CNOOC Ups Profit by 22.1%

CNOOC Limited on Thursday announced its annual results for the 12 months ended December 31, 2006.

Last year, the Company's net income hit a historical high of RMB 30,926.9 million, representing an increase of RMB 5,603.8 million or 22.1% from 2005. Earnings per share reached RMB 0.73.

The total revenue of the Company amounted to RMB 88,947 million, up 28% from last year. The Company generated revenue of RMB 67,828 million from oil and gas sales, an increase of RMB 14,410 million, or 27% over the same period of last year.

The Company produced 167 million barrels of oil equivalent in 2006, a yoy increase of 7.9%, including 136 million barrels of oil and 179 billion cubic feet of natural gas.

The Board of Directors has proposed a year-end final dividend of HK$0.14 per share to shareholders. Together with the interim dividend of HK$ 0.12 per share, the Company would distribute total dividend of HK$0.26 per share to our shareholders for the fiscal year of 2006.

Mr. Yang Hua, Executive Vice President and Chief Financial Officer of the Company, commented: "With increasing trend of unit cost in the industry, our stringent cost control has allowed the cost increased at a lower pace than our peers. Our excellent financial performance evidenced the Company's effective cost management, higher production volume, and the high level of international oil price."

In the year, the Company made extraordinary progresses, especially in exploration, development and production.

In 2006, the Company's exploration activities led to 10 oil and gas discoveries, including the first deepwater discovery offshore China-Liwan 3-1, and 6 appraisal successes offshore China. During the year, we realized a reserve replacement ratio of 199% and increased net proved reserves by 332 million BOE. As of December 31, 2006, the Company has accumulated net proved reserves at approximately 2.53 billion BOE.

In 2006, 7 new projects commenced production successfully. In addition, the Company overcame the typhoon attack and achieved the production target as planned.

"Despite 2006 was a year full of challenges, the production and reserves growth did not slow down. I'm proud of the Company's significant progress in oil and gas exploration, development and production in 2006," said Mr. Zhou Shouwei, President of the Company.

From perspective of overseas business, CNOOC Ltd. successfully completed acquisition of a 45% interest in Nigerian OML 130 Block and further extended exploration activities to Kenya, Equatorial Guinea, Australia, etc.

"I'm glad that the Company successfully concluded the year both in production and profit. We have delivered satisfactory returns to shareholders. This annual result demonstrated again the healthy fundamentals and excellent management of the Company," said Mr. Fu Chengyu, Chairman and Chief Executive Officer of the Company.