CNOOC 0883

[winston]

After Oil has doubled, the experts now ask you to buy ..

DJ MARKET TALK: Cnooc Down 1.5%; Phillip Suggests Buy At HK$9.98

1554 [Dow Jones] Cnooc (0883.HK) down 1.5% at HK$10.26, tracking overall market decline (HSI down 1.6%), on profit-taking after stock's 19.7% rise month-to-date, which likely already priced in recent crude price rally, despite July crude futures settling at new 6-month high of US$62.04/bbl on Nymex overnight.

Phillip Securities says as global oil companies and investors have canceled or postponed about US$170 billion of investment, equivalent to roughly two million barrels a day in future oil supply (based on International Energy Agency report), this likely to pave way for oil price to surge ahead. Suggests buying Cnooc at HK$9.98, target at HK$10.90.

[winston]

DJ MARKET TALK: Cnooc Down 0.8% Pre-Mkt; Citi Downgrades To Sell

0944 [Dow Jones] STOCK CALL: Cnooc (0883.HK) down 0.8% at HK$9.71 at pre-open, extending Friday's losses (when it fell 2.8%) after stock's 15.0% rise month-to-date, as shares should have priced in recent strength in crude price. Citigroup downgrades stock to Sell vs Buy as valuation is "significantly higher" than its U.S., European peers; but "we continue to see Cnooc as a top quality upstream company with strong growth and good cost control. Our downgrade is driven by its strong outperformance relative to the sector." Keeps target at HK$7.40

[winston]

Small position to follow the story ..

DJ MARKET TALK: MS Upgrades Cnooc To Overweight; HK$10.80 Target

0922 [Dow Jones] STOCK CALL: Morgan Stanley upgrades Cnooc (0883.HK) to Overweight from Equalweight, raises target to HK$10.80 from HK$7.40; says Cnooc is direct beneficiary of stronger oil prices thanks to its pure exposure to exploration & production, with higher oil prices heading into 2010.

"Cnooc has guided for production growth of 6%-10% in the next five years. Our industry checks suggest 6%-8% could be achieved even with deep water exploration." Tips Cnooc's earnings, cash-flow to improve significantly in 2010

[winston]

Not vested anymore.

DJ MARKET TALK: Credit Suisse Keeps Cnooc At Underperform

1513 [Dow Jones] STOCK CALL: Credit Suisse keeps Cnooc (0883.HK) at Underperform (target price not given) after news 50:50 JV formed by company, Sinopec (0386.HK) parent buys 20% stake in oil fields off coast of Angola.

Says acquisition offers opportunity to Cnooc to buy long-dated production with potential for exploration upside in block that is prolific, in region where geology is attractive. Adds, it is consistent with management's goal of diversifying geological risk.

Notes returns depend on further exploration success, upside will be capped by profit sharing mechanism. Thinks acquisition has no material impact on NAV. Stock last down 0.4% at HK$10.18.

[winston]

Not vested.

DJ MARKET TALK: Cnooc Share Price Implies Oil At $80/Bbl - CS

0914 [Dow Jones] Overnight HK ADR moves hint Cnooc (0883.HK) may outperform peers with pure upstream play likely well supported by crude oil price strength; August crude futures +1.2% at $64.72/bbl on Nymex. Cnooc's ADRs ended +1.4% at equivalent of HK$10.38 vs local close of HK$10.24, while integrated oil play PetroChina (0857.HK) only +0.3% at HK$8.82 vs local close of HK$8.79, refiner Sinopec (0386.HK) down 0.2% at HK$6.38 vs HK$6.39.

But stock unlikely to rise sharply after having gained more than 70% from year-to-date trough of HK$6.00; stock also +4.7% over past 2 sessions on news JV of company, Sinopec parent purchased stake in oil fields off Angola coast. Credit Suisse says Cnooc's current share price implies $80/bbl-plus long-term oil price. House keeps stock at Underperform, target at HK$8.29. Stock ended +0.2% at HK$10.24 Tuesday.

[winston]

Analyst on Bloomberg now very negative on CNOOC:-
1) The Angolan purchase will burned up all of their capex so they have to raise money again
2) Most expensive oi play; Target Price HK$5
3) Will report bad results

[eauyong]

On the other hand, most of oil plays were higher last week, for example ConocoPhillips COP $44.95 +0.96 (+2.18%); Exxon Mobil Corp. XOM $72.29 +0.68 (+0.94%) but PetroChina Co Ltd. PTR is down a bit at $119.21 -0.68 (-0.56%). Not much of a correlation though but is COP going to announce good results?

