CNOOC Limited Enters Into Definitive Agreement to Acquire Nexen Inc. for $27.50/Share

All-cash price of US$27.50 per Nexen common share The price represents a premium of 61% to the closing price of Nexen's common shares on the NYSE on July 20, 2012, and a premium of 66% to Nexen's 20 trading-day volume-weighted average share price Delivers significant and immediate value to Nexen shareholders The transaction has received the unanimous approval of Nexen's and CNOOC Limited's Boards of Directors The acquisition of Nexen enhances CNOOC Limited's presence in Canada, Nigeria and the Gulf of Mexico, adds a significant presence in the U.K. North Sea and diversifies CNOOC Limited's growth platform The acquisition provides significant long-term benefits to Canada which are expected to include: Establishing Calgary as CNOOC Limited's North and Central American headquarters, which will manage Nexen's global operations and CNOOC Limited's existing operations in the region (comprising approximately US$8 billion of CNOOC Limited's existing assets); Intending to retain Nexen's current management team and employees; Enhancing capital expenditures on Nexen's assets; Intending to list CNOOC Limited shares on the TSX; and CNOOC Limited

and Nexen Inc.

announced today that they have entered into a definitive agreement under which CNOOC Limited will acquire all of the outstanding common shares of Nexen for US$27.50 per share in cash. The purchase price represents a premium of 61% to the closing price of Nexen's common shares on the NYSE on July 20, 2012, and a premium of 66% to Nexen's 20 trading-day volume-weighted average share price. Total cash consideration of approximately US$15.1 billion will be paid for Nexen's common and preferred shares, and Nexen's current debt of approximately US$4.3 billion will remain outstanding. The transaction, which will be completed by way of a plan of arrangement, is expected to close in the fourth quarter of 2012. The acquisition of Nexen expands CNOOC Limited's overseas businesses and resource base in order to deliver long-term, sustainable growth. Nexen will complement CNOOC Limited's large offshore production footprint in China and extends CNOOC Limited's global presence with a high-quality asset base in many of the world's most significant producing regions - including Western Canada, the U.K. North Sea, the Gulf of Mexico and offshore Nigeria - focused on conventional oil and gas, oil sands and shale gas. In addition, Nexen management's current mandate will be expanded to include all of CNOOC Limited's North American and Caribbean assets. Nexen had average production of 207 mboe/d (after royalties) in Q2 2012. In accordance with SEC rules, Nexen had 900 mmboe of proved reserves and 1,122 mmboe of probable reserves as of December 31, 2011. In addition, as of December 31, 2011, Nexen had best estimate contingent resources of 5.6 billion boe in accordance with Canadian National Instrument 51-101, predominantly in the Canadian oil sands. The transaction will be funded by CNOOC Limited's existing cash resources and external financing.