Source: Financial Services Association Author: Feng Yi

CNOOC's AH shares rose sharply, all reaching record highs.

By the close, CNOOC H shares reported HK$17.96 per share, with a cumulative increase of nearly 40% during the year. As a comparison, the Hong Kong stock market was very hot before$CHINA SHENHUA (01088.HK)$The highest during the year was only a cumulative increase of about 22%.

According to the news, CNOOC recently continued to be favorable in terms of exploration, which has stimulated the market's optimism about its future growth. On March 8, the company announced that it had discovered the Kaiping South 100 million ton oil field in deep water in the South China Sea.

Earlier, CNOOC just announced on February 25 that its billion-ton oilfield Bozhong 26-6 Oilfield had a record high test capacity, adding more than 40 million cubic meters of reserves, driving the field's cumulative proven geological reserves to exceed 200 million cubic meters, making it the largest metamorphic rock oil field in the world.

On the other hand, OPEC+ announced this week that it had reached an agreement to extend the production reduction plan until the second quarter. International oil prices are strong in the short term, and futures prices have been rising for two consecutive months, which is also fueling the oil and gas stock market.

However, short-term capital was able to keep up with such a firm rise, thanks also to the fact that CNOOC's dividend level is still higher than the market average.

Sun Ying of Zhongtai Securities pointed out in an earlier report that CNOOC's dividend payment rate has remained above 40% for the past 7 years, with the exception of 2021. The 2022 AH dividend rate was 15.1% and 13.0%, respectively.

It is worth noting that according to the “Shareholder Dividend Return Plan” disclosed by CNOOC, the company's annual dividend payment ratio is expected to be no less than 40% from 2022 to 2024. Regardless of the company's operating performance, the absolute value of the annual dividend is expected to be no less than HK$0.70 per share from 2022 to 2024, and the company continues to implement a high dividend plan.

And even at the record high of HK$18.14, CNOOC's current guaranteed dividend ratio is 3.87%.

Furthermore, according to CNOOC's latest strategic outlook, the company's net production target for 2024 is 700-720 million barrels of oil equivalent, +3.7% to 6.7% year-on-year. In 2025 and 2026, the company's net production targets are 780-800 and 810-830 million barrels of oil equivalent, respectively.

Continuously rising production targets have also brought about stable expectations of performance growth, further strengthening the certainty of CNOOC's dividends.

Also, according to Occidental Petroleum, which is heavily betting on “stock god” Buffett, the supply and demand situation in the oil market will reverse by the end of 2025.

The reason given by the oil giant is that in the past ten years, less than 50% of the crude oil produced globally has been replenished, and the global inability to update existing crude oil reserves quickly enough will cause the oil market to face a shortage of supply.

According to research by Zhongtai Securities, CNOOC currently has strong oil and gas reserves and resources, and is maintaining a continuous growth trend.

According to the data, the company's reserve CAGR in 2017-2022 was 5.20%, reaching 6.239 billion barrels in 2022. Recently, the life span of reserves has remained around 8-10 years, leading the world. Furthermore, the company's reserve replacement rate has exceeded 100% since 2017.

edit/lambor