Chinese offshore giant
) reported third quarter 2013 total revenue of 56.14 billion yuan
($9.1 billion), up almost 15.9% from the year-earlier level. Out
of the total revenue, approximately 92% came from oil and liquids
sales, which amounted to 52.7 billion yuan ($8.5 billion), up
17.0%. The results were driven by higher oil price realizations.
In the third quarter, CNOOC's net production was 103.4 million
barrels of oil equivalent (MMBoe), up approximately 17.8% from
the year-ago level. Out of the total production, over 80%
comprised oil and liquids. The improvement was mainly
attributable to the production contribution from the acquisition
of Nexen Inc. and new oil and gas fields.
Without Nexen's output, production was flat year over year.
Overseas production and steady performances by the already
operational oil and gas fields also aided the increase.
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The company's average realized oil price increased 1.5% year over
year to $106.26 per barrel. Realized gas price decreased 6.9% to
$5.43 per thousand cubic feet (Mcf) from the year-ago level.
During the third quarter, CNOOC's capital expenditure (excluding
Nexen's impact) was 17.7 billion yuan, representing an increase
of 18.2% from the year-earlier period, mainly due to the increase
in development projects. Nexen's capital expenditure during the
quarter was around 4.7 billion yuan.
CNOOC's full-year 2013 production target of 338-348 million
barrels of oil equivalent (Boe) (excluding Nexen) remains
unchanged. Nexen's production contribution for 2013 is expected
to reach approximately 59 million boe.
We remain optimistic on CNOOC as its performance reflects its
premium assets portfolio, excellent execution strategy, unique
position as a pure oil play and potential transactions in the
merger and acquisition space.
During the quarter, CNOOC made 5 discoveries and successfully
completed the appraisal of 15 wells. Of these, Luda 5-2 North is
a mid-sized new discovery and Kenli 9-5/9-6 was proved to be a
mid-sized oil and gas structure.
The company currently holds a Zacks Rank #3 (Hold). However, the
Zacks Ranked #1 stocks of
Stone Energy Corp.
Linn Energy LLC
), are expected to outperform the market over the next few