The Company produced 140 million barrels of oil equivalent in 2004, representing an increase of 7.5%. Meanwhile, Offshore China production increased 13.5%.
"We made realized a record profit and achieved a remarkable growth in oil and gas production and reserves in 2004.The extraordinary profit is primarily due to the high commodity prices and an increase in the production volumes. Large reserve growth has proved our exploration programs to be successful. This will contribute to ensure the Company's growth in the future. " Said Mr. Fu Chengyu, Chairman and Chief Executive Officer.
In 2004, six development projects commenced production successfully. The Company's exploration activities resulted in 6 five discoveries and 14 appraisal successes offshore China, achieving a reserve replacement ratio of 173%. As of December 31, 2004, the Company's net proved reserves totaled approximately 2.2 billion BOE.
Albeit the operating expenses increase contributable to the higher prices of raw materials, the effectiveness in cost management allows the Company to maintain its competitive cost structure among peers.Despite operating expense increases due to higher raw material prices in 2004, the Company's effective cost management has allowed it to maintain its competitive cost structure amongst global peers.
"Our 2004 results reached a historical high and the main operating indicators were no worth than the previous year.]. We believe that the good performance of our management will result in persistent continuing support from our shareholders." Commented Mr. Zhou Shouwei, President of the Company.
The Board of Directors has approved a year-end dividend of HK$ 0.03 per share (US$ 0.38 per ADS) normal dividend and a HK$ 0.05 per share (US$ 0.64 per ADS) special dividend. Together with the interim dividend of HK$0.03 per share and the special interim dividend of HK$0.05 per share, we distributed a total of HK$ 0.16 per share to our shareholders during 2004.
"The payment of a dividend and a special dividend is evidence of the Board's willingness to reward our shareholders. We will further develop the Company's ability of organic growth, maintaining our low cost structure and executing the effective natural gas strategy, to lead the Company into an brilliant outstanding future," commented Mr. Yang Hua, Chief Financial Officer and Senior Vice President of the Company.
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