**Exhibit23.7**

 

 

 

February 8, 2010

 

Nexen Inc.

801-7th Avenue S.W.

Calgary, AB

T2P 3P7

 

**Attention: Reserves ReviewCommittee of the Board of Directors of Nexen Inc.**

 

**Re:****     ****McDaniel & Associates  - Report of Third Party for the Syncrudeproperty owned by Nexen Inc.**

 

Ladies and Gentlemen:

 

Pursuant to your request,McDaniel and Associates (“McDaniel”) has conducted anaudit of Nexen Inc.’s (“Nexen”) proved and probable synthetic crude oil reserves in Syncrude Canada Ltd. (“Syncrude”), asof December 31, 2009.  Nexen hasrepresented that this property accounts for approximately 32 percent of itstotal proved reserves (15 percent of its total probable reserves) and 100percent of its proved reserves (100 percent of its probable reserves) for itsSyncrude ownership on an equivalent barrel basis as of December 31, 2009,and that its reserve estimates have been prepared in accordance with the UnitedStates’ Securitiesand Exchange Commission (“SEC”) definitions.  We have reviewed information provided to us byNexen that they represent to be its estimate of the reserves,as of December 31, 2009, for the Syncrude property.

 

Reserves included herein areexpressed as reserves as represented by Nexen. Gross reserves are definedas the total estimated petroleum to be produced from these properties after December 31,2009. Working interest reserves are defined as that portion of the grossreserves attributable to the interests owned by Nexen after deducting all workinginterests owned by others. Net reserves are defined as working interestreserves after the deduction of royalties.

 

Estimates of oil,condensate, and NGL (collectively liquids), natural gas and synthetic crude oilshould be regarded only as estimates that may change as further productionhistory and additional information become available. Not only are such reservesestimates based on that information which is currently available, but suchestimates are also subject to the uncertainties inherent in the application ofjudgmental factors in interpreting such information.

 

2200, Bow Valley Square 3,255 - 5 Avenue SW, Calgary AB  T2P3G6     Tel: (403) 262-5506     Fax: (403) 233-2744     www.mcdan.com

 

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| **Nexen Inc.**                                  | **February 8, 2010** |
|-------------------------------------------------|----------------------|
| **Report of Third Party for Syncrude property** | **Page 2**           |

 

Data used in this evaluation were obtained from reviewswith Nexen personnel, Nexen files, from records on filewith the appropriate regulatory agencies, and from public sources. In thepreparation of this report we have relied, without independent verification,upon such information furnished by Nexen with respect to propertyinterests, production from such properties, current costs of operation anddevelopment, prices for production, agreements relating to current and futureoperations and sale of production, and various other information and data thatwere accepted as represented.  Furthermore, if in the courseof our examination something came to our attention which brought into questionthe validity or sufficiency of any of such information or data, we did not relyon such information or data until we had satisfactorily resolved our questionsrelating thereto or had independently verified such information or data. A fieldexamination of the properties was not considered necessary for the purposes ofthis report.

 

**Methodologyand Procedures**

 

The process of estimatingreserves requires complex judgments and decision-making based on availablegeological, geophysical, engineering and economic data. To estimate theeconomically recoverable oil, synthetic crude oil and natural gas reserves andrelated future net cash flows, many factors and make assumptions areconsidered, including:

 

·                  expected reservoircharacteristics based on geological, geophysical and engineering assessments;

 

·                  futureproduction rates based on historical performance and expected future operatingand investment activities;

 

·                  future oil andgas prices and quality differentials;

 

·                  assumed effectsof regulation by governmental agencies; and

 

·                  futuredevelopment and operating costs.

 

Generally accepted methods for estimating reservesinclude volumetric calculations, material balance techniques, production andpressure decline curve analysis, analogy with similar reservoirs, and reservoirsimulation.

 

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| **Nexen Inc.**                                  | **February 8, 2010** |
|-------------------------------------------------|----------------------|
| **Report of Third Party for Syncrude property** | **Page 3**           |

 

We have performed our auditby reviewing the estimates, assumptions, supporting working papers and otherdata underlying the reserves estimate prepared by Nexen.  Wehave audited to the standard geological and engineering methods generally acceptedby the petroleum industry, and the reserves definitions and standards requiredby the United States SEC.  Our assessmentof the method or combination of methods used in a reserves estimate is based onour professional judgment and experience.

 

Discovered oil and naturalgas reserves are generally only produced when they are economicallyrecoverable. As such, oil and gas prices, and capital and operating costs havean impact on whether reserves will ultimately be produced. As required by SECrules, reserves represent the quantities that we expect to economically recoverusing existing prices and costs. Estimates may change substantially asadditional data from ongoing development activities and production performancebecomes available and as economic conditions impacting oil and gas prices andcosts change.

 

Generally, operations are subject to various levels ofgovernment controls and regulations. These laws and regulations may include matters relating to land tenure,drilling, production practices, environmental protection, marketing and pricingpolicies, royalties, various taxes and levies including income tax, and foreigntrade and investment, that are subject to change from time to time.  Current legislation is generally a matter ofpublic record, and additional legislation or amendments that will affectreserves or when any such proposals, if enacted, might become effectivegenerally can not be predicted.  Changesin government regulations could affect reserves or related economics.  In the region that is currently being auditedwe believe Nexen has applied existing regulations appropriately.

