(Incorporated in Bermuda with limited liability) （於百慕達註冊成立之有限公司） （Stock Code 股份代號：00346） NOTIFICATION LETTER 通知信函 Dear Non-Registered Shareholders, Yanchang Petroleum International Limited (the "Company") – Notice of publication of Interim Report 2025 (the "Current Corporate Communication") The English and Chinese versions of the Company's Current Corporate Communications are available on the Company's website at www.yanchanginternational.com and the website of The Stock Exchange of Hong Kong Limited (the " ...

(Incorporated in Bermuda with limited liability) （於百慕達註冊成立之有限公司） Yanchang Petroleum International Limited (the "Company") – Notice of publication of Interim Report 2025 (the "Current Corporate Communication") The English and Chinese versions of the Company's Current Corporate Communications are now available on the Company's website at www.yanchanginternational.com and the website of The Stock Exchange of Hong Kong Limited (the "Stock Exchange") at www.hkexnews.hk respectively (the "Website Version"). The C ...

Financial Performance - Revenue for the six months ended June 30, 2025, was HKD 9,994,518, a decrease of 40.5% compared to HKD 16,771,559 for the same period in 2024[4] - The company reported a loss attributable to owners of the company of HKD 28,537, compared to a loss of HKD 27,018 in the prior year[5] - For the six months ended June 30, 2025, the company reported a net loss of HKD 28,537,000, compared to a net loss of HKD 27,018,000 for the same period in 2024[10] - The operating loss for the six months ended June 30, 2025, was HKD 10,451,000, compared to a loss of HKD 10,180,000 in the same period of 2024[30] - The company reported a decrease in accumulated losses to HKD 7,545,575,000 as of June 30, 2025, from HKD 7,596,941,000 at the beginning of the period[10] - The company reported a foreign exchange gain of HKD 76,831 for the period, compared to a loss of HKD 37,621 in the previous year[5] - The total comprehensive income for the period was HKD 48,984, compared to a loss of HKD 64,887 in the previous year[5] Assets and Liabilities - Non-current assets increased to HKD 1,990,953 as of June 30, 2025, from HKD 1,926,237 as of December 31, 2024[7] - Current assets rose to HKD 924,012, up from HKD 873,762 at the end of 2024[7] - Total liabilities increased to HKD 1,565,802 as of June 30, 2025, compared to HKD 1,499,820 at the end of 2024[8] - The total assets as of June 30, 2025, amounted to HKD 2,914,965,000, an increase from HKD 2,799,999,000 as of December 31, 2024[21] - The company's cash and bank balances decreased to HKD 240,015 from HKD 278,675[7] - The company had cash and cash equivalents of HKD 240,015,000 at the end of the period, down from HKD 256,887,000 at the end of June 2024[11] - The overdue accounts receivable over 90 days increased significantly to HKD 50,072,000 as of June 30, 2025, compared to HKD 22,455,000 as of December 31, 2024, representing a 123.5% increase[52] Cash Flow and Expenditures - Cash flow from operating activities showed a net outflow of HKD 158,023,000, a significant decrease from a net inflow of HKD 204,078,000 in the previous year[11] - The company incurred capital expenditures of HKD 1,184,000 for property, plant, and equipment, compared to HKD 22,034,000 in the previous year[11] - The company’s management compensation increased to HKD 8,857,000 for the six months ended June 30, 2025, compared to HKD 7,476,000 in the same period of 2024[76] Shareholder Information - The company did not recommend any interim dividend for the six months ended June 30, 2025, consistent with the previous year[35] - The board of directors did not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the previous year[135] - As of June 30, 2025, the major shareholder, 延长石油集团, held 634,310,161 shares, representing 57.66% of the total issued ordinary shares[142] Operational Highlights - Average daily production in Canada was 1,216 barrels of oil and 2,250 thousand cubic feet of gas, with a total net production of 263,000 barrels of oil equivalent, representing a 37% year-on-year decrease[85][80] - The group achieved natural gas sales of 58,700 equivalent barrels, reaching 97% of its target despite challenges from third-party pipeline pressures[86] - The company is focusing on fine management of oil fields to enhance economic efficiency and has implemented 52 various production enhancement measures, increasing daily production by 103 barrels[89] - Novus achieved oil and gas sales volume of 263,010 equivalent barrels, generating revenue of HKD 94,132,000, a decrease from 456,989 equivalent barrels and HKD 189,103,000 in the same period last year, representing a decline of approximately 42.5% in sales volume and 50% in revenue[101] Compliance and Governance - The audit committee, composed of three independent non-executive directors, reviewed the accounting principles and policies adopted by the company for the six months ended June 30, 2025[148] - The company has no significant contingent liabilities as of June 30, 2025[74] - The company has adopted new or revised Hong Kong Financial Reporting Standards, which did not have a significant impact on the financial results for the current or prior periods[15]

Core Viewpoint - Hong Kong oil stocks collectively declined, with significant drops observed in major companies ahead of the upcoming OPEC+ meeting, where an increase in production targets is anticipated [1] Group 1: Stock Performance - CNOOC Services (02883) fell by 3.27% to 6.800 - Yanchang Petroleum (00346) decreased by 2.33% to 0.420 - Sinopec (00386) dropped by 2.22% to 4.100 - PetroChina (00857) declined by 1.55% to 7.620 - Shanghai Petrochemical (00338) fell by 1.53% to 1.290 - CNOOC (00883) decreased by 1.36% to 19.600 [1] Group 2: Market Context - Investors and traders are focusing on the OPEC+ meeting this weekend, with expectations of a potential increase in production targets [1] - Oil prices declined on Thursday, continuing a previous drop of over 2% [1] - Analysts suggest that OPEC+ is seeking to regain market share, which may lead to a production increase in October [1]

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年8月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 延長石油國際有限公司 呈交日期: 2025年9月1日 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | 於香港聯交所上市 (註1) | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 00346 | 說明 | 普通股 | | | | | | | | 已發行股份（不包括庫存股份）數目 | | 庫存股份數目 | | 已發行股份總數 | | | 上月底結存 | | | 1,100,102,803 | | 0 | | 1,100,102,803 | | 增加 / 減少 (-) | | | 0 | | | | | | 本月底結存 | | | 1,100,102,803 | | 0 | | 1,100,102,803 | 第 2 頁 共 10 頁 v 1.1.1 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 ...

