CNOOC Satisfied with Interim Results

CNOOC says its production increased steadily in the first half of 2007. The oil and gas production reached 85.4 million BOE, a year on year (yoy) increase of 4.5%.

For the first half of 2007, the Company produced 85.4 million BOE, up 4.5% from the same period last year, including 68.1 million barrels of crude oil and 99.7 billions cubic feet of natural gas. The net oil and gas production from offshore China was 74.6 million BOE, a slight increase of 0.3% over the first half of last year.

Affected by downward fluctuation of oil price since second half of 2006, our realized oil price was lower than the same period last year. For the first half of the year, our average realized oil price was US$58.80 per barrel, a yoy decrease of 5.8%. The realized gas price was flat yoy, at US$3.21 per thousand cubic feet.

The steady growth in the Company's production has partially offset the impact of the decline in oil prices. For the first half of 2007, the Company has generated RMB 33.22 billion from oil and gas sales, representing a decrease of 6.4% over the same period last year. The net profit was RMB 14.55 billion, a yoy decrease of 10.6%.

In the past six months, all of our operations proceeded smoothly. Significant results were achieved in exploration.

In the period, the Company had made 7 new oil and gas discoveries, which are Bozhong28-2 East, Bozhong26-3, Jinzhou25-1, Kenli20-1 in Bohai Bay and Weizhou11-7, Weizhou11-8, Weizhou6-1South in Western South China Sea. Other than Kenli 20-1, all of these discoveries are independent discoveries. In particular, we are pleased that the Jinzhou 25-1 discovery contains abundant reserves with light crude, and is expected to be developed into a large oil field.

Liuhua 11-1, which has suspended its production from the strike of typhoon "Chan Chu", started temporary production on June 27, 2007. During the process, all its 25 wells, which had been suspended for more than a year re- opened successfully. The oilfield operates steadily and produces 23,000 barrels of crude oil per day approximately.

Despite pressure from increases in service and commodity prices and the imposition of a special gain levy, the Company maintained sound cost control.

Mr. Fu Chengyu, Chairman and Chief Executive Officer of the Company commented," Like our international peers, the Company faces the challenge of lower oil price. Benefiting from solid operational performance and excellent management system, we have maintained stable and remarkable financial performance. I am quite pleased with the results. It is worth mentioning that the Company concluded the first half of 2007 with exciting exploration results, effective cost control and noticeable production growth. I am glad to share these good news with everyone."

For the first half of this year, our earnings per share were RMB0.34. In order to share the successful operating results of the Company with shareholders, the Board of Directors has approved the payment of an interim dividend of HK$0.13 per share for 2007.

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Brent Crude Oil : $54.16/BBL 0.44%
Light Crude Oil : $51.37/BBL 0.56%
Natural Gas : $3.37/MMBtu 2.12%
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