CNOOC's profit for the first quarter of 2014 increases on higher oil prices and output growth

CNOOC Ltd. posted a 7.1% increase in its first-quarter net profits on Tuesday, as the Iran War?pushed up global oil prices. The offshore oil and natural gas major also increased production.

According to a filing made at the Hong Kong Stock Exchange, the net income for January-March was 39.14 billion Yuan ($5.73billion), up from 36.56 billion Yuan a year ago.

Revenue increased?8.6%, to 116.08 Billion Yuan.

CNOOC Ltd., the listed subsidiary of China National Offshore Oil Company (CNOOC),?reported a total net production of 205.1 million barrels equivalent to oil (boe) for the first quarter. This was up by?8.6% compared to a year ago, and production increased from both domestic as well as overseas operations.

The domestic net production reached 140 million boe in 2016, a 7% increase on the previous year. Projects such as Kenli 10-2, located off the coast of?north China, contributed to this.

The net production overseas was 65.1 million boe. This is a 12.3% increase on the previous year, mostly due to projects like Yellowtail in Guyana.

Unaudited sales of oil and gas by the company were 97 billion yuan. This is an increase of 9.9% on a year-on-year basis.

CNOOC reported that its production costs in the first quarter were $28.41 per barrel, up from $27 for the whole year 2025.

The first-quarter capital expenditure was 33.02 billion Yuan, an increase of 19.1% on the previous year, due to accelerated deployment and capacity construction.

According to Fitch Ratings, CNOOC’s average selling price of?oil? and?gas? will be supported by geopolitical tensions in the near term and disruptions to global supply, while Iran's?conflict? is unlikely to impact its production.

Fitch Ratings Associate Director Betsy Guo said that CNOOC's foreign business represents 35% of the company's oil and gas assets, and 31% in sales, with Canada as its largest contributor. Middle East exposure is limited.

CNOOC shares listed in Hong Kong have gained 36.06% this year, beating the Hang Seng Index's gain of 0.19%. $1 = 6.8356 Chinese Yuan Renminbi (Reporting and editing by Joe Bavier; Aizhu chen, Sam Li)

(source: Reuters)