nearly 2% As Goes Ex-Dividend Today; But Long Lake News May Weigh

Nexen Inc (NXY.T0) is up nearly 2% as it goes ex-dividend today. Owners of shares as at the close of trading will be eligible for a dividend of 5 cents per share.

But what is likely to cap gains is a report on the Reuters wire that the company said it could still take years to reach planned production at its troubled Long Lake oil sands project.

Chief executive officer Marvin Romanow also acknowledged Tuesday that Nexen may not be able to conclude negotiations with Yemen before its contract to produce oil in that country expires at the end of the year. Talks on an extension of that 25-year production sharing agreement were interrupted earlier this year amid violence in Yemen. They have since resumed, Mr. Romanow told a Barclays investor conference in New York, and the company hopes to have some "clarity" on its situation by year end, Reuters said.

But, he said, predicting an outcome "is not easy....I shouldn't eliminate the possibility that we will have continuing dialogue in the country even after our contract expires in mid-December."

Perhaps a greater concern for Nexen is its continued trouble at Long Lake, the $6-billion oil sands project that has languished far behind expectations, according to Reuters. On Tuesday, Mr. Romanow said it will take "a few years" to see results from a series of new oil sands wells the company intends to drill over the course of 2012 and beyond. It needs additional drilling because earlier wells haven't performed well.

"We need more wells and we need more wells in the higher quality resource, which we do have," Mr. Romanow said.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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