CNOOC DOWN 56%
Cnooc Ltd., China's biggest offshore oil and gas explorer, posted a 56 percent decline in profit for the first half of this year.
Net income dropped to 14.73 billion yuan ($2.3 billion), or 0.33 yuan a share, from 33.59 billion yuan, or 0.75 yuan, a year earlier, the Beijing-based explorer said in a statement to the Hong Kong stock exchange Wednesday. That exceeded the 13.9-billion yuan average of three analyst estimates compiled by Bloomberg.
Cnooc, which depends purely on oil exploration and production for revenue, is most exposed to oil's plunge this year and must rely on cost cuts and capital spending curbs to boost profit, said Laban Yu, a Hong Kong-based analyst at Jefferies Group LLC. The strategy paid off last year, when it posted a surprise 6.6 percent profit increase. Brent crude has averaged about $59 a barrel in the first half of the year, down 45 percent from the same period in 2014. The benchmark for half of the world's oil this month slipped below $45 for the first time since 2009.
"There isn't much Cnooc can do to improve earnings prospects in the second half if crude prices fail to rebound," Yu said before the earnings was released.
Net production in the period rose 14 percent to 240 million barrels of oil equivalent.
"The development of the Company in the future will be driven by both production and economic efficiency instead of only by production volume," Chairman Yang Hua said in the statement. "We will emphasize economic production volume rather than focus solely on production growth."
Cnooc's oil and gas sales fell to 77 billion yuan in the first six months from 117 billion yuan a year ago.
Cnooc plans to increase production by as much as 15 percent this year, while cutting capital expenditure by as much as 35 percent to 70 billion yuan, the explorer said in February. The company in April reiterated its output target for this year of 475 million to 495 million barrels of oil equivalent this year, despite the plunge in crude prices.
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Libya’s oil production increased steeply to the current level of 850,000 b/d from a low point in August 2016 of below 300,000 b/d. Production surpassed 1 million b/d in July.
- Revenue of $7.9 billion increased 6% sequentially - Pretax operating income of $1.1 billion increased 11% sequentially - GAAP EPS, including Cameron integration-related charges of $0.03 per share, was $0.39 - EPS, excluding Cameron integration-related charges, was $0.42 - Cash flow from operations was $1.9 billion; free cash flow was $1.1 billion
“The combination of GE Oil & Gas and Baker Hughes closed on July 3, and we are pleased with our progress during our first operating quarter. Despite the continuing challenging environment, we delivered solid orders growth and secured important wins from customers, advanced existing projects and enhanced our technology offerings in the quarter. We also achieved key integration milestones and made significant progress working as a combined company. I am now more convinced than ever that we combined the right companies at the right time,” said Lorenzo Simonelli, BHGE chairman and chief executive officer.
U.S. Rig Count is up 360 rigs from last year's count of 553, with oil rigs up 293, gas rigs up 69, and miscellaneous rigs down 2 to 2. Canada Rig Count is up 59 rigs from last year's count of 143, with oil rigs up 38 and gas rigs up 21.