Markets
DVN

CNOOC (CEO) Incurs Loss in 1H16; Revenues Decrease Y/Y

An image of a few devices next to a stock chart
Credit: Shutterstock photo

Chinese offshore giant, China National Offshore Oil Corp. or CNOOCCEO , reported net loss of RMB 7.74 billion ($1.2 billion) for the first half of 2016. The company had posted a net income of RMB 14.73 billion ($2.40 billion) in the year-ago period. The downside primarily stemmed from a substantial decline in realized oil prices .

In the first half of 2016, oil and gas sales revenues were RMB 55.08 billion ($8.42 billion), down 38.5% from RMB 89.59 billion ($14.59 billion) in the year-ago period.

Production

CNOOC, which is China's dominant producer of offshore crude oil and natural gas, achieved net production of 241.5 million barrels of oil equivalent (MMBoe), up approximately 0.6% from the year-ago level. The improvement was mainly attributable to the production contribution from newly commenced projects in Bohai and the Western South China Sea. Production from offshore China inched up 2.4% to 160.1 MMBoe, whereas production from overseas dipped 2.9% to 81.5 MMBoe, both on a year-over-year basis. In the reported period, production percentage in China and overseas was 66% and 34%, respectively.

Price Realizations

The company's average realized oil price plunged 34.5% year over year to $37.70 per barrel. Realized gas price decreased 16.2% from the year-ago level to $5.49 per thousand cubic feet. This was mainly due to the downward adjustment of natural gas prices by the Chinese government in the second half of 2015, which led to price cuts of some of the gas fields in offshore China.

CNOOC LTD ADR Price, Consensus and EPS Surprise

CNOOC LTD ADR Price, Consensus and EPS Surprise | CNOOC LTD ADR Quote

Expenses

In the reported period, operating expenses of $7.42 Boe declined 22.7% year over year. The company's all-in cost was $34.86 per Boe, down 15.5% year over year. This was primarily due to effective cost control.

Other News

During the first half of 2016, CNOOC made six new discoveries and drilled 26 successful appraisal wells. Of these, six new discoveries and 20 successful appraisal wells were spud in offshore China and six successful appraisal wells were drilled overseas. Out of the four projects scheduled to be commissioned in the year, Kenli 10-4 oilfield and Panyu 11-5 oilfield have already started production. The other two new projects are also progressing smoothly.

Zacks Rank

The company currently carries a Zacks Rank #4 (Sell). Some better-ranked players from the energy sector are Devon Energy Corporation DVN , NGL Energy Partners LP NGL and Enbridge Energy Partners L.P. EEP . All these stocks sport a Zacks Rank #1 (Strong Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days . Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

CNOOC LTD ADR (CEO): Free Stock Analysis Report

ENBRIDGE EGY PT (EEP): Free Stock Analysis Report

DEVON ENERGY (DVN): Free Stock Analysis Report

NGL ENERGY PART (NGL): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

DVN NGL CEO

Other Topics

Stocks