China: Fortune Oil Revenues Up

Fortune Oil today reports its results for the financial year ending 31 December 2012.

Corporate highlights:

• Agreed transformational combination of Fortune Oil’s natural gas business with that of China Gas Holdings Limited for consideration of US$400 million, of which Fortune Oil share is US$340 million.
• Will strengthen Fortune Oil’s strategic investment in China Gas Holdings Limited which will then have natural gas operations in 200 cities across China.
• Completion expected around mid-year 2013 following receipt of regulatory approval and will significantly strengthen the Group’s balance sheet.

Financial highlights:

• Revenues including share of jointly controlled entities increased by 18% to £739 million (2011: £625 million).
• Operating profit increased by 4% to £28.5 million (2011: £27.4 million).
• Profit after tax attributable to Fortune Oil shareholders decreased 14% to £15.7 million (2011: £18.2 million).
• Profit after tax attributable to Fortune Oil shareholders before other gains increased to £11.0 million (2011: £10.8 million).
• Natural gas business operating profit increased 51% to £15.8 million (2011: £10.5 million).
• Share in Bluesky Aviation’s net profit matched the previous year’s record profit £11.6 million (2011: £11.6 million).
• Maoming Single Point Mooring facility’s revenues were maintained at £17.3 million (2011: £17.2 million).
• Proposed dividend of 0.16p per share for 2012 (2011: 0.18p per share).

Operational highlights:

• Bluesky Aviation jet fuel sales increased 15% to 3.0 million tonnes (2011: 2.6 million tonnes),
• Maoming Single Point Mooring facility matched 2011 record throughput of 11 million tonnes, (2011: 11 million tonnes).
• The Company’s joint venture China Gas Group Limited and its associates (including shares held directly by Mr. Liu Minghui, the Managing Director of CGH) currently hold 911,550,000 shares in China Gas Holdings Limited representing approximately 20.0 per cent of total issued shares of China Gas Holdings Limited.
• In the City Gas business there was a 32% increase in the number of new domestic gas customers with approximately 280,000 total customers now connected.
• Obtained government approvals to progress the construction of the gas gathering system for coal bed methane project in Liulin. This is a critical step towards commercialisation of gas from this block.
• Achieved a major first for China in obtaining the regulatory approvals for the commercial operation of dual fuel LNG ship.

Outlook:

• On completion, the China Gas Holdings Limited transaction will further strengthen position in the Chinese natural gas market, through ownership of an enlarged stake and the ability to exercise significant influence in the company.
• Gas gathering system will enable commercial sales of gas from the Liulin block in 2013.
• Guangzhou airport expansion in progress to build a second terminal and a third runway will increase demand for aviation fuel under the Bluesky joint venture.
• Final stages of negotiating a replacement structure for the Maoming Single Point Mooring partnership, which will include the development of a new pipeline and buoy, increasing the capacity of the terminal.
• Expanding opportunities to supply and trade other hydrocarbons, including diesel.

Mr. Qian Benyuan, Chairman of Fortune Oil, commented:

“Fortune Oil delivered another good performance in 2012 and continued to make excellent progress across its core businesses. The Company’s strong position, significant industry experience and clear strategic focus have allowed us to benefit from opportunities that have arisen.

“We remain excited about the prospects for Fortune Oil. We have strengthened our position in the China gas industry through our transaction with China Gas Holdings Limited, and remain confident on the lookout for other growth opportunities in the oil sector. In addition to the China Gas transaction, we have a number of discussions, negotiations and strategic initiatives ongoing, including in relation to our Maoming Single Point Mooring business, and we look forward to updating investors on progress as soon as it is possible to do so. Given Fortune Oil’s attractive position within China’s expanding energy and resource markets, we remain confident of delivering further success in the future.”

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LNG World News Staff, April 25, 2013