CNOOC(SH:600938)2024-06-14 00:30Investment Rating - The report assigns a "Buy" rating to the company, with a previous rating of "Not Rated" [43]. Core Views - The company is positioned as a leading marine oil and gas exploration and production enterprise in China, with a strong resource endowment and a notable low-cost advantage, indicating stable and positive performance [45]. - The oil and gas extraction industry is expected to maintain a high level of prosperity, supported by ongoing demand growth from emerging economies and a stable international oil price outlook [45]. - The company is increasing its capital expenditure to enhance production capacity, with projected net production reaching 700-720 million barrels of oil equivalent in 2024 [45]. Summary by Sections Company Overview - The company primarily engages in the exploration, development, production, and sales of oil and gas, with significant operations in China's offshore regions [42]. - As of the end of 2023, the company's domestic offshore reserves and production accounted for approximately 60% and 69% of its total reserves and production, respectively [42]. Industry Outlook - The report highlights that the international oil price is expected to remain at a mid-to-high level in 2024, with the oil and gas extraction industry continuing to thrive [45]. - Factors such as OPEC+ production policies and geopolitical tensions are reshaping global oil trade dynamics, which may impact supply stability [45]. Financial Performance - The company achieved a net production of approximately 180.1 million barrels of oil equivalent in Q1 2024, reflecting a year-on-year increase of 9.9% [45]. - The average realized price for oil was $78.75 per barrel, up 6.2% year-on-year, contributing to a revenue of 111.468 billion RMB, a 14.1% increase from the previous year [45]. Cost Management - The company's main cost per barrel of oil decreased to $28.83 in 2023, down 5.1% year-on-year, and further reduced to $27.59 in Q1 2024 [45]. - The report emphasizes the importance of controlling depreciation, depletion, and amortization (DD&A) costs and operational expenses to maintain competitive pricing [45]. Transition to Low-Carbon Energy - The company is actively pursuing low-carbon development, with natural gas production increasing and expected to account for 30% of its output by 2025 [45]. - The integration of offshore wind power projects with oil and gas operations is highlighted as a key strategy for sustainable growth [45].