Nexen boosts CNOOC production. 1H profit dips 2.3 pct

China’s CNOOC Limited has reported its total net oil and gas production in the first half of 2014 reached 211.6 million barrels of oil equivalent (BOE), up 6.8% year-on-year (yoy), with 36.3 million BOE contributed by Nexen.

Production from Buzzard oilfield in the UK North Sea boosted

The company’s average realized oil price was US$106.30 per barrel in the first half of 2014, representing an increase of 2.0% yoy, while average realized gas price rose 13.5% yoy to US$6.44 per thousand cubic feet.

Benefited from the growth of net oil and gas production and increase in realized oil and gas prices, the Company recorded RMB117.1 billion in oil and gas sales revenue, a yoy increase of 5.7%; meanwhile, net profit fell 2.3% yoy to RMB33.59 billion.

In the first half of 2014, the Company’s all-in cost was US$43.20 per BOE, up slightly by 2.0 % yoy, while operating cost was US$11.78 per BOE, up 7.0 % yoy, mainly attributable to the consolidation of two more months of Nexen’s performance.

In the area of exploration, the Company made 9 new discoveries and 23 successful appraisal wells. Among them, Lingshui 17-2, discovered by “Haiyangshiyou 981” drilling rig, was successfully tested and is expected to become the first large-sized deepwater gas field made by CNOOC’s independent exploration activities.

 

Related: CNOOC buys Canada’s Nexen for $15.1 Bln

While Luda 16-3 South structure is expected to become a mid-sized discovery after appraisal, Kenli 16-1 structure uncovers the good exploration potential ofsouthern slope of Laizhou Bay Sag in Bohai. Kenli 3-2 oilfields, Panyu10-2/5/8 project and Wenchang 13-6 oilfield have begun production within the year as scheduled while other projects are progressing accordingly.

During the period, CNOOC said it continued to advance the integration of Nexen, especially in the areas of management, resources development and corporate culture. Nexen’s safety and environmental protection achieved best performance in its history in the first half of 2014. Production efficiency of Buzzard oilfield in the UK North Sea was further enhanced, while production and operation of Long Lake oil sands project achieved significant improvement. The progress of integration reached the Company’s expectation.

Related: CNOOC Exec VP assumes role of Nexen CEO

Wang Yilin, Chairman of the Company, said, “In the first half of 2014, the Company has executed its “New Leap Forward” strategy in a solid way and achieved satisfactory results. We will endeavor to strengthen our management, enhance the growth quality and efficiency of the Company to create greater value for our shareholders.”

Li Fanrong, CEO of the Company commented, “During the first half of 2014, we have actively pushed ahead different areas of our business. Good progress was made in the production and operation and a healthy financial position was maintained. In the second half of the year, we will continue to work diligently to ensure that we meet our annual production and business targets.”

In the first half of the year, the Company’s basic earnings per share reached RMB0.75. The Board has declared an interim dividend of HK$0.25 per share (tax inclusive).

August 28, 2014

 

 

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