CNOOC Sees 51% Increase in YOY Profit

- CNOOC Sees 51% Increase in YOY Profit

Wednesday, August 24, 2011
CNOOC Ltd.

CNOOC announced its interim results as of June 30, 2011.

The Company's total net oil and gas production amounted to 168.7 million barrels of oil equivalent (BOE), representing an increase of 12.9% year-on-year (YOY). This is mainly attributed to: firstly, the new oilfields and development wells which continued to introduce new momentum to the Company's production; secondly, production contributions from newly acquired projects since 2010; and thirdly, the composite decline rate of producing oil and gas fields which has remained low through comprehensive adjustment measures.

Meanwhile, international oil prices fluctuated sharply, although generally, it sustained at a high level. Having benefited from this, the Company's realized oil price reached US $108.16/barrel, 40.8% higher than that of the same period last year. The Company's realized gas price was US $4.92/mcf, increasing 15.5% YOY.

Due to stable oil and gas production growth, as well as higher realized prices, the Company's oil and gas sales revenue for the first half of the year surged 45.0% YOY to RMB97.03 billion. Despite escalating prices of oilfield services and raw materials, the Company's production cost has remained at a low level mainly due to cost savings and efficiency enhancement. The seasonality factor has also lowered the production cost. During the first half of 2011, our operating cost was down 3.8% from 2010 average of US $7.28 to US $7.00 per barrel. The Company recorded net profit of RMB39.34 billion ($5.06B), representing a significant increase of 51.4% YOY.

In the area of exploration, the Company made 6 new discoveries and 18 successful appraisal wells. The first commercial discovery of Wushi 17-2 was made in Wushi Sag in the Western South China Sea. In terms of rolling exploration, two new discoveries Qinhuangdao 33-2 and Qinhuangdao 33-3 were made following the discovery of Qinhuangdao 33-1 South last year in the Shijiutuo uplift area.

Since the beginning of the year, the Company has further expanded its investments in shale oil and gas play and oil sands of North America, through the acquisition of a 33.3% interest in Chesapeake's Niobrara project and the acquisition of OPTI Canada Inc. In addition, we successfully acquired a one-third interest held by Tullow Oil in each of Exploration Areas 1, 2 and 3A in Uganda.

The Company has kept a good track record on health, safety and environmental protection (HSE) since established more than a decade ago. However, the oil spill incident of Penglai 19-3, an oilfield operated under production sharing contract in Bohai Bay, posed HSE challenges to the Company. This incident has made certain impact on the marine environment. Being a responsible energy company, we will continue to urge and assist ConocoPhillips China Inc., the operator of the Penglai 19-3 oilfield, to complete the cleanup work in a timely manner and to minimize the impact on the marine environment.

In addition, due to the combination of the progress of acquisition project and the impact from the oil spill incident, we reset the Company's annual production target at 331-341 million BOE.

Mr. Wang Yilin, Chairman of the Company said, "The outstanding results for the first half of 2011 demonstrated our operating and management capabilities. At the same time, we faced a challenge posed by the oil spill incident occurred at Penglai 19-3 oilfield and we felt deeply sorry about it. The Company has already started performing inspection on the major facilities, equipments and production operations of all our oilfields, and reinforcing our risk management measures, to avoid similar incidents happening in the future."

Mr. Yang Hua, Chief Executive Officer of the Company commented, "Since the beginning of the year, the Company has increased its investments in unconventional energy through the acquisition of shale oil and gas and oil sands projects, building an important resource base for the future. Year 2011 is a year of steady growth for the Company. In the second half of the year, the Company will continue to progress steadily to lay a solid foundation for the Company's long term development."

In the first half of the year, the Company's basic earnings per share reached RMB0.88. In order to share our outstanding results with shareholders, the board has declared an interim dividend of HK $ 0.25 per share (tax inclusive).

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Pioneer Drilling Topped Q2 Estimates, Top Line Surged 46.4% YoY

- Pioneer Drilling Topped Q2 Estimates, Top Line Surged 46.4% YoY



Aug 4, 2011

Pioneer Drilling (AMEX:PDC) reported Q2 EPS of $0.07, ahead of consensus estimates of $0.04 per share. Revenues for the quarter rose 46.4% year-over-year to $171.3 million, topping consensus estimates of $166.0 million.

William Locke, President and CEO of Pioneer Drilling said, "We continue to see strong demand for our drilling rigs in the West Texas drilling division, which has grown from zero to 12 rigs since the beginning of 2011, and we have contracted four more rigs that will begin operating in West Texas by year-end, although day rates are lower in West Texas when compared to certain other regions, putting rigs back to work results in higher utilization rates and increased Adjusted EBITDA."

Pioneer Drilling has a potential upside of 14.3% based on a current price of $15.58 and an average consensus analyst price target of $17.81.

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CGGVeritas Sees 16% Increase in YOY Revenue

- CGGVeritas Sees 16% Increase in YOY Revenue

Friday, July 29, 2011
CGGVeritas

CGGVeritas announced its non-audited second quarter 2011 consolidated results. All comparisons are made on a year-on-year basis unless stated otherwise. All second half 2010 results are reported before restructuring and impairment.