Group 1 - The company reported a revenue of HKD 9.995 billion for the mid-year of 2025, a decrease from HKD 16.77 billion in the same period last year [1] - The company incurred a loss of HKD 27.85 million during the period, compared to a loss of HKD 27.266 million in the previous year [1]

Core Viewpoint - 延长石油国际 reported a significant decline in revenue and an increase in losses for the mid-year results of 2025, indicating financial challenges faced by the company [1] Financial Performance - Revenue for the period was HKD 9.995 billion, representing a year-on-year decrease of 40.4% [1] - The loss attributable to shareholders was HKD 28.537 million, which is an increase of 5.6% compared to the previous year [1] - Basic loss per share was HKD 0.0259 [1]

Group 1 - The core point of the article is that 延长石油国际 (00346) reported a significant decline in revenue and an increase in losses for the mid-year results of 2025 [1] - The company's revenue for the period was HKD 9.995 billion, representing a year-on-year decrease of 40.4% [1] - The loss attributable to the company's owners was HKD 28.537 million, which expanded by 5.6% compared to the previous year [1] - The basic loss per share was reported at HKD 0.0259 [1]

[Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=1&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) [Summary](index=1&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income-Summary) The Group reported a loss of HKD 27,847 thousand, with total revenue decreasing by 40.41% to HKD 9,994,518 thousand, despite reduced operating expenses | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | Change (HKD thousands) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 9,994,518 | 16,771,559 | (6,777,041) | -40.41% | | **Other Income** | 3,560 | 5,482 | (1,922) | -35.06% | | **Total Revenue and Other Income** | 9,998,078 | 16,777,041 | (6,778,963) | -40.41% | | **Total Expenses** | (10,008,529) | (16,787,221) | 6,778,692 | -40.38% | | **Operating Loss** | (10,451) | (10,180) | (271) | -2.66% | | **Finance Costs** | (18,166) | (17,949) | (217) | -1.21% | | **Loss Before Tax** | (28,617) | (28,129) | (488) | -1.73% | | **Taxation** | 770 | 863 | (93) | -10.78% | | **Loss for the Period** | (27,847) | (27,266) | (581) | -2.13% | | **Loss for the Period Attributable to Owners of the Company** | (28,537) | (27,018) | (1,519) | -5.62% | | **Basic and Diluted Loss Per Share (HK cents)** | (2.59) | (2.46) | (0.13) | -5.28% | - **Exchange differences** in other comprehensive income improved from a **HKD 37,621 thousand loss** in 2024 to a **HKD 76,831 thousand gain** in 2025, boosting total comprehensive income[3](index=3&type=chunk) [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) [Summary](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position-Summary) Total assets increased to HKD 2,914,965 thousand, while net current liabilities shifted to HKD 216,900 thousand, indicating increased liquidity pressure | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (HKD thousands) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | **Non-current Assets** | 1,990,953 | 1,926,237 | 64,716 | 3.36% | | **Current Assets** | 924,012 | 873,762 | 50,250 | 5.75% | | **Total Assets** | 2,914,965 | 2,799,999 | 114,966 | 4.11% | | **Total Equity Attributable to Owners of the Company** | 1,294,711 | 1,247,955 | 46,756 | 3.75% | | **Non-controlling Interests** | 54,452 | 52,224 | 2,228 | 4.27% | | **Total Equity** | 1,349,163 | 1,300,179 | 48,984 | 3.77% | | **Current Liabilities** | 1,140,912 | 816,878 | 324,034 | 39.67% | | **Non-current Liabilities** | 424,890 | 682,942 | (258,052) | -37.79% | | **Total Liabilities** | 1,565,802 | 1,499,820 | 65,982 | 4.40% | | **Net Current (Liabilities)/Assets** | (216,900) | 56,884 | (273,784) | -481.39% | [Notes to the Financial Statements](index=5&type=section&id=Notes%20to%20the%20Financial%20Statements) [1. Basis of Preparation](index=5&type=section&id=1.%20Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in HKD, adhering to HKAS 34 and Listing Rules Appendix 16, with figures rounded to the nearest thousand - Statements are prepared in accordance with **HKAS 34** and **Listing Rules Appendix 16**, presented in **HKD**, with figures rounded to the nearest thousand[6](index=6&type=chunk)[7](index=7&type=chunk) [2. Principal Accounting Policies](index=5&type=section&id=2.%20Principal%20Accounting%20Policies) Financial statements are prepared on a historical cost basis, with some assets at fair value; new HKAS 21 amendment had no material impact - Statements are prepared on a **historical cost basis**, with some assets measured at **fair value**[8](index=8&type=chunk) - First application of **HKAS 21 (Amendment) — Lack of Exchangeability** had **no significant impact**[8](index=8&type=chunk) - New or revised **HKFRSs** effective in the future but not yet adopted are listed, including **HKFRS 18**[9](index=9&type=chunk) [3. Segment Information](index=6&type=section&id=3.