2011 Net Profit Hit Another Record High

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Mar 28, 2012, 05:03 ET

HONG KONG, March 28, 2012 /PRNewswire-Asia/ -- CNOOC Limited (the "Company", NYSE: CEO, SEHK: 00883) today announced its annual results for the 12 months ended December 31, 2011.

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In 2011, the Company's average realized oil price amounted to US$109.75 per barrel and its average realized natural gas price reached US$5.15 per thousand cubic feet, representing an increase of 40.8% and 14.7% year-over-year ("yoy"), respectively. Benefiting from the rising realized oil and gas prices, the Company's oil and gas sales revenue reached RMB189.28 billion, up by 29.5% yoy while the net profit again hit a record high of RMB70.26 billion, up by 29.1% yoy.

In this year, the Company's net production reached 331.8 million barrels of oil equivalent (BOE), representing a slight increase of 0.7% yoy, maintaining a steady growth in production. During the year, the Company experienced and overcame various challenges including suspension of production due to the oil spill accident on Penglai 19-3 oilfield which is operated under a production sharing contract.

Within the year, the Company achieved 13 discoveries and successfully appraised 18 oil and gas structures through independent exploration while our partner successfully appraised one oil and gas structure in offshore China. In respect of overseas exploration, we made 3 new discoveries and successfully appraised 2 oil and gas structures. The Company's reserve replacement ratio amounted to 158%. Furthermore, the Company has also strengthened its exploration and research activities in the new regions and new targets and made significant progress in the fields of the lithological traps in Bohai and high-temperature and high-pressure natural gas reservoir in Yinggehai. Meanwhile, deepwater exploration has also been carried out in an orderly manner.

There are 2 new projects that successfully commenced production in 2011 in offshore China where another 16 projects are currently under construction to support the future growth of offshore China.

In 2011, the Company's total capital expenditure reached US$6.42 billion, up by 26.7% yoy, among which US$1.46 billion was spent on exploration, US$3.66 billion on development, and US$1.18 billion on production, representing an increase of 31.1% and 50.8%, and a decrease of 18.0%, respectively.

During the period, attributed to the factors including the increase in the tax payment due to the rising realized oil and gas prices as well as the large increase in raw materials price and service fee, the Company's all-in cost rose 25.0% yoy to US$30.58 per BOE.

Within the year, CNOOC Limited actively implemented its value-driven M&A strategy. Through the acquisition of Tullow's one-third interest in the exploration areas 1, 2 and 3A in Uganda, the Company has successfully extended to the core yet to be developed basin in East Africa. In addition, the Company has further expanded its business in the shale oil and gas sector in the United States, and increased its investment in oil sands in Canada through the acquisition of OPTI Canada Inc. to further bolster the development of unconventional resources.

Mr. Li Fanrong, CEO of the Company commented, "In the year of 2011, we were confronted with unprecedented difficulties. After the oil spill accident occurred on Penglai 19-3 oilfield, we have carried out another thorough safety inspection on offshore production operation, in addition to enhancing HSE management and emergency response capabilities. In the meantime, with focus on reserve and production growth, we have made a number of breakthroughs in exploration, development and overseas business."

In 2011, the Company's basic earnings per share (EPS) reached RMB1.57. The Board of Directors has proposed a year-end dividend of HK$0.28 per share (tax inclusive).

Mr. Wang Yilin, Chairman of the Company commented, "To CNOOC Limited 2011 is not a peaceful year. Under the guidance of the Company's established strategies, we have achieved another record high sales revenue and net profit. We will strive forward in order to create more value for our shareholders and to make a greater contribution to the community."

Notes to Editors:

More information about the Company is available at http://www.cnoocltd.com.

This press release includes "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995, including statements regarding expected future events, business prospectus or financial results. The words "believe", "intend", "expect", "anticipate", "project", "estimate", "plan", "predict" and similar expressions are intended to identify such forward-looking statements. These statements are based on assumptions and analysis made by the Company in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that the Company believes reasonable under the circumstances. However, whether actual results and developments will meet the Company's expectations and predictions depends on a number of risks and uncertainties which could cause the actual results, performance and financial conditions to differ materially from the Company's expectations, including those associated with fluctuations in crude oil and natural gas prices, the exploration or development activities, the capital expenditure requirements, the business strategy, the highly competitive nature of the oil and natural gas industries, the foreign operations, environmental liabilities and compliance requirements, and economic and political conditions in the People's Republic of China. For a description of these and other risks and uncertainties, please see the documents the Company has filed from time to time with the United States Securities and Exchange Commission, including 2010 Annual Report on Form 20-F filed on April 29, 2011.

Consequently, all of the forward-looking statements made in this press release are qualified by these cautionary statements. The Company cannot assure that the actual results or developments anticipated will be realized or, even if substantially realized, that they will have the expected effect on the Company, its business or operations.

For further enquiries, please contact:

Ms. Ding Jianchun
Manager, Media / Public Relations
CNOOC Limited
Tel: +86-10-8452-2973
Fax: +86-10-8452-1441
E-mail: [email protected]

Ms. Zhang Yuxiao
Senior Supervisor, Media/Public Relations
CNOOC Limited
Tel: +86-10-8452-6642
Fax: +86-10-8452-1441
E-mail: [email protected]

Ms. Angela Hui
Ketchum Newscan Public Relations Ltd
Tel: +852-3141-8091
Fax: +852-2510-8199
E-mail: [email protected]

SOURCE CNOOC Limited