According to a research report released by UBS, the net profit of CNOOC (00883) increased 23.7% year on year and 51.6% quarterly to 39.7 billion yuan, higher than the market and the forecast. This was mainly due to the rapid increase in production during the period, the 6.2% increase in oil prices to 78.75 US dollars per barrel, and the appreciation of the US dollar exchange rate. The report raised CNOOC's 2024-2026 profit forecast by 2%, and the target price for H shares was raised from HK$26 to HK$26.3, with a “buy” rating.
According to the report, CNOOC's production in the first quarter increased 9.9% year-on-year to 180.1 million barrels. Its domestic production in China increased 6.9% to 123.1 million barrels, and overseas production increased 16.9% to 56.9 million barrels. Oil prices increased 6.2% year-on-year in the first quarter, and the discount with Brent crude oil prices narrowed sharply. Natural gas prices fell 7.7% year on year in the first quarter, and the Group expects gas prices to remain stable in 2024.
The bank also mentioned that CNOOC's guidelines for maintaining annual production in 2024 are 700 million to 720 million barrels of oil equivalent. After strong growth in the first quarter, it is believed that annual production may exceed the upper limit of the guideline range. The Group has not adjusted its capital expenditure plan and still expects capital expenditure of 125 billion to 135 billion yuan in 2024.