* First-half output 173.3 mln boe excluding Nexen's
* Including Nexen's contribution, first-half output jumps
* First-half net profit of 34.38 bln yuan beats analyst
* First-half capex soars 34.8 percent on year to $5.21
(Recasts with details, comments from CNOOC executives)
HONG KONG, Aug 20 China's top offshore oil
explorer CNOOC Ltd, which acquired Canadian energy
firm Nexen for $15.1 billion in February, said it is on track to
meet its 2013 output target after posting a first-half profit
that beat analyst estimates.
CNOOC, once an investor darling for its high-growth profile,
has been struggling to boost its output in the past few years as
domestic fields age. The firm has spent heavily on more advanced
technology to drill in deep-sea areas off the Chinese coast,
expanded into unconventional energy such as oil sands and shale
in North America, and acquired assets including Nexen - the
biggest ever overseas corporate takeover by a Chinese company.
State-controlled CNOOC said previously it aimed to produce
338 million-348 million barrels of oil equivalent (boe) this
year, excluding Nexen's contribution, or growth of just up to 2
percent from 2012. First-half output rose 7.7 percent on year to
173.3 million boe, not including Nexen's production, according
to a filing with the Hong Kong stock exchange on Tuesday.
"We maintain our original production forecast," CNOOC's
Chief Executive Li Fanrong told reporters at the firm's earnings
briefing, adding that the company is keeping its original output
target of 6 to 10 percent compound annual growth in 2011-2015,
excluding contributions from Nexen.
In the filing released after the market close, CNOOC said
first-half net profit gained 7.9 percent to 34.38 billion yuan
($5.61 billion) as increased output offset lower crude prices
and higher operating costs. That topped the average forecast of
30.87 billion yuan in a Reuters poll of four analysts.
Nexen contributed 197 million yuan to CNOOC's net profit and
24.8 million boe to the firm's output.
For the whole of this year, Nexen is expected to contribute
59 million boe to CNOOC's output, Chief Financial Officer Zhong
Hua said at the briefing.
CNOOC said previously that the acquisition of Nexen would
boost its output by 20 percent and increase its proven reserves
by 30 percent.
"We bought Nexen not because we expected any immediate
benefit. We are looking at its long-term potential," Li said.
Shares of CNOOC ended 1.72 percent lower at HK$14.82 on
Tuesday, outperforming a 2.2 percent decline in the blue-chip
Hang Seng Index.
However, in the first half of the year, the stock
underperformed compared with the shares of other Chinese oil
majors such as PetroChina. That was partly due to
investor concerns that CNOOC overpaid for Nexen, analysts say.
Excluding contributions from Nexen, production rose in the
first half as CNOOC's Penglai 19-3 oilfield in eastern China's
Bohai Bay resumed output after an oil spill in 2011. Projects in
the United States and Iraq were also "an important source of
production growth," CNOOC said.
CNOOC aims to launch 10 new exploration and production
projects offshore China in the second half. But the projects
will have limited impact on this year's output and earnings as
most of them won't be up and running until the end of 2013,
company executives said.
Increased exploration has come with higher expenses.
Capital expenditure soared 34.8 percent on year to $5.21
billion in the first half. CNOOC, which held 48.1 billion yuan
cash on hand at the end of June, has earmarked capital
expenditure of $12 billion-$14 billion for the entire 2013.
That excludes Nexen's 2013 spending of $3.16 billion.
CNOOC, 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
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.
($1 = 6.1229 Chinese yuan)
(Reporting by Charlie Zhu; Additional reporting by Twinnie Siu
and Christina Lo; Editing by Ryan Woo)