CNOOC 0883

[winston]

DJ MARKET TALK: Cnooc +1.1%; Citi Tips High Valuation, Rates Sell

1056 [Dow Jones] Cnooc (0883.HK) +1.1% at HK$10.92, lagging HSI's 1.9% rally, despite crude price strength, with November crude futures settling +0.7% at US$70.88/bbl on Nymex. Stock also underperforms vs integrated oil play PetroChina's (0857.HK) 2.7% gain, but inline with downstream play Sinopec's (0386.HK) 1.1% rise.

Cnooc's underperformance possibly due to high valuation. Citigroup says based on US$65/bbl FY10 oil price (Brent) assumption, Cnooc is trading at 13X FY10 earnings vs historic average of 9X. "We estimate the current share price reflects a long-term US$81/bbl oil price based on our DCF model."

House raises FY09 earnings forecast by 14% based on higher oil price assumption, but keeps target of HK$8.80 unchanged based on 6.1X EV/DACF, which Cnooc's historic average. Keeps at Sell. Psychological HK$11.00 as immediate cap, vs intraday high of HK$10.96.

Source: Dow Jones Newswire

[winston]

Not vested.

DJ MARKET TALK: Sell Cnooc, PetroChina Into Strength - Cinda Intl

1521 [Dow Jones] Cnooc (0883.HK) +4.5% at HK$12.46, PetroChina (0857.HK) +3.0% at HK$10.28, after setting fresh 52-week highs of HK$12.48, HK$10.30, respectively, as duo benefit from recent oil price strength, with November crude futures settling over $78/bbl on Nymex Friday.

Castor Pang at Cinda International expects further upside likely capped, after recent sharp gains in duo; tips Cnooc, PetroChina to have near-term caps at around HK$13.50, HK$11.00. "As the oil price is expected to hit $80 per barrel, these stocks are now moving in advance. But I think further upside is likely limited after their recent sharp rise. Investors should sell these stocks into strength."

Source: Dow Jones Newswire

[winston]

Not vested.

Cnooc Falls the Most in Two Weeks on Report of Earnings Decline
By Jonathan Burgos

Oct. 21 (Bloomberg) -- Cnooc Ltd., China’s biggest offshore oil producer, declined the most in two weeks after the Wall Street Journal reported the company’s nine-month pretax profit fell 46 percent from a year earlier.

Pretax profit fell to 28.31 billion yuan ($4.2 billion) and revenue declined about 34 percent to 56.2 billion yuan in the same period, mainly because of lower oil prices, the report said, citing an unnamed person familiar with the matter. Xiao Zongwei, Cnooc’s spokesman in Beijing, declined to comment on the report.

Net income dropped 55 percent in the first half to 12.4 billion yuan, China’s biggest offshore oil explorer said in August. The profit beat estimates after oil prices recovered from a February low and China’s economic growth accelerated in the second quarter.

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

[winston]

Not vested. Expecting Oil to drop further and am worried about their past few projects. Good piece of analysis. Will give listen more to the RBS boys..

DJ MARKET TALK: Cnooc Down; Roc Talks Ignored, RBS Starts At Sell

1226 [Dow Jones] Cnooc (0883.HK) down 1.1% at HK$12.40, ignoring news Roc Oil (ROC.AU) says talks with Cnooc's parent over development of 2 oil fields in Beibu Gulf (northwest of Hainan province in China) could lead to Cnooc taking over as operator, as outcome from negotiations yet to be confirmed.

But in terms of valuation, Cnooc stock looks pricey, with RBS viewing current level as discounting crude price of about $100/bbl, level RBS expects won't be achieved on consistent basis until 2012-2013.

Notes, Cnooc has strong growth record, but is now faced with having to depend on higher risk deep-water exploration success to achieve growth longer-term. "We believe the positive features of the company's potential are already built into the share price." House starts stock at Sell, sets target at HK$10.40.

Source: Dow Jones Newswire

[winston]

Not vested. From Phillips:-


VALUATION:

CNOOC`s financial position is very healthy with low debt but plenty of cash. This has enabled the company to extend its exploration and development in 2009. At the same time, the high liquidity will benefit the company in terms of acquisition; however, this low leverage may become a dragging force in 2010, as the outlook of the economy is likely to turn around.

Furthermore, the all-in cost price for crude oil has lowered 1.4% to US$19.50/bbl in 1H09. On the other hand, we believe the company`s current P/E ratio (16.32) is relatively high within the industry.

