* Hampered by Japan's earthquake and tsunami
* Q1 EPS C$0.38 vs C$0.26 year ago
* Cash flow up 22 pct
* Says reaching top of guidance range unlikely
* Shares down 1.3 pct (Recasts to add details, comments)
By Scott Haggett
CALGARY, Alberta, April 27 (Reuters) - Nexen Inc
Nexen has been searching for a partner to speed development
of its northeastern British Columbia shale gas lands, following
on similar deals signed by Encana Corp
Nexen has opened a data room where would-be investors can review the company's confidential information on its shale gas resources in the region, and says a half-dozen potential buyers have shown interest.
But Marvin Romanow, Nexen's chief executive, said the process has been hampered by the earthquake and tsunami that struck Japan, as potential partners from the country are still recovering from the disaster.
"We have actually slowed down our process just a little bit," Romanow said on a conference call. "We had a lot of interest from Japanese companies and they are still recovering from the earthquake that they had there, but they are quickly regrouping and refocusing and we are seeing some of them display a strong interest in our resource."
He said he expected to have additional news on a joint-venture partner in the fall.
Reserves at Nexen's Horn River and Cordova properties are estimated at 5 trillion to 14 trillion cubic feet, and the Liard Basin reserves could be even larger, but low gas prices and the need for expensive infrastructure over the vast areas involved have hampered development.
"We found enough resource there that, you know, it could double, triple, quadruple the size of the company," Romanow said. "I think a lot of people don't completely appreciate the industry has probably found as much gas if not more in Horn River than has been found in all of Alberta. It is a lot of gas up there."
PROFIT CLIMBS
Nexen earned C$202 million ($210 million), or 38 Canadian cents a share, in its first quarter, up from C$141 million, or 26 Canadian cents per share, a year ago. But it said it is less likely to meet the upper end of its full-year production target range due to problems at its Buzzard and Long Lake projects.
Nexen, known for operations in Canada, the Gulf of Mexico, the North Sea and Yemen, had forecast 2011 production of 230,000-270,000 barrels of oil equivalent a day (boe/d), before royalties.
The company, however, expects production to increase in the second half of the year.
Nexen has struggled to ramp up production at its C$6.1 billion Long Lake oil sands project in northern Alberta due to technical problems. Production there during the first quarter averaged 25,500 barrels per day, down 9 percent from the fourth quarter.
Cash flow, a glimpse into the company's ability to fund projects, was C$669 million, or C$1.27 a share, up from C$549 million, or C$1.04 a share, last year.
Revenue rose to C$1.64 billion from C$1.44 billion.
Overall production after royalties fell 6 percent to 207,000 boe/d due to unscheduled maintenance on the gas compressor cooling system at Buzzard and work to commission the fourth platform there.
Nexen, which operates the Buzzard field, one of the most prolific in the North Sea, said production is expected to increase in May as most of the work is now complete.
First-quarter production at Buzzard was 71,000 boe/d, compared with a 85,000-90,000 boe/d level when there is no maintenance downtime, the company said.
Nexen shares fell 30 Canadian cents, or 1.3 percent, to C$23.25 by late morning on the Toronto Stock Exchange.
($1=$0.96 Canadians) (Additional reporting by Bhaswati Mukhopadhyay; editing by Rob Wilson)