BLBG:Cnooc Sales Rise 3.7% as Oil Prices Counter Output Drop
Cnooc Ltd. (883), China’s biggest offshore energy explorer, posted a 3.7 percent gain in quarterly revenue as higher crude prices helped counter lower output as the country’s largest field remained shut after oil spills.
Sales rose to 48.84 billion yuan ($7.7 billion) in the three months ended March 31, the Beijing-based company said in a statement today. Output fell 6.3 percent from a year earlier to 79.8 million barrels of oil equivalent. Cnooc, which gets almost all its income from oil and gas production, doesn’t report first-quarter profit.
Cnooc has forecast a 2.7 percent increase in production this year as it plans to start new fields and resume operations at the Penglai 19-3 field, which were suspended in September. The state-controlled company has bid for about $9 billion of overseas assets in the last two years to diversify reserves, including shale-gas acreages in North America.
“Cnooc will see reasonable organic growth in production if the Penglai oilfield can start by the middle of the year,” said Anna Yu, an analyst at ICBC International Research Ltd. in Hong Kong. “Higher crude prices have cushioned Cnooc’s revenue.”
The explorer’s shares have fallen 20 percent in Hong Kong trading in the past year, outpacing the 14 percent decline in the benchmark Hang Seng Index. (HSI) Cnooc fell 0.3 percent to close at HK$15.96 today. The statement was issued after market close.
Brent oil rose 12 percent to $118.45 a barrel in the first quarter from a year earlier.
Oil Prices
Cnooc realized an average $120.79 from every barrel of oil, about 19 percent higher than a year earlier, according to the statement, while its realized gas price rose 20 percent to $5.88 per thousand cubic feet.
The company lost 62,000 barrels a day after the government ordered the closure of the Penglai 19-3 oilfield. Cnooc owns 51 percent of the oilfield, and operator ConocoPhillips (COP) the rest.
Cnooc was forced to cut its 2011 production goal by as much as 9.3 percent after the field was shut and its $7.1 billion purchase of BP Plc (BP/)’s Argentine unit collapsed in November. The explorer produced 331.8 million barrels of oil equivalent last year and its average realized oil price surged 41 percent to 109.75 a barrel, the company said March 28.
The unit of China National Offshore Oil Corp. targets producing the equivalent of 330 million to 340 million barrels of oil in 2012.
New Fields
Chief Executive Officer Li Fanrong said last month the field would start this year, without giving a time frame.
The energy explorer will start four blocks off the Chinese coast this year, Cnooc said March 28, when it reported 2011 earnings. These are Weizhou 6-9/6-10, Yacheng 13-4, Panyu 4-2/5- 1 and Liuhua 4-1 blocks in the South China Sea.
Cnooc has “made significant progress in exploration,” Li was cited as saying in today’s statement. “These achievements will strongly support our production growth target of 6 percent to 10 percent CAGR (compound annual growth rate) from 2011 to 2015.”
Cnooc made five new discoveries and drilled as many appraisal wells offshore China, it said today. Capital expenditure on exploration, development and production rose 58 percent to 9.64 billion yuan in the quarter.
“The new projects will provide enough output to help Cnooc meet its moderate growth target this year,” ICBC’s Yu said. “Achieving higher growth will hinge on how quickly the Penglai site resumes production.”
To contact the reporter on this story: Aibing Guo in Hong Kong at aguo10@bloomberg.net
To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net
http://www.bloomberg.com/news/2012-04-24/cnooc-sales-rise-3-7-as-oil-prices-counter-output-drop.html
