**Exhibit11.1**

** **

**Nexen Inc.**

**Statement re: Computation ofEarnings per Share - U.S. GAAP**

**For the Year Ended December 31,2006**

** **

(Amounts in Cdn $ millions, except shares andper share amounts)

 
| ** **                                                                          | ** ** | **2006**      | ** ** | **2005**      | ** ** | **2004**      | ** ** |
|-------------------------------------------------------------------------------------|------------|---------------|------------|---------------|------------|---------------|------------|
| ** **                                                                          | ** ** | **Quarter 1** | ** ** | **Quarter 2** | ** ** | **Quarter 3** | ** ** | **Quarter 4** | ** ** | **Annual** | ** ** | **Annual** | ** ** | **Annual** | ** ** |
| ** **                                                                          | ** ** | ** **    | ** ** | ** **    | ** ** | ** **    | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Net income from continuing operations  available to common stockholders (U.S. GAAP) |       | $             | 199        |          | $          | 397           |       | $ | (84 | ) | $ | 67 |   | $ | 579 |   | $ | 658 |   | $ | 705 |   |
|                                                                                |       |          |       |          |       |          |       |   |   |   |   |   |   |   |   |
| Net income available to common stockholders  (U.S. GAAP)                            |       | $             | 199        |          | $          | 397           |       | $ | (84 | ) | $ | 67 |   | $ | 579 |   | $ | 1,110 |   | $ | 788 |   |
|                                                                                |       |          |       |          |       |          |       |   |   |   |   |   |   |   |   |
| Basic                                                                               |       |          |       |          |       |          |       |   |   |   |   |   |   |   |   |
| Weighted average number of common shares  outstanding (thousands)                   |       | 261.6         |       | 262.1         |       | 262.3         |       | 262.5 |   | 262.1 |   | 260.4 |   | 257.3 |   |
|                                                                                |       |          |       |          |       |          |       |   |   |   |   |   |   |   |   |
| **Basic earnings per share from continuing  operations**                            | ** ** | **$**         | **0.76**   | ** **    | **$**      | **1.52**      | ** ** | **$** | **(0.33** | **)** | **$** | **0.26** | ** ** | **$** | **2.21** | ** ** | **$** | **2.52** | ** ** | **$** | **2.74** | ** ** |
| ** **                                                                          | ** ** | ** **    | ** ** | ** **    | ** ** | ** **    | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Basic  earnings per share**                                                       | ** ** | **$**         | **0.76**   | ** **    | **$**      | **1.52**      | ** ** | **$** | **(0.33** | **)** | **$** | **0.26** | ** ** | **$** | **2.21** | ** ** | **$** | **4.26** | ** ** | **$** | **3.06** | ** ** |
| ** **                                                                          | ** ** | ** **    | ** ** | ** **    | ** ** | ** **    | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Diluted                                                                             |       |          |       |          |       |          |       |   |   |   |   |   |   |   |   |
| Weighted average number of common shares  outstanding (thousands)                   |       | 261.6         |       | 262.1         |       | 262.3         |       | 262.5 |   | 262.1 |   | 260.4 |   | 257.3 |   |
|                                                                                |       |          |       |          |       |          |       |   |   |   |   |   |   |   |   |
| Net additional shares issuable pursuant to  stock options (thousands):              |       |          |       |          |       |          |       |   |   |   |   |   |   |   |   |
| Issuable on exercise                                                                |       | 14.6          |       | 14.2          |       | —        |       | 13.0 |   | 13.9 |   | 13.4 |   | 13.1 |   |
| Re-purchasable from proceeds                                                        |       | (7.7          | )          | (7.6          | )          | —        |       | (6.8 | ) | (7.1 | ) | (7.4 | ) | (9.8 | ) |
|                                                                                |       |          |       |          |       |          |       |   |   |   |   |   |   |   |   |
| Net dilutive effect of stock options  (thousands)                                   |       | 6.9           |       | 6.6           |       | —        |       | 6.2 |   | 6.8 |   | 6.0 |   | 3.3 |   |
|                                                                                |       |          |       |          |       |          |       |   |   |   |   |   |   |   |   |
| Adjusted number of common shares  (thousands)                                       |       | 268.5         |       | 268.7         |       | 262.3         |       | 268.7 |   | 268.9 |   | 266.4 |   | 260.6 |   |
|                                                                                |       |          |       |          |       |          |       |   |   |   |   |   |   |   |   |
| **Diluted earnings per share from continuing  operations**                          | ** ** | **$**         | **0.74**   | ** **    | **$**      | **1.48**      | ** ** | **$** | **(0.33** | **)** | **$** | **0.25** | ** ** | **$** | **2.15** | ** ** | **$** | **2.47** | ** ** | **$** | **2.71** | ** ** |
| ** **                                                                          | ** ** | ** **    | ** ** | ** **    | ** ** | ** **    | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Diluted  earnings per share**                                                     | ** ** | **$**         | **0.74**   | ** **    | **$**      | **1.48**      | ** ** | **$** | **(0.33** | **)** | **$** | **0.25** | ** ** | **$** | **2.15** | ** ** | **$** | **4.17** | ** ** | **$** | **3.03** | ** ** |

 

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