COSL Reports Increased Revenues (China)
China Oilfield Services Limited announced its unaudited results for the six months ended 30 June 2012.
During the first half of 2012, a volatile global economy, coupled with jittery oil prices, established a challenging operating environment for the Group. Faced with these challenges, the Group adopted a market oriented approach, optimized allocation of its resources, and actively consolidated its presences in existing markets while continuously exploring overseas markets. Benefiting from full capacity utilization for both domestic and overseas operations, as well as commencement of operation of new equipment, the Group’s revenue for the six months under review reached RMB10,010.6 million, up 23.0% from RMB8,139.2 million for the last corresponding period. Profit from operations during the period reached RMB2,949.3 million, up by RMB342.1 million or 13.1% year on year. Profit attributable to shareholders for the six-month period surged 15.8% year on year to RMB2,397.7 million. Basic earnings per share were RMB53 cents （1H2011: RMB46 cents）.
On Drilling Services, the new semi-submersible drilling rigs that commenced operation during the period significantly improved COSL’s deepwater operating capability, while boosting the Group’s international competitiveness in overseas drilling operations. COSLPioneer continued to provide drilling services in North Sea for Statoil and received good recognition due to its performance. Operated and managed by COSL, HYSY981, the sixth-generation deepwater semi-submersible drilling rig, commenced drilling operation in China South Sea in the first half of 2012, showing steady operation and excellent performance in all kinds of operational indicators.
For the 27 jack-up drilling rigs the Group currently owns, 13 are operating in Bohai China, 3 in China South Sea, 1 in China East Sea, 1 in China Yellow Sea, 9 in overseas waters including Indonesia, Middle East and Gulf of Mexico.
During the period, drilling rigs of the Group achieved 5,358 operation days, up 871 days year on year, with their calendar-day utilization rate up 2.2 percentage points to 92.8%. Jack-up drilling rigs operated 591 more days year on year due to the addition of 286 days from full-capacity operations of COSLSeeker and COSLConfidence. COSL921, COSL922, COSL923 and COSL924 added another 484 operation days, while the preparation of drilling rig BH8 for overseas operation resulted in 156 fewer days, and maintenance of BH9, BH12, COSL931, COSL936, NH1, COSLStrike and COSLBoss resulted in 165 fewer days. Other jack-up drilling rigs added 142 operation days due to a reduction in time spent on maintenance. Semi-submersible drilling rigs operated 280 more days year on year due to the operation commencements of COSLPioneer and HYSY981, which added 173 operation days and 133 operation days, respectively; while other semi-submersible drilling rigs operated 26 fewer days due to maintenance.
Two accommodation rigs of the Group continued serving clients in North Sea, and achieved 364 operation days during the period under review, translating into available-day and calendar day utilization rates of 100.0%. The four module rigs deployed in Gulf of Mexico, which had suffered from declines in number of operation days in 2011 due to major maintenance works, operated regularly during the period under review and operated 723 days with a calendar-day utilization rate of 99.3%.
Service fees for the period under review increased year on year due to deployment of new semi-submersible drilling rigs. The average day rate of drilling rigs during the period under review stood at USD140,000, up 13.8% year on year from USD123,000 same time last year.
Well Services saw operation volume for the period under review greatly rebounded from 2011. During the first half of 2012, the Group continued its effort in enhancing capabilities of its technical services, while consolidating and actively expanding its reach in domestic and international markets. ELIS-II, the logging system developed in-house by COSL, successfully performed a breakthrough logging operation in west of China South Sea. Historically, ELIS system can only be used in development and production of well operations, and as a downhole tool during exploration. In addition, the Group successfully finished its first fracturing operation for Sinopec in the first half of 2012. In overseas markets, the Group completed the first cable perforating operation and a blowout preventer pressure test operation for Missan oilfield in Iraq.
On Marine Support and Transportation Services, the Group’s vessels achieved 11,967 operating days amid fierce competition, down 1,089 days year on year, mainly due to 357 fewer operating days prompted by 3 vessels that were written off; 362 fewer days due to upgrading of 2 vessels into geophysical survey vessels; 181 fewer days due to the maintenance of NH216. Meanwhile HYSY683 contributed 151 operation days, BH285, BH268, New Century No.1, NH210 and COSL222 achieved 184 additional days, and other utility vessels operated 524 days fewer in aggregate. For the first half of 2012, after discounting impact from vessels being returned, written off or under maintenance, the utilization rate of the Group’s self-owned vessels was 90.9%, down 5.6 percentage points from 96.5% from the same period in 2011. The Group achieved an aggregate freight volume of 932,000 tons for its oil tankers during the six months under review, up 18.8% from 784,000 tons recorded during the same period in 2011. The aggregate freight volume for its chemical carriers increased to 1.14 million tons, up 3.8% from 1.098 million tons for the same period in 2011.
On Geophysical and Surveying Services, 3D seismic data collection business saw its golden age during the first half of 2012, 3D collection volume increased by 3,721 km² year on year, reaching 13,659 km², primarily driven by the additional operation volume of 4,188 km² achieved by the new 12-streamer survey vessel HYSY720, which was delivered in 2011; HYSY719 achieved an additional 1,273 km²; moreover, with the introduction of BH517 to the seabed cable segment, operation volume increased by 124 km², while other vessels contributed to the aggregate 1,864 km2 decline in work volume due to maintenance. 2D collection volume declined 5,256 km year on year to 10,946 km, mainly due to the modification work on BH517 into a seabed cable vessel, which shaved 7,410 km off from the total volume. In terms of data processing, 3D data processing operation volume increased by 2,985 km² or 88.7% year on year while 2D data processing operation volume recorded a 9.7% decline from last year.
During the first half of 2012, the Group’s deepwater engineering survey vessel HYSY708, officially commenced operation in April 2012. HYSY708, with deepwater engineering survey and engineering support functions, is currently the only engineering survey vessel in China that can operate under the fifth level of sea-state conditions. It serves as a strong addition to enhance COSL’s deepwater service capabilities.
Mr. Li Yong, CEO and Executive Vice President of COSL, concluded: “The Group achieved encouraging results during the first half of 2012, thanks to successes in tapping opportunities in domestic and overseas markets, deployment of equipment for operations in various markets, enhancement of operation efficiency and capacities added by new equipment. Despite higher cost pressure we expect to face in the second half, new capacities will help drive COSL’s businesses and the Group will continue to expand its markets and tap into demand for new businesses. While steadily developing our domestic businesses, we will continue to intensify development of our overseas businesses in an effort to improve our operating results further for the rest of the year and maximize returns for our shareholders.”
Press Release, August 21, 2012