CNOOC Sees Net Profit More Than Double in 2018 as Prices Climb, Costs Fall

CNOOC's annual oil and gas revenue rose 22.4 percent in 2018 while its net profit more than doubled.

Author: Lucas Hahn   

CNOOC Ltd. (NYSE:CEO), China's giant state-owned energy company, reported that its net profit last year rose 113.5 percent compared with the year before to 52.7 billion yuan ($7.87 billion).

The income, equal to 1.18 yuan (18 cents) per share, came as its oil and gas revenue rose 22.4 percent year-over-year to 185.9 billion yuan ($27.8 billion) in 2018.  

The higher results came as CNOOC, also known as China National Offshore Oil Corp., said it met its annual production target, producing 475 million barrels of oil equivalent (BOE), an increase of 1 percent for the year.

"In 2018, facing the complex external environment, CNOOC Limited focused on high-quality development, and maintained strong cost competitiveness," said CNOOC's chairman Yang Hua.

The improvement to profit was primarily the result of CNOOC's average production cost per BOE continuing to decrease, falling 6.6 percent year-over-year to $30.39 per barrel in 2018.

CNOOC was also helped by a rise in oil and gas prices in 2018. The company sold oil at an average price of $67.22 per barrel in 2018, up 27.7 percent year-over-year. CNOOC sold natural gas at an average price of $6.41 per thousand cubic feet in 2018, up 9.8 percent from 2017.

At the same time, capital expenditures at the company rose 24.9 percent to 62.6 billion yuan ($9.34 billion) in 2018. 

During the year, CNOOC reported 17 discoveries and appraised 17 projects. Its net proven reserves, the amount of oil and gas it can extract while earning a profit, rose 2.47 percent to 4.96 billion BOE as of Dec. 31.

CNOOC also announced that it will increase its annual dividend 33 percent to HK$0.40 (5 cents) in 2018.

CNOOC stock closed in New York at $180.12 per share on Thursday, up $1.44. The stock is up 23.6 percent year-to-date.