Good afternoon, ladies and gentlemen. Welcome to CNOOC Limited's 2024 interim result announcement. I'm pleased to present Mr. Zhou Xinhuai, Vice Chairman, CEO, and President of the company. Mr. Lin Boqiang, Independent Non-Executive Director of the company. Ms. Wang Xin, CFO of the company. And Mr. Xu Yugao, Joint Company Secretary of the company. We'll have three parts in today's presentation. Mr. Zhou will deliver opening remarks, and Ms. Wang will give you update on the performance of the first half of 2024. Afterwards, we'll have a Q&A session. Now, may I pass the floor to Mr. Zhou?
Good afternoon, everyone, dear investors and analysts. I am very pleased to meet you all here in Hong Kong again, and on behalf of the Board of Directors and Management of CNOOC, I would like to thank you all for coming here today. In the first half of 2024, we focused on increasing reserves and production on one hand, whilst improving quality and efficiency on the other hand, and the main operating indicators all hit record highs, once again, presenting a satisfactory result to the shareholders. We continue to promote the growth in reserve and production with the resource base continuously being strengthened. We continue to make breakthroughs in exploration theories and technologies, and guided a number of new oil and gas discoveries.
We successfully explored and discovered the first ultra-deep water and ultra-shallow 100 billion cubic meters of gas field, Lingshui 36-1, marking the first realization of a trillion gas area in the South China Sea. Domestic and overseas oil and gas production both increased significantly, both exceeding the best results in the same period in history, laying a solid foundation for accomplishing the annual product target. And as I say, this has laid a solid foundation for us to continue to achieve the whole year's production target. We realized the important breakthroughs in scientific and technological innovation, and our core competitiveness continues to grow. The Enping 21-4 oil field is successfully implemented China's first ultra-deep extended reach well, which greatly improved the development efficiency of the oil fields compared with the traditional development model.
The Liuhua 11-1/4-1 oil field secondary development project innovatively adopted the deepwater jacket platform, plus cylindrical FPSO development model, which provides a brand-new solution for the efficient development of deepwater oil and gas fields in Chinese waters. This has also provided some examples and experience that could be utilized and referenced to for overseas similar projects, that further down the road. We are committed to improving quality and efficiency, and steadily improve the quality of our development. We have achieved effective control of all-in cost and further consolidation of cost competitiveness. While maintaining strong profitability, the company achieved a net attributable profit of RMB 79.7 billion, up 25% year-on-year, and a record high for the same period in our history.
This is against the backdrop of a 4.4% year-on-year increase in Brent oil price. In order to actively reward our shareholders, the board of directors have decided to pay an interim dividend of HKD 0.74 per share, tax inclusive, for the first half of 2024. Looking ahead to the second half of this year, actually, it's been almost two months. We will resolutely continue to achieve all the new highs in reserves and production growth, making new progress in cost reduction, quality improvement, and efficiency enhancement, while striving to make every effort to fulfill our annual production and operation targets, so as to create higher value returns for our shareholders. Thank you very much.
Thank you, Mr. Zhou. Ms. Wang, please continue.
Good afternoon, ladies and gentlemen. Welcome to CNOOC Limited 2024 interim results analyst briefing. Today, we will share with you our operating and financial results for the first half of 2024 . This slide shows the directors and the management at today's conference. Before we begin, please take a moment to read the disclaimer on slide three. Let's turn to the next slide. Today's presentation consists of three parts. First, I will start with an overview of our operating results, then a more detailed discussion of business highlights, and finally, a look into our 2024 targets. Now, let's have a look at the operating and financial results in the first half of 2024 . In the first half of 2024, we achieved significant growth in reserves, production, and value creation. The main operating indicators hit record highs, and the safety and environmental protection level improved steadily.
Our net production amounted to 362.6 million BOE, up 9.3% year-over-year. 7 new discoveries were made, and 18 oil and gas structures were successfully appraised. As for financial performance, the oil and gas sales revenue was RMB 185.1 billion. All-in cost was well controlled at $27.75 per BOE. Due to the increase of production and the cost control, our net profit attributable to equity shareholders amounted to RMB 79.7 billion, up 25% year-over-year, although oil price increased 4.4% only. To share development results with our shareholders, the board has approved an interim dividend of 0.74 HKD per share, tax inclusive. We made great efforts to increase reserves and production, cost control, and enhance efficiency, maintaining strong value creation capability....