We expect the price of the crude oil will reach at least US$85/bbl in 2010, thus oil field services companies are highly anticipated to benefit from it. As we estimate the P/E of 2010 will be 14.85, and the adjusted EPS will be 0.882, we give CNOOC a rating of “HOLD” with a target price of HK 13.10.


RISK FACTORS:

Downside: Sharp fall of oil price; Major projects delay
Upside: Better than expected oil price

[winston]

Not vested.

CNOOC's 2 Bohai Sea fields start production ahead of schedule By Yvonne Lee

HONG KONG (MarketWatch) -- Cnooc Ltd. (CEO, 0883.HK) said two of its oil and gas fields in China's Bohai Sea started production ahead of schedule.

The Chinese oil producer said in a statement the Jinzhou 25-1 South and the Caofeidian 18-2 oil and gas fields have started production. The Jinzhou 25-1 field, which is located in Liaodong Bay, is expected to reach its peak production at 2012, with oil production at 20,000 barrels and gas production 53 million cubic feet per day, the statement said.

Cnooc said another two oilfields, BoZhong 13-1 and BoZhong 34-1 North, in the Bohai Sea also started production in December. The peak production of both fields will be achieved in 2010 at 12,000 barrels of oil equivalent per day.

Cnooc own a 100% stake in the four fields

http://www.marketwatch.com/story/cnoocs ... 2010-01-02

[winston]

Not vested. I still recall an Analyst who mentioned on TV a while back that this counter is only worth HK$5.

DJ MARKET TALK: Mirae Raises Cnooc Target To HK$15 From HK$12

1036 [Dow Jones] STOCK CALL: Mirae Asset's Gordon Kwan raises Cnooc (0883.HK) target to HK$15 from HK$12 to reflect "increasingly visible" oil/gas reserves additions from Cnooc's deepwater exploration program; keeps Buy rating.

Says for past decade, Cnooc's focus was on shallow water drilling in offshore China, but with higher oil prices justifying advanced technologies, deepwater projects "will hold the key to Cnooc's long-term growth," affirmed by recent gas discoveries by partner Husky Energy (HSE.T) in South China Sea.

Source: Dow Jones Newswire

[winston]

Not vested.

DJ MARKET TALK: Cnooc +2.1%; Positive Growth Prospects - Citi

1111 [Dow Jones] Cnooc (0883.HK) +2.1% at HK$13.32, supported by modest rebound in crude prices Friday, with February crude futures settled +0.1% at $82.75/bbl on Nymex, while crude price staying well above $80/bbl likely to provide more near-term support for Cnooc as an upstream play.

Citigroup ups Cnooc target to HK$12.70 vs HK$8.80, after house raises Cnooc's FY10, FY11 earnings estimates by 42% and 44%, respectively, as it also raising its global oil forecast to $76/bbl, $85/bbl for 2010, 2011.

"We are positive on Cnooc's longer-term growth prospects and strong cost position but see current valuations as pricing in an unreasonably high oil price."

Keeps Sell call. Stock off fresh 52-week high of HK$13.36 earlier.

Dow Jones Newswire

[winston]

Not vested. From UOBKH:-

Valuation/Recommendation

We maintain BUY call with target price raised from HK$13.85 to HK$17.00, representing 15x 2011F PE and 30% upside potential.

CNOOC remains our top pick in the oil sector, given our continued long-term expectation of firm oil prices.

[winston]

Not vested.

DJ MARKET TALK:Macquarie Tips Pricey Acquisitions Ahead For Cnooc

1510 [Dow Jones] STOCK CALL: Macquarie tips sell Cnooc (0883.HK) ahead of potentially pricey acquisitions. Says sizeable acquisitions likely needed to meet production targets, estimates company needs to acquire about US$10 billion in assets over next few years to meet growth targets.

Says Cnooc can grow production from proved reserves through 2012 before succumbing to steep declines, doesn't think declines can be economically offset through increased drilling intensity; tips deepwater production as "too little too late" to meet 6%-10% production growth targets through 2015.

"Prices paid for deepwater assets in 2009 suggest marginal economics at best. We believe sizable acquisitions would push the balance sheet to net debt position and be dilutive in the medium term. We believe CNOOC will use its premium multiple to pay premium valuations accretive only in optimistic long-term scenarios." Keeps at Underperform, target HK$8.25. Shares down 1.3% at HK$12.12.

Source: Dow Jones Newswire