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Executive Summary
This report deals with a complete analysis of the company Nexen Inc, a
Canadian-based oil and gas exploratory and drilling company, listed on the
Toronto (TSX) and New York Stock Exchanges (NYSE), bearing the ticker NXY.
The report begins with an exhaustive economic and industrial analysis, covering
factors affecting Nexen’s many business segments and their effects, past and
future on Nexen’s pro?tability and operations. Since Nexen is a ?rm dependent
on the oil industry, we have heavily researched the same, and provided a detailed
analysis of all factors affecting the price of oil, the industry dynamics, the effect of
the formation of OPEC (Organization of the Petroleum Exporting Countries) and
the current all-time high oil price.
In our economic analysis, we discuss economic indicators which will have a
signi?cant affect on Nexen’s operations. Being a Canadian-based ?rm, Nexen is
highly affected by the dynamics of the American market, and stability of the
political and economic situation is of dire importance. With the current credit
crisis and weakening dollar threatening to push the US economy into recession,
all Canadian ?rms will be affected. Though Nexen is currently protected by the
weak US dollar through hedging, we expect this to affect their pro?tability in the
long run, if the American dollar remains at its current low levels.
HISTORY
In this part we will give a quick and concise overview of the main economic
events and how they in?uenced the economic situation in the 20th and early 21st
century.
In the 1920’s, the US stock market boomed as a result of the general optimism.
Among many t ...