occurrences

CNOOC released its report for the third quarter of '24. The company achieved operating income of 326.024 billion yuan in Q1-Q3, up 6.3% from last year; net profit attributable to shareholders of listed companies was 116.659 billion yuan, an increase of 19.5% over the previous year, with basic earnings of 2.45 yuan per share. Q3 achieved revenue of 99.254 billion yuan in a single quarter, down 13.5% year on year, and net profit to mother of 36.928 billion yuan, an increase of 9% year on year.

Increased storage and production continued to bear fruit

The company achieved oil and gas sales revenue of RMB 271.43 billion, up 13.9% year-on-year, mainly due to the combined effects of increased sales, price increases, and exchange rate changes. In the first three quarters of 2024, the Suizhong 36-1/Luda 5-2 oilfield adjustment and development project, the Shenhai-1 Phase II natural gas development project, and the Bozhong 19-2 oilfield development project were successfully put into operation. Other new projects are progressing steadily.

Net oil and gas production in the first three quarters reached 542.1 million barrels of oil equivalent, up 8.5% year on year. Oil and gas production in the third quarter was 179.6 million barrels of oil equivalent, up 7% year on year. By region, China's net production was 369.2 million barrels of oil equivalent, up 6.8% year on year, mainly due to production contributions from oil and gas fields such as Bozhong 19-6 and Enping 20-4; overseas net production was 172.9 million barrels of oil equivalent, up 12.2% year on year, mainly due to the increase in production brought about by the commissioning of the Payara project in Guyana. In terms of product categories, the first three quarters achieved oil production of 422.4 million barrels, an increase of 8.36% year on year, and natural gas production of 696.5 billion cubic feet, an increase of 8.95% year on year.

The company continued to increase storage and production. In the first three quarters of 2024, the company obtained a total of 9 new discoveries and successfully evaluated 23 oil and gas structures. In the third quarter, the company obtained a total of 2 new discoveries and successfully evaluated 5 oil and gas structures. Among them, the Chinese sea area was newly discovered 10-3 east of Wenchang, showing good prospects for medium- to deep natural gas exploration in the western Pearl River estuary basin; it also successfully evaluated Caofeidian 23-6. The scale of reserves continues to expand, and it is expected to become a large and medium-sized oil field.

The cost of barrel oil is well controlled, and the capital expenditure is in line with expectations

In the first three quarters, international oil prices surged and fell. The average price of Brent crude oil futures was 81.82 US dollars/barrel, which was basically the same as the previous year. The company achieved an average oil price of 79.03 US dollars/barrel in the first three quarters, up 2.9% year on year, and the average realized gas price was 7.78 US dollars/thousand cubic feet, down 1.8% year on year. The main cost of barrel oil is well controlled. The main cost of barrel oil in the first three quarters was $28.14, slightly higher than in the first half of the year, and was basically the same as in the previous year. The company's capital expenditure was approximately RMB 95.34 billion, an increase of 6.6% over the previous year. The 2024 budget capital expenditure was 125-135 billion yuan.

Company profit forecast and investment rating: Due to changes in oil and gas prices, we adjusted the company's net profit for 24-26 to 145.9/155/163.6 billion yuan (previous values were 1,492, 1551, 1636), and EPS was 3.07/3.26/3.44 yuan, respectively. Maintain a “buy” rating.

Risk warning: risk of large fluctuations in oil prices, risk of resource exploration and production progress falling short of expectations, risk of exchange rate fluctuations