CNOOC (CEO) Revenues Fall in 2015, Production Increases

Chinese offshore giant CNOOC Ltd. CEO reported 2015 total revenue of 171.44 billion yuan (US$24.49 billion), down 37.6% from the year-earlier level. For 2015, the company reported net profits of 20.25 billion yuan (US$3.25 billion), down 66.4% year over year. This decline was mainly due to the decrease in international oil prices.

Production

For 2015, CNOOC’s net production was 495.7 million barrels of oil equivalent (MMBoe), up 14.6% from the year-ago level. The company’s annual production was at the upper end of its target set at the beginning of the year.

Price Realizations

The company’s average realized oil price decreased 46.6% year over year to $51.27 per barrel. Realized gas price also fell 0.8% to $6.39 per thousand cubic feet (Mcf) from the year-ago level.

Capital Expenditure

During 2015, CNOOC’s capital expenditure totaled 66.5 billion yuan, reflecting a decrease of 37.9% from the year-earlier period. This was primarily owing to lower development projects. CNOOC declared that a total of seven projects that came on stream, many ahead of schedule.

Discoveries

In 2015, CNOOC made 16 new discoveries. It also effectively appraised three mid-to-large structures in Bohai: Caofeidian 6-4, Luda 16-3/16-3S and Bozhong 34-9, which are mainly light crude oil. Also two oil discoveries were made in Liuhua20-2 and Liuhua21-2 in BaiyunSag of Eastern South China Sea. The company also successfully expanded the exploration area and formation of the central valley channel in Western South China Sea, with discovery of Lingshui 18-1 and appraisal of Lingshui 25-1.

Guidance

CNOOC expects 2016 capex to be no more than RMB 60 billion. Production target for 2016 is expected in the range of 470–485 MMBoe. It expects four new projects to come on stream in 2016.

Zacks Ranks

CNOOC currently carries a Zacks Rank #3 (Hold). Some better-ranked players in the energy sector include SolarEdge Technologies, Inc. SEDG, Braskem S.A. BAK and Enviva Partners, LP EVA. Each of these stocks sports a Zacks Rank #1 (Strong Buy).

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