November 16, 2010 / 4:31 AM / in 7 years

UPDATE 1-Canada's Nexen plans at least $2.4 bln capex in 2011

* Sees 2011 production of 230-270 mboe/d, before royalties

* Says to restart exploration program in Gulf of Mexico

* Agrees to sell Montana, Nth Dakota assets for C$210 mln (Adds detail)

Nov 16 (Reuters) - Nexen Inc NXY.TO NXY.N, Canada’s No. 5 independent oil exploration company, expects capital spending of C$2.4 billion ($2.38 billion) to C$2.7 billion next year and said it is going ahead with the plans to restart exploration program in the Gulf of Mexico.

The company said it expects 2011 production to range between 230,000 and 270,000 boe/d, before royalties.

Nexen also said it expects to generate between C$2.1 billion and C$2.8 billion of cash flow in 2011, which is a glimpse into a company’s ability to fund development.

Nexen said it expects to spend about 25 percent of its capital investment program -- C$600 million to C$650 million -- on drilling 22 prospects.

The company said it recently entered into an agreement to sell its oil lease gathering, pipelines and storage assets in North Dakota and Montana for about C$210 million.

“We expect to report a gain on the sale of between C$115 million and C$130 million,” Nexen Chief Executive Marvin Romanow said in a statement.

Romanow also said he expects to generate well over C$1.5 billion from all asset sales over the next 12 months.

The Calgary, Alberta-based company’s shares closed up 11 Canadian cents at C$22.37 Monday on the Toronto Stock Exchange. ($1=1.009 CANADIAN DOLLAR) (Reporting by Sakthi Prasad in Bangalore; Editing by Lincoln Feast)

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