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Dow Jones Newswires: CNOOC shares gain after surge in first-quarter net profit

Shares of Chinese oil major CNOOC Ltd.

gained in early Friday trade after its first-quarter net profit more than doubled on higher global oil prices.

The stock is leading gains on the benchmark Hang Seng Index
rising as much as 7.4% even as the broader index fell. The stock was last 4.2% higher at HK$11.30, while the HSI was 0.5% lower at 20164.08.

CNOOC’s net profit for the period more than doubled on year to 34.30 billion yuan (US$5.18 billion). CNOOC’s quarterly operating income grew 74% to CNY90.90 billion.

The company said results were stronger due to higher oil prices and increased sales volumes. Its net production in the first quarter was 151.0 million barrels of oil equivalent, up 9.6% on year.

Analysts from Citi said CNOOC’s realized oil price of $97.5 a barrel was higher than they expected. The analysts added that even though CNOOC’s costs rose, they remain “very competitive in an over-$100/bbl oil price environment.”

Given oil prices are hovering at $100/bbl or above, the Citi analysts reckon that CNOOC, as a pure upstream play with 80% of its production in crude, is the most exposed among its peers to rising oil prices.

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