CNOOC Announces Record Financial Results for 3Q05

CNOOC reported record financial results for the third quarter and nine months ended September 30, 2005. Total unaudited revenues amounted to RMB14.87 billion (equivalent to US$ 1.82 billion) for the third quarter of 2005, a 30.8% increase from the third quarter of 2004. Total revenues for the first nine months of 2005 increased by 44.2% year on year (YoY) to RMB39.75 billion (equivalent to US$ 4.83 billion).

Total net production in the third quarter of 2005 was 427,414 barrels of oil equivalent (BOE) per day, compared with 404,571 BOE per day for the same period in 2004. During the period, net daily production offshore China grew 6.8% YoY to 388,060 BOE. Offshore China production for the first nine months of this year increased 15.2% YoY to 385,091 BOE.

For this period, the Company's oil and gas sales reached RMB14.76 billion (equivalent to US$ 1.81 billion), an increase of 31.2% YoY. The oil and gas sales for the first nine months of 2005 amounted to RMB 39.49 billion (equivalent to US$ 4.79 billion), which represents an increase of 44.8% over the same period last year.

The average realized oil price in the third quarter increased 30.1% to US$52.40 per barrel, compared to US$40.28 for the prior-year period. The average realized gas price was US$2.94 per thousand cubic feet, an increase of 2.2% compared to US$2.87 in the same period last year. And year to date average realized oil and gas prices were US$46.74 per barrel and US$2.94 per thousand cubic feet respectively.

"Both the third quarter and nine months financial results set a historic record high. We reaped and enjoyed the benefit of strong oil price and production growth," said Mr. Yang Hua, Chief Financial Officer of the Company.

In the third quarter, CNOOC Limited made three new discoveries and completed four successful appraisals offshore China. During the period, two projects, including Bongzhong (BZ) 25-1/25-1S and Nanbao (NB) 35-2 came on stream successfully.

"We are confident to meet the full year production growth target offshore China set in early 2005, with the contribution of the coming new projects, though we have experienced the effect of the typhoons in the South China Sea," commented Mr. Zhou Shouwei, President of the Company.

"We are satisfied with our Q3 results, the performance of the Company is being further enhanced, strengthening our confidence in achieving the long term growth target," commented Mr. Fu Chengyu, Chairman and Chief Executive Officer.


              Third Quarter and Year-to-Date Production Summary


    Net Daily Production          2005                    2004
    Crude Oil & Liquids (bbl/d)   Q3          YTD         Q3         YTD
    Bohai Bay                     188,882     175,868     135,438    130,371
    Western South China Sea        46,712      50,399      55,644     57,736
    Eastern South China Sea        96,247     105,977     117,366     96,488
    East China Sea                  1,603       1,840       2,056      2,278
    Overseas                       22,963      22,601      27,315     30,296
    Subtotal (bbl/d)              356,406     356,684     337,819    317,168

    Natural Gas (mmcf/d)
    Bohai Bay                          49          48          49         45
    Western South China Sea           245         226         237        208
    Eastern South China Sea            --          --          --         --
    East China Sea                     18          18          15         17
    Overseas                           98          90          84         86
    Subtotal (mmcf/d)                 410         383         384        356

    Total Production (boe/d)      427,414     422,714     404,571    378,799


      Third Quarter and Year-to-Date Revenue and Expenditure (Unaudited)


                          RMB millions
                          2005                        2004
                          Q3            YTD           Q3            YTD
    Sales Revenue
    Oil & gas sales       14,758.4      39,492.4      11,244.9      27,272.5
    Marketing
     Revenue, net             62.8         146.4          87.2         187.7
    Others                    49.1         112.2          35.1         104.9
       Total              14,870.3      39,751.0      11,367.2      27,565.1

    Capital
     Expenditures
    Exploration              613.2       1,473.1         747.5       1,718.4
    Development            3,815.8      10,572.4       3,595.5       8,445.9
    Others                    19.6       1,056.2          11.3       5,021.6
       Total               4,448.7      13,101.7       4,354.3      15,185.9


                           US$ millions
                           2005                        2004
                           Q3            YTD           Q3            YTD
    Sales Revenue
    Oil & gas sales        1,808.5       4,794.0       1,358.6       3,295.0
    Marketing
     Revenue, net              7.7          17.8          10.5          22.7
    Others                     6.0          13.6           4.2          12.7
       Total               1,822.2       4,825.4       1,373.4       3,330.4

    Capital
     Expenditures
    Exploration               75.1         178.8          90.3         207.6
    Development              467.6       1,283.4         434.4       1,020.4
    Others                     2.4         128.2           1.4         606.7
       Total                 545.1       1,590.4         526.1       1,834.7


    Conversion rate
    (1) The translations of Renminbi into US dollars have been made at the
        rate of RMB8.1606 to US$1.00 (for the third quarter of 2005), and
        at the rate of RMB8.2379 to US$1.00 (average rate for the nine months
        ended September 2005), based on rates published by the People's Bank
        of China.
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