CNOOC 3Q: Penglai Incident Hinders Annual Production Target (China)

CNOOC Limited today announced its results for the third quarter of 2011.  Having benefited from rising realized oil and gas prices, the total unaudited oil and gas sales revenues of the Company reached approximately RMB46.26 billion for the third quarter of 2011, representing a significant increase of 23.7% year over year (YOY).

In the third quarter, the Company’s average realized oil price rose 50.3% YOY to US$112.04 per barrel while the Company’s average realized gas price increased 20.0% YOY to US$5.18 per thousand cubic feet.

Mainly due to the natural decline of certain existing fields and the production loss as a result of the suspension of production of Penglai 19-3 oilfield in Bohai Bay, the Company achieved a total net production of 80.9 million barrels of oil equivalent (BOE) for the third quarter of 2011, down by 9.1% YOY.

During the period, the Company made two new discoveries and nine successful appraisal wells.

For the third quarter of 2011, attributable to busy development pipeline and extensive exploration activities, the Company’s capital expenditure was increased 28.8% YOY to approximately RMB10.55 billion.

Mr. YANG Hua, Chief Executive Officer of the Company commented, “In the third quarter, the adjusted annual production target was further challenged by the suspension of production at PL19-3 oilfield due to the oil spill incident. The Company will be well prepared to deal with these challenges through stabilizing production of the existing fields as well as pushing for the construction on the new projects. In the meantime, the Company will properly handle and resolve all subsequent issues of the oil spill incident. We will also carry out thorough safety inspection in all offshore area to prevent any potential risks and thus laying a better foundation for the Company’s long-term development.”

46.26 billion Chinese yuan = 7.27748442 billion U.S. dollars

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Source: CNOOC, October 26, 2011