CNOOC Ramps Up Production by 48.8% in 3Q10

CNOOC achieved a total net production of 88.7 million barrels of oil equivalent (BOE) for the third quarter of 2010, representing an increase of 48.8% year over year (YOY).

The production growth in this quarter was mainly attributable to: the ramping up of production from projects that came on stream since 2009, the outperformance of existing fields, the contributions from newly acquired projects, and lower than expected losses from typhoons.

Thanks to all of these factors, the Company's total net production of 2010 is expected to exceed its annual production target and reach 319-329 million BOE.

Benefiting from increased oil and gas production and higher realized oil prices, the total unaudited revenue of the Company amounted to approximately RMB38.91 billion for the third quarter of 2010, representing a significant increase of 63.8% YOY. During this period, the Company's average realized oil price increased 9.3% YOY to US$74.15 per barrel, while its realized gas price was US$3.96 per thousand cubic feet, almost same as the previous year.

Within the period, the Company started up five new projects, including: Bozhong 19-4, Bozhong 29-4, Luda 32-2, Weizhou 6-8 and Bozhong 26-3. On the exploration side, the Company and its partner successfully drilled five appraisal wells.

Due to the combination of cost savings through work efficiency, delay in certain development projects, and the intensive workload scheduled in the fourth quarter, the Company's capital expenditure for this quarter was approximately RMB8.19 billion, representing a decrease of 27.2% YOY.

Mr. Yang Hua, the Vice chairman and CEO of CNOOC Limited said, "The production figure in the third quarter is impressive, and we would expect a plenteous harvest this year. Under the superior oil prices, the Company will continuously strive to ensure the steady growth of the production and reserve to serve the Company's long term development and to maximize the shareholders' value."