CNOOC Touts Record Highs in 2010

CNOOC announced its annual results for the 12 months ended December 31, 2010.

In 2010, the Company's net production reached 328.8 million barrels of oil equivalent (BOE), up 44.4% year-over-year (yoy), representing the highest production growth in its history. The record production growth is mainly attributable to production from new fields brought on stream since 2009, outstanding performance of the producing fields and the production contribution from newly acquired projects.

During the year, the Company's average realized oil price reached US $77.59 per barrel and its average realized gas price reached US $4.27 per thousand cubic feet, representing an increase of 28.0% and 6.5% yoy respectively. The strong growth of oil and gas production, together with the high realized price, facilitated the Company's oil and gas sales to reach RMB149.12 billion, an increase of 77.7% yoy. In the meantime, the Company's net profit hit a record high of RMB54.41 billion, with a remarkable growth of 84.5% yoy.

In 2010, the Company achieved 12 independent discoveries and successfully appraised 12 oil and gas structures by 18 appraisal wells in offshore China. In respect of exploration under production sharing contracts, besides the deepwater discovery of Liuhua 29-1, 3 oil and gas structures were successfully appraised by 5 appraisal wells. In 2010, the Company's reserve replacement ratio amounted to 202%, the highest since 2003.

In 2010, a total of 9 new projects successfully commenced production including Bozhong 3-2, Bozhong 29-4, Bozhong 19-4, Caofeidian 18-1, Bozhong 26-3, Luda 32-2, Weizhou 11-1E, Weizhou 6-8, and Huizhou 25-3. The production performance of each field either met or exceeded the expectations.

During the year, CNOOC Limited actively implemented its value-driven M&A strategy and made considerable achievements, including the acquisitions of interests in Bridas Corporation and Eagle Ford shale oil and gas project through which the Company has entered into the resource rich areas in South America and for the first time into the shale play in North America.

As a result of the improvement in efficiency and workload being postponed due to the weather constraints, the Company's total capital expenditure decreased 18.8% yoy to US $5,071 million, with US $2,429 million spent on development, US $1,111 million on exploration, and US $1,437 million on production. During the period, the Company's all-in cost increased 11.4% yoy to US $24.76 per BOE.

Mr. Yang Hua, CEO of the Company commented, "In 2010, CNOOC Limited recorded exciting results in production growth, reserve replacement and net profit, demonstrating the Company's outstanding operational and management capabilities. Although in the year, the pressure on cost inflation was still one of the steep challenges faced by the entire industry, we were able to maintain a competitive cost structure among the global peers by implementing stringent cost control measures."

In 2010, our basic earnings per share (EPS) reached RMB1.22. The Board of Directors has proposed a year-end dividend of HK$0.25 per share. Together with an interim dividend of HK$0.21 per share, the Company will distribute a total dividend of HK$0.46 per share in the year.

Mr. Fu Chengyu, Chairman of the Company commented, "In 2010, I'm pleased that the Company maintained its excellent profitability while achieving rapid growth. We are willing to share the benefits with our shareholders in dividends according to our established dividend policy."