CNOOC’s 2012 Net Profit Down on Increased Tax and Exploration Expenses

CNOOC: 21 New Discoveries and 19 Successful Appraisals in 2012

CNOOC Limited today announced its annual results for the 12 months ended December 31, 2012.

In 2012, the Company said it had made outstanding achievements in exploration activities with breakthroughs in shallow water and deepwater offshore China as well as overseas. Among a total of 21 new discoveries and 19 successful appraisals of oil and gas structures, Penglai 9-1, Dongfang13-2 and Qinhuangdao 29-2/29-2 East all have the potential to be developed into large sized oil and gas fields. The Company’s reserve replacement ratio amounted to 188% during the year.

Net profit down

The projects that were planned to come online in 2012 all commenced production within the year, and Penglai 19-3 oilfield was given the green light in February, 2013 to gradually resume production. Having benefitted from the production contribution of the new oil and gas fields and good performance of the producing oil and gas fields, the Company’s oil and gas production maintained a steady growth and reached 342.4 million barrels of oil equivalent (“BOE”), representing an increase of 3.2% year-over-year (“yoy”). The Company is fully confident to achieve its 2011 to 2015 production CAGR target.

In 2012, the Company’s average realized oil price amounted to US$110.48 per barrel and its average realized natural gas price reached US$5.77 per thousand cubic feet, representing an increase of 0.7% and 12.0% yoy, respectively. The Company’s oil and gas sales revenue reached RMB194.77 billion, up by 2.9% yoy, and the net profit was RMB 63.69 billion, a decrease of 9.3% yoy primarily caused by the increased tax and exploration expenses.

During the period, attributed to the factors including the imposition of the resource tax, the Company’s all-in cost rose 16.8% yoy to US$35.73 per BOE.

Capex increased

In 2012, the Company’s total capital expenditure reached approximately US$9.2 billion, up 43.1% yoy.

CNOOC Limited announced the acquisition of Nexen Inc. on July 23, 2012 and successfully closed the transaction on February 26, 2013. Through the acquisition, an important platform has been established for the overseas development. The transaction would bring rich resources and diversified asset portfolio for the long term development of the Company. Moreover, the Company completed the acquisition of partial working interest in Exploration Areas 1, 2 and 3A in Uganda.

Li Fanrong, CEO of the Company commented, “In 2012, we made significant progresses in all aspects of our business under the guidance of our “A New Leap Forward” blueprint and maintained a good performance. In 2013, the Company will remain committed to enhancing the capability for sustainable development while ensuring health, safety and environmental-friendly operations and endeavor to build a responsible international energy company.”

In 2012, basic earnings per share reached RMB1.43. The Board of Directors has proposed a year-end dividend of HK$0.32 per share (tax inclusive).

Wang Yilin, Chairman of the Company commented, “2012 was the inaugural year that we implemented our “A New Leap Forward” strategy. In this year, we made outstanding achievements in exploration and overseas expansion through dedicated efforts of the whole company. We also successfully reached our major production and operation targets, adding more resource reserves for the future development of the Company and further diversified our asset portfolio.”


Press Release, March 22, 2013