COSL enhances operational efficiency. Revenue up

China Oilfield Services Limited (“COSL”) announced its unaudited results for the three months ended 31 March 2014.

During the first quarter of 2014, the Group ramped up its operational capacity which significantly enhanced its operational efficiency. On drilling services, COSLGift, a newly purchased jack-up drilling rig operated in Southeast Asia during the Period, while commencement of operation of the 4 drilling rigs since last year contributed greatly as well. On well services, newly added equipment in the domestic market in China further boosted work volume as well as segment revenue, while the marine support and transportation services and geophysical and surveying services segments remained stable.

Primarily driven by the drilling and well services sectors, the Group’s revenue reached RMB6,749.3 million for the first quarter ended 31 March 2014, up by 18.0% year on year. Net profit was RMB1,417.7 million, representing an increase of 17.1% year on year. Basic earnings per share increased 11.1% year on year to RMB0.30.

On drilling services, added production capacity from COSLGift and Kantan II was offset by the maintenance of various rigs during the Period. As a result, the Group’s drilling rigs achieved 3,061 operating days, representing an increase of 5.6% or 163 days year on year, of which the jack-up drilling rigs achieved 2,187 operating days, representing a decline of 149 days year on year.

The semi-submersible drilling rigs achieved 874 operating days, representing an increase of 312 days year on year, mainly due to the 227 operating days contributed by NH7, COSLPromoter and NH9, which were newly added last year, and the increase of 85 days in total by other rigs due to the lower number of days spent in repair and maintenance.

An increase in repair and maintenance days for jack-up drilling rigs during the Period made the available-day utilisation rate of drilling rigs 1.1 percentage points lower, while the calendar-day utilisation rate also decreased by 6.8 percentage points year on year.

The calendar-day utilisation rate of the Group’s two accommodation rigs dropped to 70.6% due to maintenance for one of the two rigs which was responsible for 53 fewer operating days when compared with the same period last year. The four module rigs operating in the Gulf of Mexico achieved 10 more operating days, totaling 358 operating days, translating into a calendar-day utilisation rate of 99.4%.

On marine support and transportation services, the Group owned vessels achieved a total of 5,701 operating days for the first quarter of 2014, down by 193 days, mainly due to the retirement of 5 vessels last year, which were responsible for 360 fewer operating days. HYSY611 and HYSY612, which were newly purchased last year, added 180 operating days, while other vessels achieved 13 fewer operating days. Chartered vessels achieved a total of 4,086 operating days, up 472 days year on year.

On well services, reaping benefits from the increase in the number of drilling rigs in operation and application of high-end technologies, the operation volumes of most services increased, thereby brought about a higher revenue contribution from this segment to the total.

On geophysical and surveying services, the operation volume of 2D data collection dropped 1,965 km year on year, mainly due to a move of operation sites of BH512 during the Period. The volume of 3D data collection decreased by 945 km2 year on year, owing to maintenance of HYSY718 and Dong Fang Ming Zhu earlier in the year. As for data processing services, the volume of 3D data processing experienced strong growth and increased 2,531 km2 year on year, due to the enhancement of processing techniques.

COSL Group CEO and President Li Yong said: “The first quarter results marked a steady start for 2014, the Group achieved satisfactory results following a series of measures, including effectively enhancement of efficiency and lowering of costs. Looking ahead for the three subsequent quarters of 2014, we will continue to identify potential areas in enhancing management to ensure smooth delivery of services under the confirmed contracts, as well as grasping market opportunities, and flexibly pursuing the “Purchase, Build and Charter” three-way approach and other strategies to meet domestic and international market demand. Thus, I am very confident about meeting the Group’s full-year growth targets.”

[mappress]

May 01, 2014