United Energy (“UEG” or Group) announced its results for the first half of this year. Its net profit and earnings per share increased by 145.7% and 141.3% year-on-year respectively to HK$525.6 million and HK$0.0403. Its performance is in line with our expectations, and as the Group's oil field project production in Pakistan continues to rise, it is believed that the Group can achieve annual net profit of HK$1,302.2 billion and profit per share of HK$0.1010. The Group's half-year revenue of 2,347.6 million (up 66% year over year) is also in line with our expectations. The average daily output increased 43% year on year to 35,472 barrels of oil equivalent. The increase in oil equivalent production was mainly driven by the Group's oil and gas field in Pakistan. The output of this project increased 43.9% year on year to 33,862 barrels of oil equivalent. The rest of the increase comes from the Group's share of crude oil recovery (EOR) in Liaohe, China. With the completion of a major maintenance and upgrade project in September 2013, production is expected to increase further in the second half of this year. The share of oil in production increased, leading to an increase in average price and gross margin. As the Group extracted more oil from oil fields, its average price increased 17.5% year over year. The increase in production raised the Group's operating profit level and nearly doubled the gross margin to 52.1%. In the future, profit margins are expected to begin to decline slightly as new gas projects will gradually reduce average prices. The collection of newly discovered resources will continue to drive total reserves in the MKK region. United Energy discovered a total of 8 new oil and gas resource blocks in the first half of this year, including major natural gas discoveries at Naimat West-1. Although relevant measurements and evaluations are still ongoing, it is initially estimated that its proven reserves have reached 13.27 million oil equivalent, which means that the Group's 1P reserves may increase by 35.6%. The valuation is based on a discounted cash flow model. We maintain a target price of HK$1.59 per share and “buy”