CNOOC: A confusing picture

|About: CNOOC Limited (CEO)|By:, SA News Editor

Deutsche Bank analysts say they left Cnooc's (CEO) investor meeting following Friday's soft earnings scratching their heads.

"There was talk of CNOOC "the exploration company," which defies the PSC-structure and history. The "new discovery" on deep water Lingshui 17-2 was offered as evidence, although we question the choice of words. CNOOC suggested that it had been exploring deep water for only two years – least we forget the Liwan discovery in August 2006. There was focus on the (mostly acquired) RRR of 327 and 10.8 years of reserve life; peer average FY12 was 12.1-years. There was a comment about focusing on "organic growth" – some of CNOOC’s best assets came from M&A: MEG, OML-130, Lake Albert (maybe). There was a comment about efficiency and reducing costs and we remember earlier comments about perusing off shore China deep water exploration and the endless rise in Capex. Where are we going, gentlemen?"