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CNOOC (CEO) Provides Capex and Operational Plans for 2019

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CNOOC Limited CEO provided capital expenditure and operational plans for 2019.

For 2019, the company projects net production in the range of 480-490 million barrels of oil equivalent (BOE), up from 475 million barrels in 2018. Of the total production, about 63% will be produced in China and 37% overseas. Estimated net production for 2020 and 2021 are 505-515 million BOE and 535-545 million BOE, respectively. In 2018, the net production is anticipated at about 475 million BOE.

In 2019, six new projects are likely to be commissioned, of which the Egina oilfield in Nigeria and Huizhou 32-5 oil field comprehensive adjustment project/Huizhou 33-1 oil field joint development project in offshore China have initiated production. The other four projects -Appomattox project in the U.S. Gulf of Mexico, Bozhong 34-9 oil field, Caofeidian 11-1/11-6 comprehensive adjustment project and Wenchang 13-2 comprehensive adjustment project in offshore China - will begin production on schedule.

In 2019, the company proposes to drill 173 exploration wells and procure 3D seismic data for about 28 thousand square kilometers.

The company estimates total capital expenditures for 2019 in the range of RMB 70-RMB 80 billion. Of this, about 20%, 59% and 19% will be allocated toward exploration, development and production, respectively. The capex budget marks the highest since 2014 and is up from the projected capital budget of RMB 63 billion in 2018. The decision follows the president's announcement to improve national security by boosting domestic production and reserves. Accordingly, CNOOC's management has approved plans to increase spending on exploration.

In 2019, the company intends to allocate about RMB 12 billion or 76% of total exploration spending for domestic drilling, while the remaining 24% will be used for overseas work. Exploratory drilling budget of RMB 12 billion is up from 2018 budget of RMB 10 billion. Also, the figure increased twofold from the budget of 2016.

Internationally, CNOOC will accelerate spending on the Stabroek block offshore Guyana, where a massive recoverable reserve of 5 billion barrels of oil equivalent was discovered by a Exxon Mobil Corporation XOM -led consortium.

Zacks Rank & Stocks to Consider

CNOOC currently carries a Zacks Rank #4 (Sell).

A few better-ranked players in the energy space are Sunoco L.P SUN and TransCanada Corporation TRP , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Headquartered in Houston, TX, Sunoco operates as a wholesale fuel distributor. The company is expected to witness year-over-year earnings decline of 38.9% in 2018.

Calgary, Alberta-based TransCanada Corporation (TRP) is a premier energy infrastructure provider in North America. The company generated average positive surprise of 19.1% in the trailing four quarters.

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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.

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