%20Segment%20Information) The Group operates in Canadian oil and gas (turned to loss) and China oil products trading (turned to profit), with revenue highly dependent on key customers - The Group operates in two segments: **Exploration, Development and Production (Oil and Gas)** and **Supply and Procurement (Oil Products Trading)**[10](index=10&type=chunk)[12](index=12&type=chunk) Segment Revenue and Results (For the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | Change (HKD thousands) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | **Exploration, Development and Production** | | | | | | Sales to External Customers | 94,132 | 189,103 | (94,971) | -50.22% | | Segment (Loss)/Profit | (34,261) | 7,932 | (42,193) | -531.93% | | **Supply and Procurement** | | | | | | Sales to External Customers | 9,900,386 | 16,582,456 | (6,682,070) | -40.29% | | Segment (Loss)/Profit | 2,368 | (1,597) | 3,965 | 248.28% | | **Consolidated** | | | | | | Sales to External Customers | 9,994,518 | 16,771,559 | (6,777,041) | -40.41% | | Operating Loss | (10,451) | (10,180) | (271) | -2.66% | | Loss for the Period | (27,847) | (27,266) | (581) | -2.13% | [3.1 Segment Revenue and Results](index=6&type=section&id=3.1%20Segment%20Revenue%20and%20Results) Exploration, Development and Production revenue decreased 50.22%, turning to a HKD 34,261 thousand loss, while Supply and Procurement revenue decreased 40.29%, turning to a HKD 2,368 thousand profit - **Exploration, Development and Production** revenue decreased by **50.22%**, turning from a **HKD 7,932 thousand profit** to a **HKD 34,261 thousand loss**[11](index=11&type=chunk) - **Supply and Procurement** revenue decreased by **40.29%**, but turned from a **HKD 1,597 thousand loss** to a **HKD 2,368 thousand profit**[11](index=11&type=chunk) [3.2 Segment Assets and Liabilities](index=7&type=section&id=3.2%20Segment%20Assets%20and%20Liabilities) Both assets and liabilities increased for the Exploration, Development and Production and Supply and Procurement segments, reflecting structural changes Segment Assets and Liabilities (As of June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | Change (HKD thousands) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | **Segment Assets** | | | | | | Exploration, Development and Production | 1,794,116 | 1,741,246 | 52,870 | 3.04% | | Supply and Procurement | 1,099,728 | 1,033,640 | 66,088 | 6.40% | | **Segment Liabilities** | | | | | | Exploration, Development and Production | 507,016 | 497,991 | 9,025 | 1.81% | | Supply and Procurement | 877,153 | 819,523 | 57,630 | 7.03% | [3.3 Information about Major Customers](index=7&type=section&id=3.3%20Information%20about%20Major%20Customers) Supply and Procurement revenue is highly concentrated, with Customers A and B contributing most in H1 2025, while Customer C had no contribution - In the first half of 2025, two major customers contributed **HKD 6,759,787 thousand** to **Supply and Procurement** revenue[15](index=15&type=chunk) Revenue from Major Customers (For the six months ended June 30) | Customer | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | A Customer | 5,628,444 | 8,679,176 | | B Customer | 1,131,343 | – | | C Customer | – | 3,772,969 | [4. Revenue and Other Income](index=8&type=section&id=4.%20Revenue%20and%20Other%20Income) Total revenue decreased by 40.41% to HKD 9,994,518 thousand, mainly from reduced petroleum product trading, with other income also declining Revenue and Other Income (For the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | Change (HKD thousands) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | | | | | | Sales of Crude Oil and Natural Gas | 94,132 | 189,103 | (94,971) | -50.22% | | Trading and Distribution of Petroleum-related Products | 9,900,386 | 16,582,456 | (6,682,070) | -40.29% | | **Total Revenue** | 9,994,518 | 16,771,559 | (6,777,041) | -40.41% | | **Other Income** | | | | | | Bank Interest Income | 1,759 | 3,124 | (1,365) | -43.69% | | Rental Income | 634 | 698 | (64) | -9.17% | | Others | 1,167 | 1,660 | (493) | -29.70% | | **Total Other Income** | 3,560 | 5,482 | (1,922) | -35.06% | - Revenue is recognized at a **point in time** in accordance with **HKFRS 15**[18](index=18&type=chunk) [5. Other Gains and Losses](index=8&type=section&id=5.%20Other%20Gains%20and%20Losses) The Group reported a net exchange gain of HKD 24,577 thousand, a significant improvement from the prior year's exchange loss Other Gains and Losses (For the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Net Exchange Gains/(Losses) | 24,577 | (15,219) | 39,796 | | Others | – | (28) | 28 | | **Total** | 24,577 | (15,247) | 39,824 | [6. Items Deducted from Operating Loss](index=9&type=section&id=6.%20Items%20Deducted%20from%20Operating%20Loss) Cost of inventories sold, depreciation, and depletion expenses significantly decreased, while staff costs, including directors' emoluments, increased Items Deducted from Operating Loss (For the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | Change (HKD thousands) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Cost of Inventories Sold | 9,869,666 | 16,547,797 | (6,678,131) | -40.36% | | Depreciation and Depletion Expenses | 59,755 | 96,649 | (36,894) | -38.17% | | Staff Costs | 38,767 | 35,268 | 3,499 | 9.92% | [7. Finance Costs](index=9&type=section&id=7.%20Finance%20Costs) Finance costs slightly increased by 1.21% to HKD 18,166 thousand, driven by new other loan interest, despite lower bank and secured loan interest Finance Costs (For the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | Change (HKD thousands) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Interest Expense on Bank Borrowings and Secured Term Loans | 13,522 | 14,323 | (801) | -5.59% | | Interest Expense on Lease Liabilities | 1,455 | 2,262 | (807) | -35.68% | | Interest Expense on Other Loans | 1,845 | – | 1,845 | N/A | | Accrued Provision for Abandonment Obligations | 1,344 | 1,364 | (20) | -1.47% | | **Total** | 18,166 | 17,949 | 217 | 1.21% | [8. Income Tax in the Consolidated Statement of Profit or Loss](index=9&type=section&id=8.%20Income%20Tax%20in%20the%20Consolidated%20Statement%20of%20Profit%20or%20Loss) The Group recorded a HKD 770 thousand tax credit, mainly from an over-provision of China enterprise income tax, partially offset by Hong Kong profits tax under-provision - **Tax credit** of **HKD 770 thousand** in H1 2025, primarily from an **over-provision of HKD 796 thousand** for China enterprise income tax[23](index=23&type=chunk)[24](index=24&type=chunk) - **Hong Kong profits tax rate** is **16.5%**, while **Canadian and Chinese subsidiaries' tax rates** are both **25%**[23](index=23&type=chunk) [9. Interim Dividend](index=10&type=section&id=9.