 

**Nexen Estimates**

 

Nexen has represented thatestimated proved andprobable reserves attributable to the evaluated properties are based on SEC definitions. It representsthat its estimates ofthe reserves attributable to this property represent approximately 32 percentof its total company proved reserves before royalties andapproximately 4 percent of its total company probablereserves before royalties on a equivalent basis and are as follows,expressed in thousands of barrels (mbbl) and thousands of barrels of oilequivalent (mboe):

 

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| **Nexen Inc.**                                  | **February 8, 2010** |
|-------------------------------------------------|----------------------|
| **Report of Third Party for Syncrude property** | **Page 4**           |

 

**Nexen’s estimate of SyncrudeReserves as of December 31, 2009**

 
| **Nexen  Reserves**                               | ** ** | **Synthetic********Crude Oil********(mboe)** | ** ** | **Liquids********(mbbl)** | ** ** | **Natural********Gas********(mmcf)** | ** ** | **Oil********Equivalent********(mboe)** | ** ** |
|---------------------------------------------------|------------|----------------------------------------------|------------|---------------------------|------------|--------------------------------------|------------|-----------------------------------------|------------|
| **Working  Interest Reserves (before royalties)** |       |                                         |       |                      |       |                                 |       |                                    |       |
| Proved                                            |       | 323,935                                      |       |                      |       |                                 |       | 323,935                                 |       |
| Probable                                          |       | 46,326                                       |       |                      |       |                                 |       | 46,326                                  |       |
| **Working  Interest Reserves (after royalties)**  |       |                                         |       |                      |       |                                 |       |                                    |       |
| Proved                                            |       | 288,352                                      |       |                      |       |                                 |       | 288,352                                 |       |
| Probable                                          |       | 40,711                                       |       |                      |       |                                 |       | 40,711                                  |       |

 

**Reserves Audit Opinion**

 

McDaniel has used allprocedures and methods that it considers necessary to prepare this report.

 

In our opinion, the estimatesof proved and probable reserves of synthetic crude oil contained in this reporthas been prepared according to the definitions and disclosure guidelinesrequired by the United States SEC within Paragraphs 932-235-50-4, 932-235-50-6,932-235-50-7 and 932-235-50-9 of the Accounting Standards Update 932-235-50,Extractive Industries — Oil and Gas (Topic 932): Oil and Gas Reserve Estimationand Disclosures (January 2010) of the Financial Accounting Standards Boardand Rules 4—10(a) (1)—(32) of Regulation S—X and Rules 302(b) and1201, 1202(a) (1), (2), (3), (4), (5), (8) of Regulation S-K of theSecurities and Exchange Commission.

 

In our opinion, the provedand proved plus probable reserves for the reviewed property as estimated byNexen are reasonable within the established audit tolerance guidelines as setforth in the Standards Pertaining to the Estimating and Auditing of Oil and GasReserves Information promulgated by the Society of Petroleum Engineers.

 

The analysis of thisproperty, as reported herein, was conducted within the context of an audit inaggregate as part of the total corporate level reserves. Extraction and use ofthis analysis outside of this context may not be appropriate withoutsupplementary due diligence.

 

McDaniel is an independentpetroleum engineering consulting firm that has been providing petroleumconsulting services throughout the world for over 50 years. McDaniel does nothave any financial interest, including stock ownership, in Nexen. Our fees werenot contingent on the results of our audit. This letter report has beenprepared at the request of Nexen and should not be used for purposes other thanthose for which it is intended.

 

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| **Nexen Inc.**                                  | **February 8, 2010** |
|-------------------------------------------------|----------------------|
| **Report of Third Party for Syncrude property** | **Page 5**           |

 

Thisreport was prepared by McDaniel & Associates Consultants Ltd. for theexclusive use of Nexen Inc.  It is not tobe reproduced, distributed, or made available, in whole or in part to anyperson, company, or organization other than Nexen Inc. without the knowledgeand consent of McDaniel & Associates Consultants Ltd.  We reserve the right to revise any of theestimates provided herein if any relevant data existing prior to preparation ofthis report was not made available or if any data provided was found to beerroneous.

 

If there are anyquestions, please contact the writer directly at (403) 218-1378.

 

Sincerely,

 
| **McDaniel & Associates  Consultants Ltd.** |                                 |
|------------------------------------------------------|--------------------------------------|
|                                                 |                                 |
|                                                 |                                 |
| “signed by B. H.  Emslie”                  |                                 |
|                                                 |                                 |
| B. H. Emslie, P. Eng.                                |                                 |
| Senior Vice President                                |                                 |
|                                                 |                                 |
|                                                 |                                 |
| CC:                                                  | Mr. B Frasson, P.  Eng., MBA    |   |
|                                                 | Director — Syncrude  Investment |   |
|                                                 |                                 |   |
|                                                 | Mr. Brad Kopas                  |   |
|                                                 | Deloitte &  Touche LLP      |   |

 

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