CNOOC Sees Production, Revenue Growth in 1Q

CNOOC announced its results for the first quarter of 2010. During the period, the Company achieved a total net production of 67.3 million barrels of oil equivalent (BOE), representing an increase of 31.9% year-on-year (YOY). Total unaudited revenue surged 118.5% to RMB30.49 billion.

In the first quarter of 2010, the Company produced 55.0 million barrels of crude oil and liquids, an increase of 30.4% YOY, and 71.6 billion cubic feet of natural gas, up 41.4% YOY. The production growth was mainly attributable to the production from projects that came on stream in 2008 and 2009 and the outstanding performance of existing oil and gas fields.

During the period, the average realized oil and gas prices rose 81.4% and 13.9% YOY to US $75.37 per barrel and US $4.43 per thousand cubic feet respectively. Benefiting from increased production and sales volume and higher realized prices, the Company recorded a total unaudited revenue of approximately RMB30.49 billion with a significant increase of 118.5% YOY.

In the first quarter of 2010, the Company and its partner made five new discoveries offshore China, among which, Penglai 9-1 is a sizable discovery. Meanwhile, the Company and its partner successfully drilled five appraisal wells.

On the development side, all major projects are proceeding smoothly as scheduled. Bozhong 3-2, Weizhou 11-1E and Caofeidian 18-1 commenced production during the period.

In the first quarter of 2010, CNOOC International, a wholly-owned subsidiary of the Company, entered into an agreement with Bridas Energy to form a 50:50 joint venture in Bridas Corporation for a consideration of approximately US $3.1 billion in cash. Completion of this transaction is expected to take place in the first half of 2010 subject to, amongst others, necessary government and regulatory approvals of PRC.

During the period, the Company's capital expenditure fell 22.7% YOY to approximately RMB5.80 billion. As a result of major workload scheduled to be carried out in the second quarter or later this year, the Company's development expenditure was approximately RMB3.09 billion, representing a decrease of 45.0% YOY.

Mr. Fu Chengyu, Chairman and Chief Executive Officer of the Company commented, "In the first quarter, the Company achieved strong production and revenue growth as well as encouraging exploration discoveries. I believe that such solid results will provide strong support for achieving our 2010 target."


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