Quote | Super Quote
Super Quote   |   Detail Quote   |   Interactive Chart   |   Transaction   |   Related News   |   Related Securities   |   Company Information   |   Dividend Records   |   Short Sell
00883 CNOOC
RTNominal up18.120 +0.520 (+2.955%)
Research Report

14/01/2020 17:42

CNOOC's strong output growth to support higher capex - S&P

[ET Net News Agency, 14 January 2020] S&P Global Ratings said today that strong
production growth and stringent cost controls will generate robust operating cash flow for
CNOOC Ltd. (A+/Stable/--)(00883) to fund its rising capital expenditure.
The China-based company expects to spend more on exploration activities to increase oil
and gas reserves and support its production target of two million barrels of oil
equivalents (mmboe) per day (or about 730 mmboe) by 2025.
The credit rating agency believes CNOOC will maintain its financial discipline, such
that its debt-to-EBITDA ratio stays below 1.0x under our current price assumptions.
Management estimates production in full-year 2019 at 503 mmboe, which is 3% above the
high end of production guidance of 480-490 mmboe given at the beginning of 2019.
Management also raised its production targets for 3% annually in 2020 to 520-530 mmboe
and in 2021 to about 555 mmboe, and introduced a target of about 590 mmboe for 2022.
Volumes in 2019-2021 are 3%-4% above our current forecasts.
CNOOC's capex was RMB80.2 billion in 2019. This was at the high end of the guidance of
RMB70 billion-RMB80 billion that management provided early in 2019, and was in line with
our estimate. The company budgeted RMB85 billion-RMB95 billion in 2020 capex, of which 62%
will be spent in China, in order to raise domestic exploration and production efforts. In
response to higher capex, management continues to target a reserve replacement ratio of
120%.
Cost controls remained very effective in 2019. Despite lower oil price in 2019 versus
2018, management said 2019 profit was higher than the previous year's, due to stringent
cost controls. This will remain a focus of management, which maintains US$35 per barrel
oil as a stress test for projects.
S&P expects the company to continue to generate healthy discretionary cash flow since
management has indicated that it has no plan to increase leverage for dividends, given the
company's strong operating cash flow and high cash on hand. The determining factors of
dividend remain earnings, financial position, capex plan, and the dividend level of
international peers. S&P currently assumed a flat total dividend payout from the 2018
level. (KL)

Remark: Real time quote last updated: 28/03/2024 18:00
  Real-time basic market prices of Hong Kong securities are provided by HKEx; a Designated Website authorized by the HKEx Group to provide the Service
A Member of HKET Holdings
Customer Service Hotline:(852) 2880 7004     Customer Service Email:cs@etnet.com.hk
Copyright 2024 ET Net Limited. http://www.etnet.com.hk ET Net Limited, HKEx Information Services Limited, its Holding Companies and/or any Subsidiaries of such holding companies, and Third Party Information Providers endeavour to ensure the availability, completeness, timeliness, accuracy and reliability of the information provided but do not guarantee its availability, completeness, timeliness, accuracy or reliability and accept no liability (whether in tort or contract or otherwise) any loss or damage arising directly or indirectly from any inaccuracies, interruption, incompleteness, delay, omissions, or any decision made or action taken by you or any third party in reliance upon the information provided. The quotes, charts, commentaries and buy/sell ratings on this website should be used as references only with your own discretion. ET Net Limited is not soliciting any subscriber or site visitor to execute any trade. Any trades executed following the commentaries and buy/sell ratings on this website are taken at your own risk for your own account.