Cost Control Measures Achieve Remarkable Results Steady Progress in All Businesses in 1H 2016

HONG KONG, Aug. 24, 2016 /CNW/ -- CNOOC Limited (the "Company", SEHK: 00883, NYSE: CEO,TSX: CNU) today announced its interim results for the six months ended June 30, 2016.

In the first half of the year, all businesses of the Company including exploration and development have made steady progress. Regarding exploration, the Company made six new discoveries and drilled 26 successful appraisal wells. Among which, the Company made six new discoveries and drilled 20 successful appraisal wells in offshore China while it drilled six successful appraisal wells overseas. The four projects scheduled to come on stream for the year have been running smoothly. Of which, Kenli 10-4 oilfield and Panyu 11-5 oilfield have commenced production and the other two new projects are progressing smoothly.  

Benefiting from the effective implementation of cost control and efficiency enhancement, the Company made remarkable achievements in cost saving in the first half of the year, with key cost indicators lowered significantly. The Company's all-in cost was US$34.86 per barrel of oil equivalent (BOE), a decrease of 15.5% year-on-year (yoy). Of which, operating cost decreased by 22.7% yoy to US$7.42 per BOE and recorded a decrease yoy for both offshore China and overseas operations.

During the period, the Company's total net oil and gas production reached 241.5 million BOE, representing an increase of 0.6% yoy. Net production from offshore China was 160.1 million BOE, with an increase of 2.4% yoy, mainly attributable to the newly commenced projects in Bohai and Western South China Sea. Net production from overseas decreased by 2.9% to 81.5 million BOE, resulting from the shutdown of the Long Lake project by the impact of the incident.

Impacted by the decline of international oil prices, the Company's average realized oil price was US$37.70 per barrel in the first half of 2016, representing a decline of 34.5% yoy. The average realized natural gas price dropped by 16.2% yoy to US$5.49 per thousand cubic feet, mainly due to the downward adjustment of natural gas prices by the Chinese government in the second half of last year which led to price cuts of some of the gas fields in offshore China. The Company's oil and gas sales revenue were RMB55.08 billion, representing a decline of 28.5% yoy. Net loss was RMB7.74 billion.

Mr. Yang Hua, Chairman and CEO of the Company, said, "In view of the challenges from the external environment, the Company strives to further enhance its industry know-how and introduce innovative work methods and achieved steady progress in all businesses, with the target of cost control and efficiency enhancement. Keeping modest, we will continue to identify areas for improvement and keep on learning, in order to enhance the first-class competitiveness at the international level. We will strengthen, improve and expand the Company to create greater value for our shareholders."   

In the first half of the year, the Company's basic loss per share reached RMB0.17. The Board has declared an interim dividend of HK$0.12 per share (tax inclusive) for 2016.

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 "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify such forward-looking statements. These statements are based on assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors the Company believes are appropriate under the circumstances. However, whether actual results and developments will meet the expectations and predictions of the Company depends on a number of risks and uncertainties which could cause the actual results, performance and financial condition to differ materially from the Company's expectations, including but not limited to those associated with fluctuations in crude oil and natural gas prices, the exploration or development activities, the capital expenditure requirements, the business strategy, whether the transactions entered into by the Group can complete on schedule pursuant to their terms and timetable or at all, 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 files from time to time with the United States Securities and Exchange Commission, including the Annual Report on Form 20-F filed in April of the latest fiscal year.

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

For further enquiries, please contact:

Ms. Michelle Zhang
Deputy Manager, Media / Public Relations
CNOOC Limited
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Ms. Ada Leung
Hill+Knowlton Strategies Asia
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SOURCE CNOOC Limited