CNOOC Increases Production by 15%, Completes Quarter with 7 Discoveries

CNOOC announced its total daily net production of 566,860 barrels of oil equivalent (BOE) for the first quarter of 2009, representing an increase of 15.0% year-on-year (YOY).

Benefiting from the production contribution of Platform B of Penglai 19-3 Phase II, Xijiang 23-1 and Wenchang oilfields, the Company's production of crude oil and liquids amounted to 468,535 barrels per day, an increase of 19.7% YOY. During the quarter, the Company's net gas production reached 563 million cubic feet per day. Our net production overseas increased by 30.9% YOY to 31,481 barrels per day, mainly attributable to production from Northwest Shelf Project in Australia and OML 130 in Nigeria.

Affected by the relatively low oil price in the same period, the Company's average realized oil price decreased 53.2% YOY to US$41.56 per barrel in the first quarter. Our average realized gas price was US$3.89 per thousand cubic feet, an increase of 6.6% YOY. Comparing with the first quarter of 2008, our oil and gas production rose substantially in the first quarter of 2009, however, the total unaudited revenue decreased 41.9% YOY to RMB13.95 billion.

In the first quarter of 2009, the Company's capital expenditure reached approximately RMB7.51 billion with an increase of 23.1% YOY. Due to a busy schedule of project construction, the Company's development expenditure amounted to approximately RMB5.62 billion, a 37.9% YOY increase.

During the quarter, we made seven independently discoveries offshore China, in which Bozhong 2-1 and Qinhuangdao 29-2 are sizable with thick oil pays, and contain light crude. Meanwhile, five hydrocarbon bearing structures were appraised successfully by the Company and its partners.

In the first quarter of 2009, all major projects are proceeding smoothly as scheduled. Bozhong 28-2S and Panyu 30-1 offshore China and OML130 in Nigeria have commenced production in the period.

Mr. Fu Chengyu, Chairman and Chief Executive Officer of the Company said," In the first quarter of 2009, the Company's operation achieved exciting progress in production growth and exploration activities. In particular, the oversea projects are performing well. In the face of financial crisis and low oil price environment, the Company will maintain prudent financial strategy to create value for our shareholders. "