%20Interim%20Dividend) The Board does not recommend any interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend the payment of an **interim dividend** for H1 2025[25](index=25&type=chunk) [10. Loss Per Share](index=10&type=section&id=10.%20Loss%20Per%20Share) Basic and diluted loss per share attributable to owners of the Company increased to HK cents 2.59, with no dilutive potential ordinary shares Loss Per Share (For the six months ended June 30) | Indicator | 2025 (HK cents) | 2024 (HK cents) | Change (HK cents) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Basic and Diluted Loss Per Share | (2.59) | (2.46) | (0.13) | -5.28% | - Diluted loss per share is the same as basic loss per share due to **no dilutive potential ordinary shares**[28](index=28&type=chunk) [11. Trade Receivables](index=11&type=section&id=11.%20Trade%20Receivables) Total trade receivables increased by 21.78% to HKD 557,460 thousand, with overdue amounts over 90 days significantly rising, yet deemed not credit impaired - Trade receivables generally have a **credit period of up to 90 days** and are **interest-free**[29](index=29&type=chunk) Ageing Analysis of Trade Receivables (As of June 30) | Ageing | 2025 (HKD thousands) | 2024 (HKD thousands) | Change (HKD thousands) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | 0 to 30 Days | 507,147 | 434,230 | 72,917 | 16.79% | | 31 to 60 Days | 175 | 385 | (210) | -54.55% | | 61 to 90 Days | 66 | 688 | (622) | -90.41% | | Over 90 Days | 50,072 | 22,455 | 27,617 | 123.00% | | **Total** | 557,460 | 457,758 | 99,692 | 21.78% | - Overdue but not impaired trade receivables amounted to **HKD 50,072 thousand**, a significant increase from **HKD 22,455 thousand** at the end of 2024[30](index=30&type=chunk)[31](index=31&type=chunk) [12. Trade and Other Payables](index=11&type=section&id=12.%20Trade%20and%20Other%20Payables) Total trade and other payables decreased by 13.01% to HKD 565,613 thousand, mainly due to reduced contract liabilities and VAT payables Trade and Other Payables (As of June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | Change (HKD thousands) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Trade Payables | 438,730 | 468,732 | (30,002) | -6.40% | | Contract Liabilities | 38,178 | 75,965 | (37,787) | -49.74% | | VAT Payables | 58 | 11,059 | (11,001) | -99.48% | | Other Payables | 73,893 | 74,093 | (200) | -0.27% | | **Total** | 565,613 | 650,214 | (84,601) | -13.01% | - **Contract liabilities** primarily represent customer advances, expected to be fully recognized as revenue within one year[32](index=32&type=chunk) - **Trade payables** are **interest-free**, with an average credit period of up to **90 days**[33](index=33&type=chunk) [13. Contingent Liabilities](index=12&type=section&id=13.%20Contingent%20Liabilities) The Group had no significant contingent liabilities as of June 30, 2025, consistent with the prior year-end - The Group had **no significant contingent liabilities** as of June 30, 2025[34](index=34&type=chunk) [14. Significant Related Party Transactions](index=12&type=section&id=14.%20Significant%20Related%20Party%20Transactions) The Group engaged in various related party transactions, mainly for petroleum product procurement and loan interest, with key management personnel compensation increasing by 18.47% Key Management Personnel Compensation (For the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | Change (HKD thousands) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Salaries, Bonuses and Allowances | 8,730 | 7,360 | 1,370 | 18.61% | | Pension Scheme Contributions | 127 | 116 | 11 | 9.48% | | **Total** | 8,857 | 7,476 | 1,381 | 18.47% | Related Party Transactions (For the six months ended June 30) | Relationship | Nature of Transaction | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | :--- | | Ultimate Holding Company | Procurement of Refined Oil and By-products | 3,628,421 | 5,747,594 | | Fellow Subsidiaries | Procurement of Refined Oil and By-products | 78,666 | 1,711,923 | | Fellow Associates | Procurement of Refined Oil and By-products | 450 | 20,091 | | Fellow Associates | Sales of Refined Oil and By-products | – | 27,817 | | Direct Holding Company | Interest Expense on Secured Term Loans | 12,148 | 11,182 | | Ultimate Holding Company | Interest Expense on Other Loans | 1,845 | 2,992 | - Henan YanChang entered into a supply agreement with YanChang Petroleum Group for the **procurement of refined oil and by-products**[37](index=37&type=chunk) [Management Discussion and Analysis](index=14&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review and Outlook](index=14&type=section&id=Business%20Review%20and%20Outlook) International oil prices declined to USD 68/barrel in H1 2025, leading to a HKD 27.9 million Group loss, mainly from Canadian oil and gas operations - **International oil prices** declined due to geopolitical factors and tariff wars, with **WTI crude oil** averaging **USD 68/barrel** in H1 2025, down from **USD 77/barrel** in 2024[38](index=38&type=chunk)[39](index=39&type=chunk) - The Group's overall loss in H1 was approximately **HKD 27.9 million**, primarily due to the performance of its **Canadian oil and gas business**[39](index=39&type=chunk) [Canadian Producing Oil and Gas Upstream Business](index=14&type=section&id=Canadian%20Producing%20Oil%20and%20Gas%20Upstream%20Business) Novus faced declining oil prices and tight financing, resulting in a 37% production drop, 50% revenue decrease, and CAD 4.92 million net loss, prompting cost control and green tech exploration - **Novus's net oil and gas production** in H1 was **263,000 barrels of oil equivalent**, a **37% year-on-year decrease**; **sales revenue** was **CAD 16.4 million**, a **50% year-on-year decrease**; and a **net loss of CAD 4.92 million** was recorded[40](index=40&type=chunk) - **Capital expenditure** significantly decreased to **CAD 831 thousand**, a **75% year-on-year decrease**, slowing development progress[40](index=40&type=chunk) [Actively Responding to Production Decline, Continuously Optimizing Production and Operating Expenses](index=15&type=section&id=Actively%20Responding%20to%20Production%20Decline%2C%20Continuously%20Optimizing%20Production%20and%20Operating%20Expenses) Novus effectively controlled operating expenses by rapidly restoring production, pre-purchasing carbon credits, optimizing structure, and negotiating lower rent and insurance - Rapidly restored **daily average production of 184 barrels** lost due to extreme cold weather[41](index=41&type=chunk) - Saved **CAD 26 thousand** by pre-purchasing carbon credits, reduced **labor costs by CAD 1.82 million**, compressed **operating costs by CAD 35 thousand**, and lowered **office rent and insurance by CAD 77 thousand**[41](index=41&type=chunk) [Efficiently Organizing Production Operations, Effectively Improving Operational Efficiency](index=15&type=section&id=Efficiently%20Organizing%20Production%20Operations%2C%20Effectively%20Improving%20Operational%20Efficiency) Novus maintained stable production and efficiency by optimizing construction, adjusting inventory, and responding to weather, limiting Q1-Q2 production decline to 2% - Flexibly adjusted **inventory strategies** to ensure market supply and maximize profit amidst **international oil and natural gas price fluctuations**[42](index=42&type=chunk) - Rapidly completed **pipeline de-icing and well pad snow removal**, achieving only a **2% production decline** from Q1 to Q2[42](index=42&type=chunk) [Promoting Refined Oilfield Management, Continuously Implementing Cost Reduction and Efficiency Improvement](index=16&type=section&id=Promoting%20Refined%20Oilfield%20Management%2C%20Continuously%20Implementing%20Cost%20Reduction%20and%20Efficiency%20Improvement) Novus saved CAD 567 thousand in H1 by controlling expenses and carbon emissions, while implementing 52 production enhancement measures, increasing daily output by 103 barrels - Cumulative savings of **CAD 567 thousand** in H1, with an estimated **CAD 1.96 million** in annual savings[43](index=43&type=chunk) - Implemented **52 production enhancement measures**, increasing **daily average production by 103 barrels**, effectively curbing the decline trend of old wells[43](index=43&type=chunk) - **Field operating expenses** decreased by **7.7%** to **CAD 7.92 million**, and **administrative expenses** decreased by **14.8%** to **CAD 2.93 million**[43](index=43&type=chunk) [Strengthening Medium-to-Long-Term Planning Research, Supporting Healthy and Sustainable Oilfield Development](index=16&type=section&id=Strengthening%20Medium-to-Long-Term%20Planning%20Research%2C%20Supporting%20Healthy%20and%20Sustainable%20Oilfield%20Development) Novus developed a five-year plan with economic models for various oil price scenarios, exploring carbon capture and AI applications for sustainable development - Conducted a **"Novus Oilfield Five-Year Development Plan Study"**, building economic models under different **WTI oil price scenarios**[44](index=44&type=chunk) - Explored the feasibility of **carbon capture and storage projects** to expand green and low-carbon development[44](index=44&type=chunk) - Explored the application of **AI technology** in oilfield production management[44](index=44&type=chunk) [Actively Expanding Mineral Rights Area, Enhancing Company's Resource Security Capability](index=16&type=section&id=Actively%20Expanding%20Mineral%20Rights%20Area%2C%20Enhancing%20Company%27s%20Resource%20Security%20Capability) Novus evaluated non-core blocks and proposed a Wapiti block disposal plan to optimize asset structure and enhance resource diversity and risk resilience - Proposed a **Wapiti block disposal plan** to optimize asset structure and enhance resource diversity and risk resilience[45](index=45&type=chunk) [Strictly Managing Safety Production, Fully Fulfilling Environmental Compliance Obligations](index=17&type=section&id=Strictly%20Managing%20Safety%20Production%2C%20Fully%20Fulfilling%20Environmental%20Compliance%20Obligations) Novus prioritized safety by strengthening management and training, while strictly complying with Canadian environmental laws, implementing emission reductions, and remediating abandoned wells - Strengthened **on-site safety management systems** and regularly conducted **employee safety training and emergency drills**[46](index=46&type=chunk) - Strictly complied with **Canadian environmental laws and regulations**, actively implemented **emission reduction responsibilities**, and pre-built **natural gas pipelines** to reduce flaring emissions[46](index=46&type=chunk) - Diligently fulfilled **abandoned well remediation responsibilities**, completing government-assigned tasks on schedule[46](index=46&type=chunk) [China Oil Products Sales Downstream Business](index=17&type=section&id=China%20Oil%20Products%20Sales%20Downstream%20Business) Henan YanChang's retail and external sales businesses faced reduced profits and sales due to market pressures, resulting in a 36% sales volume drop, 41% revenue decrease, and RMB 2.1 million net profit - **Henan YanChang's total sales volume** in H1 was **1.3614 million tonnes**, a **36% year-on-year decrease**; **operating revenue** was **RMB 9.062 billion**, a **41% year-on-year decrease**; and **net profit** was **RMB 2.1 million**[47](index=47&type=chunk) - **Retail business** experienced **narrow profits and decreased sales** due to price adjustments, price