[winston]

So why did they agree to but the LNG in the first place ? Time to avoid this stock for a while ...

CNOOC hard to find users for costly Qatar LNG-Xinhua

BEIJING, Aug 19 (Reuters) - State-owned China National Offshore Oil Corporation (CNOOC) has been struggling to find end-users for liquefied natural gas (LNG) to be imported from Qatar because of high import costs, Chinese media said.

The leading LNG importer is scheduled to begin shipping the clean fuel from September under a 2-million-tonnes-per-year (tpy) supply deal.

Most downstream buyers had only signed intention agreements rather than formal contracts with the leading Chinese LNG importer, the official Xinhua news agency reported in a biweekly newsletter.

The LNG, which was priced in accordance with the Japanese Crude Cocktail (JCC), a benchmark for setting LNG prices for Japanese buyers, was estimated to arrive at Chinese terminal Dapeng at around 3 yuan per cubic metre, the report said.

The price would be almost twice as expensive as existing supplies from Australia and would leave minimal margins for city gas distributors that face government-set gas retail prices, and gas-fired power generators facing fixed power tariffs.

CNOOC declined to give details about domestic sales of Qatar LNG, Xinhua said.

Calls to CNOOC were not immediately answered.

Separately, CNOOC and China Merchants Energy Shipping Co Ltd (601872.SS) are considering teaming up with Malaysia International Shipping Corp (MISC.KL) to build a fleet of six LNG carriers to ship the fuel from Malaysia to Shanghai, Xinhua said.

[kennynah]

it appears that there is a steady and certain global shift from using gas to LNG to power automobiles... Thailand has been very successful in this transformation. more drivers in Singapore are also converting their vehicles to be LNG friendly. so is Malaysia.

[winston]

Cnooc First-Half Net Beats Estimates as Oil Rebounds (Update2) By John Duce

Aug. 26 (Bloomberg) -- Cnooc Ltd., China’s biggest offshore energy explorer, posted first-half profit that exceeded analysts’ estimates after oil prices rebounded and the nation’s economic recovery spurred demand for fuels.

Net income fell 55 percent to 12.4 billion yuan ($1.8 billion), or 0.28 yuan a share, from 27.5 billion yuan, or 0.61 yuan a share, a year earlier, Cnooc said in a statement to the Hong Kong stock exchange today. That’s higher than a median estimate of 11.5 billion yuan in a Bloomberg News survey of seven analysts. Sales dropped 42 percent to 40.6 billion yuan.

Crude oil has more than doubled from its February low as the global recession eased, with China’s economic growth accelerating to 7.9 percent in the second quarter. Prices still averaged 53 percent less in the first six months than a year earlier, reducing earnings at producers including Royal Dutch Shell Plc and Exxon Mobil Corp.

“Cnooc is seen by investors as a well-run company and one that will do well when the Chinese economy fully recovers,” said Gideon Lo, an energy analyst at DBS Vickers Hong Kong. “The company’s performance is tied to demand and the price of oil and we’ve already seen that crude prices are rising.”

Seventeen out of 30 analysts surveyed by Bloomberg rate Cnooc a “buy,” while eight have a “sell.”

Oil prices over $60 a barrel are “good” for Cnooc as the cost of production is $20, Chairman Fu Chengyu told reporters after an annual general meeting in May, indicating rising crude prices will help to improve the company’s earnings performance.

Net production is expected to increase by more than 15 percent this year, Fu said in today’s statement.

“The economic recovery is positive for the company’s performance,” Fu said. “Nevertheless it’s our organic growth that will help us ride through the ‘winter’ quickly.”

Boosting Output

China’s third-largest oil company said in April it planned to boost output to help cushion a likely profit slump this year. Parent China National Offshore Oil Corp. will intensify efforts to secure resources overseas in the second half, the company said in a statement on July 27.

Cnooc’s parent is in talks to buy a stake in Repsol YPF SA’s Argentinean unit, three people familiar with the discussions said on July 3.

The energy explorer and China Petroleum & Chemical Corp. said last month they agreed to acquire a 20 percent stake in an offshore block in Angola for $1.3 billion from Marathon Oil Corp., the fourth-largest U.S. oil company.

About 83 percent of Cnooc’s reserves are off the coast of China, according to the company’s annual report last year. The company has interests in oil and gas fields in Africa, Australia and Indonesia.

http://www.bloomberg.com/apps/news?pid= ... SbRkGjcQHg