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CNOOC Ltd.’s Net Income Hit New High and Net Production Exceeded Expectations

Source: 3/27/2008, Location: Asia

CNOOC Limited announced its annual results for the 12 months ended December 31, 2007. Last year, our total revenues, net profits and net production all increased steadily. The total revenue of the Company amounted to RMB 90.72 billion. Net income hit a historical high of RMB 31.26 billion, representing a year on year (yoy) increase of 1.1%. Earnings per share reached RMB 0.72.

In 2007, the net oil and gas production of the Company exceeded expectations, increasing by 2.6% to 171 mm BOE, among which the net production from offshore China was 149 million BOE.

Benefiting from the stable growth of oil and gas production, together with rise in average realized oil prices, the Company generated revenue of RMB 73 billion from oil and gas sales, a yoy increase of 7.7%. Our average realized oil and gas price reached US$66.26 per barrel and US$3.30 per thousand cubic feet, up 12.5% and 8.7% from last year respectively.

Under the pressure of inflation and overall surge in costs within the industry, the Company has maintained stringent cost control. The all-in cost was US$16.37 per barrel, which is competitive among global peers.

The Board of Directors has proposed a year-end final dividend of HK$0.17 per share to shareholders. Together with the interim dividend of HK$ 0.13 per share, the Company would distribute a total dividend of HK$0.30 per share for the fiscal year of 2007.

In the year, the Company continued progresses in operating activities. Our Capex reached US$3,515 million, including US$666 million allocated for exploration. Based on encouraging exploration results in the first six months of the year, the Company strengthened exploration activities in the second half. As of December 31, 2007, the Company made 12 oil and gas discoveries, including Jinzhou 25-1, and 10 appraisal successes. During the year, we realized a reserve replacement ratio of 142% and increased net proved reserves by 244 million BOE.

In 2007, 5 new projects commenced production successfully, including Liuhua 11-1, which recovered its production from the strike of typhoon “Chan Chu”. In addition, enhanced performance of existing fields has made great contribution to the production growth.

In the year, our HSE performance maintained good records and new implementation measures were adopted. It worth mentioning that, the first offshore wind generator was started on the platform Suizhong 36-1, marked as the first partly wind-powered oilfield in the world.

“During last year, CNOOC Ltd. has once again fulfilled performance targets. With effective operation management, we are glad to see the Company conclude 2007 with solid production growth, successful exploration and development, and improving HSE records. Looking into the future, we will continue to carry out our established strategies and dedicate to the growth of production and reserve, in order to provide more return to our shareholders in 2008. ” Commented Mr. Fu Chengyu, Chairman and Chief Executive Officer of the Company.

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