caps, price wars, and new energy alternatives[47](index=47&type=chunk) - **External procurement and sales business** scaled down due to the **exclusion of risky businesses** and **reduced centralized procurement by Sinopec**[47](index=47&type=chunk) [Steady and Effective Business Advancement](index=17&type=section&id=Steady%20and%20Effective%20Business%20Advancement) Henan YanChang expanded its retail membership to 110,000, explored fixed investment and LNG businesses, and developed new merchants, laying groundwork for future growth - Promoted **retail membership system construction**, reaching **110,000 members**, with **3,000 new enterprise WeChat members**[48](index=48&type=chunk) - Actively organized research on **Sinopec Shiyan area gas station fixed investment business** and engaged in fixed investment business with **private customers**[48](index=48&type=chunk) - Conducted **LNG business feasibility studies**, laying the foundation for future business development[49](index=49&type=chunk) [Strengthened Business Assurance](index=18&type=section&id=Strengthened%20Business%20Assurance) Henan YanChang optimized personnel, streamlined processes, and reformed its retail system, while securing tax reductions totaling RMB 40.2 thousand through various initiatives - Completed open selection and appointment of **10 department heads, 8 deputy department heads**, and dual-choice positions for **157 grassroots employees**[50](index=50&type=chunk) - Optimized **authority and responsibility processes**, implemented **SOPs**, focusing on optimizing modules such as merchant management, logistics management, and external warehouse management[50](index=50&type=chunk) - Successfully secured a **2% reduction in urban construction tax rate** and **simplified collection for warehousing services**, saving **RMB 14.2 thousand** and **RMB 12.1 thousand** in taxes in H1[50](index=50&type=chunk) [Continuously Consolidating Safety Foundation](index=18&type=section&id=Continuously%20Consolidating%20Safety%20Foundation) Henan YanChang achieved a low-risk safety rating for its storage base, hosted emergency drills, and completed 1,551 safety trainings with 100% frontline employee coverage - Large oil and gas storage base safety risk self-assessment scored **910 points**, rated as **low risk**[51](index=51&type=chunk) - Hosted a **comprehensive emergency rescue drill** for hazardous chemical production safety accidents in Xinzheng City[51](index=51&type=chunk) - Conducted **1,551 safety production training sessions** in H1, with **100% coverage for frontline employees**; all **185 safety hazards** have been rectified[51](index=51&type=chunk) [Outlook](index=19&type=section&id=Outlook) Global energy market uncertainty and geopolitical factors will constrain oil prices in H2; the company plans to innovate, optimize sales, and diversify for sustainable growth - **Global energy market uncertainty** remains high in H2, with **geopolitical conflicts** and **slowing global economic growth** continuing to impact oil prices[52](index=52&type=chunk) - The Company will deepen **technological innovation in exploration and development** to improve **oil and gas resource recovery efficiency**[53](index=53&type=chunk) - Adhere to a **diversified development strategy**, exploring new businesses to achieve **sustainable development**[53](index=53&type=chunk) [Financial Review](index=19&type=section&id=Financial%20Review) [Segment Revenue and Results](index=19&type=section&id=Segment%20Revenue%20and%20Results) Group revenue from Canadian oil and gas (now a loss) and China oil product trading (now a profit) saw significant declines in sales volume and revenue - **Novus's oil and natural gas sales volume** was **263,010 barrels of oil equivalent**, with **revenue of HKD 94,132 thousand**, representing year-on-year decreases of **42.4%** and **50.2%** respectively[54](index=54&type=chunk) - **Novus** generated an **operating loss of HKD 34,261 thousand**, compared to an **operating profit of HKD 7,932 thousand** in the prior year[54](index=54&type=chunk) - **China oil product trading business sales volume** decreased from **2.13 million tonnes** to **1.36 million tonnes**, and **revenue** decreased from **HKD 16,582,456 thousand** to **HKD 9,900,386 thousand**[55](index=55&type=chunk) [Other Income](index=20&type=section&id=Other%20Income) Other income decreased by HKD 1,922 thousand to HKD 3,560 thousand, mainly from bank interest, fuel card income, and rent - **Other income** was **HKD 3,560 thousand**, a year-on-year decrease of **HKD 1,922 thousand**, primarily from **bank interest, fuel card income, and rent**[56](index=56&type=chunk) [Royalty Fees](index=20&type=section&id=Royalty%20Fees) Royalty fees decreased by 28.53% to HKD 15,574 thousand, primarily due to reduced Novus revenue - **Royalty fees** were **HKD 15,574 thousand**, a year-on-year decrease of **28.53%**, mainly due to reduced **Novus revenue**[57](index=57&type=chunk) [Oilfield Operating Expenses](index=20&type=section&id=Oilfield%20Operating%20Expenses) Oilfield operating expenses decreased by 7.13% to HKD 45,495 thousand, primarily due to reduced Novus production and sales volume - **Oilfield operating expenses** were **HKD 45,495 thousand**, a year-on-year decrease of **7.13%**, primarily due to reduced **Novus production and sales volume**[58](index=58&type=chunk) [Exploration and Evaluation Expenses](index=20&type=section&id=Exploration%20and%20Evaluation%20Expenses) Exploration and evaluation expenses were HKD 1,271 thousand, mainly holding costs for Novus's non-producing land interests - **Exploration and evaluation expenses** were **HKD 1,271 thousand**, primarily representing holding costs for **Novus's non-producing land interests**[59](index=59&type=chunk) [Selling and