• Group Revenue was $750MM, up 16% year-on-year and 3% sequentially.
• Group Operating Income was $16MM:
• Sercel continued to deliver strong performance with Operating Income at $76MM, a margin of 29%.
• Services Operating Income was a loss of $29MM mainly related to North American seasonality in Land, operational interruptions and continued overcapacity in the marine market.
• Multi-client marine and Processing & Imaging contributions were particularly strong.
• Net Income was negative at $38MM, including one-off $17m refinancing costs.
• Net Free Cash Flow was negative at $7MM this quarter and positive at $58MM for the first half of the year.
• Net Debt to Equity ratio was 40%.
• Debt maturity was extended to 2021 and Term Loan B was fully repaid with the issuance of our $650 million Senior Note.
• As planned in our Performance Program, following their upgrades, the Oceanic Phoenix and Oceanic Endeavour returned to operations. Our ship management partnership with Eidesvik was established and a support vessel charter agreement with Bourbon was signed. The Commander was decommissioned at the end of May.
• BroadSeisTM, our advanced marine solution continued to see growing acceptance, and we further developed our newly established commercial joint ventures.
• Our cost reduction program is progressing well in the context of rising fuel cost and the weakening US dollar.

Backlog as of July 1st sequentially strengthened, up 7% to $1.31 billion.

Post Closing Events

Strategic agreement signed with Spectrum, a Norwegian multi-client company, for the contribution by CGGVeritas of our 2D Multi-client marine library for a consideration in cash and a 25% equity position in Spectrum.

CGGVeritas CEO, Jean-Georges Malcor commented, "During the quarter, Sercel delivered excellent performance and Services, despite the impact of Land seasonality, continued to see the signs of a progressively strengthening second half of the year.

"North American Land activity was seasonally low as we repositioned our crews from Canada and the Arctic to the lower 48 for an expected robust summer campaign. Increasing demand for our marine multi-client data in advance of the announced Gulf of Mexico and Brazil lease sales was confirmed, a promising trend for both future multi-client sales and the progressive balancing of over-capacity in marine.

"Our performance plan is progressing well in a context that remains impacted by rising fuel cost and a weakening US dollar. We continued to manage our balance sheet proactively with the significant extension of debt maturity, and in the first half of the year generated positive net free cash flow.

"Looking forward, we expect Sercel to continue to deliver strong financial performance and, while difficult conditions remain in the marine market, Services should benefit from our performance program and from the increasing demand for multi-client data in the second half of the year and particularly near year-end."

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Platts: China's Oil Demand Up 8% YOY

- Platts: China's Oil Demand Up 8% YOY

Wednesday, June 22, 2011
Platts

China's apparent oil demand in May reached 39.4 million metric tons (mt) or an average of 9.31 million barrels per day (b/d), which was 8% higher year on year, as state-owned enterprises continued to increase output to meet local market supply needs, according to a Platts analysis based on recent statistics released by the Chinese government.

Still, May's apparent oil demand was lower than April's oil demand at 9.37 million b/d. It was also the second consecutive month of single-digit demand growth following the October 2010 to March 2011 period of monthly demand growth in excess of 10%.

"China's crude oil imports and refinery throughput continued to grow last month, albeit at a slower pace," said Calvin Lee, Platts senior writer, China. "More importantly, demand appears to have dropped another notch last month, contributing to rising inventories."

Chinese refiners processed a combined 38.47 million mt of crude oil in May, or an average of 9.1 million b/d, equating to a 7.5% increase year over year.

Tasked by the central government to maintain adequate supplies of refined products in the local markets, domestic refineries continued to run at a rapid pace last month in a bid to prevent any oil shortages in the country. Yet, May's throughput was only marginally higher than April's crude runs at 9.09 million b/d.

With China refineries experiencing very low or negative margins, the Chinese companies are not well motivated to process more crude to meet the potential diesel demand surge, industry consultancy FACTS Global Energy said in a brief earlier this month.

In the meantime, net product imports last month were only 930,000 mt, or an average of 0.21 million b/d. Thus, net imports in May were the lowest this year, reflecting the fact that Chinese companies' appetite for imports has ebbed due to high prices in the global markets.

According to an estimate released earlier this month by the National Development and Reform Commission (NDRC), China's consumption of refined products in May grew 5.2% year on year to 20.19 million mt. But consumption was down 28,000 mt from April.

Coupled with increased production, the May drop in consumption helped to boost inventories and oil product stocks at month’s close were one million mt greater than a year ago, the country's top economic planning agency said in its monthly industry report.

A month ago, NDRC reported that consumption of oil products in April grew at a faster pace of 8.3% year over year to 20.4 million mt. Oil product inventories at the end of April were 450,000 mt more than a year earlier.

In a separate report earlier this month, the NDRC said China's state-owned oil majors Sinopec and PetroChina held in storage by late May more than 13 million mt of refined products, a level which the NDRC termed as a "reasonable level."

"A recent supply crunch appears to have dissipated for now. But it could be a different story if power shortages worsen, forcing industrial users to fall back on diesel power generators, and peak summer demand for transportation fuels cause another tightening in supply," Lee said.

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