UPDATE 1-Nexen profit falls, still expects CNOOC deal by year-end

Oct 25 (Reuters) - Canadian oil and gas producer Nexen Inc said it still expects a $15.1 billion takeover bid by China's CNOOC Ltd to close in the current quarter.

Nexen, which reported a 71 percent fall in third-quarter profit on Thursday, struck a takeover deal with CNOOC in July but the transaction remains in limbo as the Canadian government determines whether it is of ``net benefit'' to the country.

CNOOC's chief financial officer, Zhong Hua, told reporters on Wednesday that his company expected to get approval for the takeover by the end of the year.

Ottawa has promised to release a set of clear guidelines for large foreign investments when it announces its decision on the takeover around Nov. 11.

Doubts about the fate of the CNOOC bid increased last week when Canada blocked a $5.2 billion bid by Malaysian state oil company Petronas for Progress Energy Resources Corp .

Nexen said its net income fell to C$59 million ($59.5 million), or 11 Canadian cents per share, in the third-quarter, from C$200 million, or 32 Canadian cents per share, a year earlier. Net sales rose about 7 percent to C$1.5 billion.

Production before royalties fell 3 percent to 181,000 barrels of oil equivalent per day (boe/d).

Cash flow, a glimpse into the company's ability to fund future development, rose to C$560 million, or C$1.06 per share, from C$516 million, or 98 Canadian cents per share, a year earlier.