Distribution Expenses](index=20&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses significantly decreased by 61.00% to HKD 7,033 thousand, mainly from Henan YanChang's oil trading business - **Selling and distribution expenses** were **HKD 7,033 thousand**, a year-on-year decrease of **61.00%**, primarily from **Henan YanChang's oil product trading business**[60](index=60&type=chunk) [Administrative Expenses](index=20&type=section&id=Administrative%20Expenses) Administrative expenses decreased by 8.32% to HKD 34,312 thousand, covering directors' emoluments, staff salaries, office rent, and professional fees - **Administrative expenses** were **HKD 34,312 thousand**, a year-on-year decrease of **8.32%**[61](index=61&type=chunk) [Depreciation, Depletion and Amortization](index=20&type=section&id=Depreciation%2C%20Depletion%20and%20Amortization) Depreciation, depletion, and amortization expenses decreased by 38.17% to HKD 59,755 thousand, mainly due to reduced Novus production and sales volume - **Depreciation, depletion and amortization expenses** were **HKD 59,755 thousand**, a year-on-year decrease of **38.17%**, primarily due to reduced **Novus production and sales volume**[62](index=62&type=chunk) [Other Gains and Losses - Financial Review](index=21&type=section&id=Other%20Gains%20and%20Losses-Financial%20Review) The Group recorded other gains of HKD 24,577 thousand, primarily net exchange gains, contrasting with a prior year loss - **Other gains** were **HKD 24,577 thousand**, representing **net exchange gains**, compared to a loss in the prior year[63](index=63&type=chunk) [Finance Costs - Financial Review](index=21&type=section&id=Finance%20Costs-Financial%20Review) Total finance costs were HKD 18,166 thousand, slightly higher than prior year, including interest on bank borrowings, secured loans, and lease liabilities - **Finance costs** were **HKD 18,166 thousand**, slightly higher than the prior year, primarily including interest on **bank borrowings, secured term loans, lease liabilities, other loans, and abandonment provision**[64](index=64&type=chunk) [Taxation](index=21&type=section&id=Taxation) The Group recorded a HKD 770 thousand tax credit, mainly from China enterprise income tax over-provision offsetting Hong Kong profits tax under-provision - **Tax credit** of **HKD 770 thousand**, primarily from an **over-provision of HKD 796 thousand** for China enterprise income tax, offsetting an **under-provision of HKD 26 thousand** for Hong Kong profits tax[65](index=65&type=chunk) [Loss for the Period](index=21&type=section&id=Loss%20for%20the%20Period) The Group's overall loss was HKD 27,847 thousand, with Novus incurring a HKD 28,250 thousand loss, while Henan YanChang maintained a HKD 2,300 thousand profit - The Group's **loss for the period** was **HKD 27,847 thousand**, with **Novus** incurring a **HKD 28,250 thousand loss**, and **Henan YanChang** maintaining a **HKD 2,300 thousand profit**[66](index=66&type=chunk) [Liquidity and Financial Resources](index=21&type=section&id=Liquidity%20and%20Financial%20Resources) The Group funds operations via internal resources and loans; cash was HKD 240,015 thousand, gearing 116.1%, and current ratio 81.0%, indicating increased liquidity pressure - The Group primarily funds its operations through **internal resources, bank borrowings, unsecured other loans, and secured term loans**[67](index=67&type=chunk) - As of June 30, 2025, **cash and bank balances** were **HKD 240,015 thousand**, a decrease from **HKD 278,675 thousand** at the end of 2024[70](index=70&type=chunk) - **Gearing ratio** was **116.1%**, **current ratio** was **81.0%**, lower than **107.0%** at the end of 2024, indicating **increased liquidity pressure**[70](index=70&type=chunk) [Treasury Management and Policies](index=22&type=section&id=Treasury%20Management%20and%20Policies) The Group employs prudent cash management to minimize currency and interest rate risks, holding cash in multiple currencies without hedging, but will act if needed - The Group adopts **prudent cash management and risk monitoring policies** aimed at minimizing **foreign currency exchange rate and interest rate fluctuation risks**[71](index=71&type=chunk) - Cash is primarily held in **short-term deposits** denominated in **HKD, USD, CAD, and RMB**[71](index=71&type=chunk) - The Group has **not undertaken foreign exchange hedging transactions**, but management will take measures when deemed appropriate[71](index=71&type=chunk) [Material Acquisitions and Disposals](index=22&type=section&id=Material%20Acquisitions%20and%20Disposals) The Group had no material acquisitions or disposals during the six months ended June 30, 2025 - The Group had **no material acquisitions or disposals** in H1 2025[72](index=72&type=chunk) [Material Investments](index=23&type=section&id=Material%20Investments) The Group held no material investments as of June 30, 2025 - The Group held **no material investments** as of June 30, 2025[73](index=73&type=chunk) [Capital Commitments](index=23&type=section&id=Capital%20Commitments) Capital commitments totaled HKD 462 thousand for property, plant, and equipment purchases, contracted but not yet provided for - **Capital commitments** amounted to **HKD 462 thousand**, related to the purchase of **property, plant and equipment**, contracted but not yet provided for[74](index=74&type=chunk) [Pledge of Assets](index=23&type=section&id=Pledge%20of%20Assets) Novus's secured term loan is collateralized by debentures and a floating charge, while the Company's loan is guaranteed by 70% of Henan YanChang's issued share capital - **Novus's USD 35 million secured term loan** is collateralized by **USD 70 million debentures** and a **floating charge over all Novus's assets**[75](index=75&type=chunk) - The Company's **USD 22 million secured term loan** is guaranteed by **70% of Henan YanChang's issued share capital**[75](index=75&type=chunk) [Contingent Liabilities - Financial Review](index=23&type=section&id=Contingent%20Liabilities-Financial%20Review) The Group had no significant contingent liabilities as of June 30, 2025 - The Group had **no significant contingent liabilities** as of June 30, 2025[77](index=77&type=chunk) [Bankruptcy Progress of a Non-Wholly Owned Chinese Subsidiary](index=23&type=section&id=Bankruptcy%20Progress%20of%20a%20Non-Wholly%20Owned%20Chinese%20Subsidiary) A 51%-owned Chinese subsidiary was declared bankrupt in June 2025, but its non-consolidation since 2023 means no material impact on the Group - **YanChang Petroleum (Zhejiang Free Trade Zone) Co., Ltd.