China's dominant producer of offshore crude oil and natural gas,
) has made two exploration discoveries − Luda 6-2 and Lufeng 15-1 −
in two different plays in China.
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Located in the Liaodong Bay in Bohai, Luda 6-2, reaches an average
water depth of about 31 meters. The drilling wells - Luda 6-2-4 and
Luda 6-2-5 - came across 40 and 147.6 meter thick oil pay zones,
respectively. The tests ascertained an average yield of 850 barrels
Additionally, Lufeng 15-1 is situated in the Pearl River Mouth
Basin and reaches an average water depth of 283 meters. The
exploration well Lufeng 15-1-2 hit upon a 26.8 meter thick oil pay
zone. The trial ascertained an average yield of 800 barrels per
CNOOC's new discovery in the Lufeng 15-1 structure has prompted
intensive oil and gas exploratory operation in the area. It has
also enabled further growth of independent activities by other
companies in the Pearl River Mouth Basin.
CNOOC has made significant exploration developments during the
first half of 2012, mainly through a mid to large sized new oil
discovery and successful appraisal of a large oilfield in Bohai.
CNOOC also expects 4 new projects to come online in offshore China
in 2012. Based on the company's rich resource base, CNOOC has
created a solid foundation for future growth.
Management remains optimistic on the company's performance, which
is reflected through its premium assets portfolio, excellent
execution strategy, unique position as a pure oil play and
potential transactions in the merger and acquisition space.
Recently, CNOOC cut a deal to purchase Canadian energy producer
) for approximately $15.1 billion in cash. The deal signifies the
country's biggest foreign takeover so far.
We maintain our long-term Neutral rating on CNOOC ADRs. The company
currently holds a Zacks #3 Rank, equivalent to a short-term Hold