UPDATE 1-CNOOC's first-half profit beats analyst estimates

Tue Aug 20, 2013 5:21am EDT

HONG KONG Aug 20 (Reuters) - China's CNOOC Ltd, which closed its $15.1 billion acquisition of Canadian energy producer Nexen in February, posted a 7.9 percent gain in its first-half earnings, beating estimates, as increased output offset lower crude prices and higher operating costs.

China's top offshore oil producer posted a net profit of 34.38 billion yuan ($5.61 billion) for January-June, compared with 31.87 billion yuan a year earlier and topping the average forecast of 30.87 billion yuan in a Reuters poll of four analysts.

Oil and gas output jumped 23.1 percent on year to 198.1 million barrels of oil equivalent (BOE) in the first six months, including 24.8 million BOE from Nexen, CNOOC said in a filing with the Hong Kong stock exchange on Tuesday.

CNOOC said previously the acquisition of Nexen - the biggest ever overseas corporate takeover by a Chinese company - would boost its production by 20 percent and increase its proven reserves by 30 percent.

Excluding the output contribution from Nexen, production rose 7.7 percent to 173.3 million BOE as CNOOC's Penglai 19-3 oilfield in eastern China's Bohai Bay resumed production following an oil spill in 2011. Its projects in the United States and Iraq were also "an important source of production growth" for the company, it said.

The impact of the output increase was partly offset by slightly lower oil prices and higher costs, CNOOC said. Like many other oil companies in the world, CNOOC has been facing rising costs as it widens its exposure to unconventional energy such as oil sands.

The company, which declared an interim dividend of HK$0.25 per share for the first half, said its integration with Nexen was proceeding smoothly and that CNOOC has been "actively" working on its application for a secondary listing on the Toronto Stock Exchange.

To win Canadian approvals for the Nexen takeover, CNOOC made a series of commitments like retaining all Nexen staff, pursuing a listing in Toronto and making Calgary the headquarters of its $8 billion North and Central American operations.