** was declared **bankrupt** and its liquidation procedures terminated in **June 2025**[78](index=78&type=chunk) - The subsidiary ceased to be consolidated in **2023**, so its bankruptcy has **no material impact** on the Group's current operations, performance, or financial position[78](index=78&type=chunk) [Other Information](index=24&type=section&id=Other%20Information) [Employees and Remuneration Policy](index=24&type=section&id=Employees%20and%20Remuneration%20Policy) The Group had 203 employees with total staff costs of HKD 38,767 thousand (up 9.92%), guided by fair, incentive-based remuneration policies, and no share options granted - The Group had a total of **203 employees**, with **total staff costs of HKD 38,767 thousand**, a year-on-year increase of **9.92%**[79](index=79&type=chunk) - Remuneration policy is based on **fairness, incentives, performance, and market practices**, providing benefits such as **provident funds and medical insurance**[79](index=79&type=chunk) - **No share options** were granted in H1 2025[79](index=79&type=chunk) [Interim Dividend - Other Information](index=24&type=section&id=Interim%20Dividend-Other%20Information) The Board does not recommend any interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend the payment of an **interim dividend** for H1 2025[80](index=80&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=24&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities in H1 2025 - The Group did **not purchase, sell, or redeem any listed securities** in H1 2025[81](index=81&type=chunk) [Corporate Governance Practices](index=24&type=section&id=Corporate%20Governance%20Practices) The Board adheres to high corporate governance standards, largely complying with Listing Rules, but notes deviations in independent director tenure, meeting attendance, and role separation - The Board is committed to **high standards of corporate governance**, aiming to enhance **transparency, independence, accountability, responsibility, and fairness**[82](index=82&type=chunk) - **Independent non-executive directors** have served for **over nine years**, and the Company is seeking new candidates[82](index=82&type=chunk) - **Non-executive Director Ms. Lu Yiwen** did **not attend the Annual General Meeting**[85](index=85&type=chunk) - The roles of **Chairman and Chief Executive** are **not separated**, but the Board believes the balance of power under existing arrangements is not impaired[85](index=85&type=chunk) [Audit Committee](index=25&type=section&id=Audit%20Committee) The Audit Committee, composed of three independent non-executive directors, reviewed the Company's accounting principles and interim financial statements - The **Audit Committee**, comprising **three independent non-executive directors**, has reviewed the Company's **accounting principles, policies, and interim financial statements**[83](index=83&type=chunk) [Continuing Connected Transactions](index=25&type=section&id=Continuing%20Connected%20Transactions) The Group has continuing connected transactions, mainly for petroleum product procurement and sales with related parties, complying with Listing Rules Chapter 14A - **Henan YanChang** has **continuing connected transactions** with **YanChang Petroleum Group** and its fellow subsidiaries for the **procurement and sale of refined oil and by-products**[84](index=84&type=chunk)[86](index=86&type=chunk) - **Disclosure requirements** of **Listing Rules Chapter 14A** have been complied with[87](index=87&type=chunk) [Standard Code for Securities Transactions by Directors](index=26&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company adopted the Listing Rules Appendix 10 Standard Code, and all Directors confirmed compliance for H1 2025 - The Company has adopted the **Standard Code** as set out in **Listing Rules Appendix 10**, and Directors confirmed compliance[88](index=88&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=26&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) The interim results announcement is published on HKEX and company websites; the interim report will be dispatched to shareholders and posted online - The **interim results announcement** has been published on the **HKEX website and the Company's website**[89](index=89&type=chunk) - The **interim report** will be dispatched to shareholders and posted on the websites in due course[89](index=89&type=chunk) [By Order of the Board](index=26&type=section&id=By%20Order%20of%20the%20Board) This announcement is published by Mr. Feng Yinguo, Chairman of the Board, on behalf of the Board, listing all directors - The announcement is published by **Mr. Feng Yinguo, Chairman of the Board**, on behalf of the Board[90](index=90&type=chunk)

Group 1 - The company, Yanchang Petroleum International (00346.HK), announced that its board meeting will be held on August 28, 2025, to consider and approve the unaudited interim results for the six months ending June 30, 2025, and to declare an interim dividend if applicable [1]