CNOOC Cites 44% Production Increase in '09

CNOOC Limited announced its annual results for the 12 months ended December 31, 2009.

In 2009, the Company's net production reached 227.7 million (mm) barrels of oil equivalent (BOE) with a year-over-year growth of 17.2%, which set the Company at a leading position among its peers in terms of growth percentage. The outstanding performance of new fields brought on stream in the past two years, together with the producing fields contributed greatly to the strong production growth.

During the period, affected by the sharp decline of the international oil prices compared with the year before, our average realized oil price fell 32.2% to US $60.61 per barrel. The average realized gas price increased 4.6% to US $4.01 per thousand cubic feet. Thanks to the strong growth of oil and gas production, the Company realized oil and gas sales of 83.91 billion RMB and a net profit of 29.49 billion RMB.

To facilitate the development of the Company, we further increased our investment on exploration, development and production during the year. The Company spent US $1.07 billion on exploration, up 13.8% YOY, while our development and production Capex reached US $4.16 billion and US $0.99 billion, representing an increase of 19.2% and 44.7% respectively.

In 2009, the Company recorded excellent exploration results. We have achieved 15 independent discoveries and successfully appraised 11 oil and gas structures in offshore China, including quite a few independent discoveries in adjacent area around Shijiutuo uplift and Liaodong Bay in Bohai area, which are anticipated to become a new base for our reserve growth. In terms of PSC exploration, 2 discoveries were successfully made, among which the deepwater discovery LiuHua 34-2 and successful appraisal of LiWan 3-1 represent another important progress of the deepwater exploration. In the meantime, the Company made 2 discoveries in overseas. In 2009, the Company's reserve replacement ratio amounted to 163%, far beyond the initial target set earlier this year.

In 2009, as a result of effective project management, the Company successfully started up 11 new fields. During the year, more than 20 projects were under construction and all have been going on smoothly.

During the period, the Company continued to exercise stringent cost control policy. Benefiting from this, the Company reports an all-in cost of US $22.08 per barrel and maintains its competitive cost advantage among global peers.

Mr. Yang Hua, President and CFO of CNOOC said, "The Company's outstanding operating and management capability enabled us to again meet our production target set at the beginning of the year. I am gratified of all the accomplishments and even more confident in achieving our production target in 2010. "

In 2009, our earnings per share (EPS) reached 0.66 RMB. The Board of Directors has proposed a year-end dividend of HK$0.20 per share. Together with an interim dividend of HK$0.20 per share, the Company would distribute a total dividend of HK$0.40 per share in the year.

"Facing challenges from the market, we adhere to our established strategies, and make great efforts to maintain steady growth as well as enhance our sustainable development ability, which help us conclude the year with satisfactory results," Mr. Fu Chengyu, Chairman and CEO of the Company commented.