This slide shows our last ten years' financial and operating results. Compared to 2015, our net production increased by 51%. All-in costs per BOE decreased by 33%. In the first half of 2024, oil price was not the highest during the same period, but the profit, net profit, hitting a record high for the period. The highest oil price in the last ten years was $104.9 per barrel in 2021, 2022. Compared to the same period in 2022, the net profit increased by 10.9%, although Brent oil prices fell by 20.5%. The decrease of net profit was mainly derived by net production growth by 19% and good cost control by lower 8.5%.
Next, I'd like to share with you the business highlights and the key measures we adopted in the first half of 2024. Thanks to the theoretical and technological in exploration breakthroughs, the company has achieved fruitful exploration results. In the first half of this year, under the guidance of the innovation in theoretical and technological approaches for deep oil and gas exploration in Bohai, we made a new discovery of Longkou 7-1, and successfully appraised Bozhong 8-3 South. So far, this exploration theory and technology has guided us to discover seven oil fields, each with proved in place over 100 million tons, such as Bozhong 26-6 and Penglai 9-1. The exploration and development has expanded from shallow play to deep and complex area in Bohai, creating new growth drivers to increase reserves and production.
Benefiting from the innovation in forming theory on ultra-shallow gas reservoir, we made a new discovery of Lingshui 36-1 this year. It is the first discovery of ultra-deep water and ultra-shallow play in China. With the breakthrough in geological understanding of deep plays in Beibu Gulf Basin, we successfully appraised Wushi 16-5. It is expected to become a medium-sized oil field. Besides, I have another good news to share with you. The South China Sea, trillion cubic meters gas region, was realized through the new discovery of Lingshui 36-1. It took over thirty years of unremitting efforts to realize the exploration milestone, which has painted a bright and colorful picture for our natural gas development. Overseas, we focus on countries on both sides of the Atlantic and along the Belt and R oad. We made a 100 million ton new discovery of Bluefin in Stabroek Block in Guyana.
The block's total recoverable resources are approximately 11 billion BOE, and now daily production is more than 630,000 barrels per day with three projects. According to operator, the application of the seventh development project has been submitted with anticipated start-up in 2029. In addition, we signed the petroleum exploration and production concession contracts for five onshore blocks in Mozambique in the first half of this year. Our net production hit a record high for the same period, reaching 362.6 million BOE, with strong growth in both China and overseas. Growth in China, mainly attributable to increased production from oil and gas fields from Bohai, such as Kenli 6-1 and Bozhong 19-6. Overseas growth, mainly driven by production from newly onstream project, Payara in Guyana. Our refined management ensures stable and increased production from the producing fields.
Innovation year adjustment measures attribute to significant production growth. For example, Wenchang 8-3 oil field main area adjustment well project increased production effectively. Its daily production increased by 297% to nearly 800 cubic meters. OPEX decreased substantially by 47.8%, and the recovery rate increased by 14.7% to the best level in history. Four new projects planned for this year have commenced production and others are progressed well. Bozhong 19-6 gas field, 13-2 Block 5 well site development project is a part of Bozhong 19-6 project, which is the first large-scale integrated condensate gas field, with proved in-place volume of over 100 billion cubic meters in Bohai.
The project's proved in-place volume of natural gas exists, exceeded 360 million tons of oil equivalent, and three projects have been brought on stream, with daily production of nearly forty thousand BOE per day, and cumulative production of natural gas exceeding one billion cubic meters. Suizhong 36-1, Luda 5-2 oil field, secondary adjustment and development project commenced production in April. It is expected to reach peak production of about thirty thousand BOE per day in 2025, which will open a new era of second comprehensive adjustment of large-sized oil fields. Wushi 23-5 oil field's development project commenced production in July. It is the first comprehensive green design oil field offshore China, which is expected to reach peak production of about eighteen thousand BOE per day in 2026.
It's also the first oil field in the South China Sea, supplied with power from shore. In terms of scientific and technological innovation, we successfully drilled China's first offshore ultra-deep extended reach well, and developed key technologies for deepwater jacket platform and the cylindrical FPSO, which provided a new solution for the efficient development of deepwater oil and gas fields in Chinese waters. While focusing our core business of oil and gas, we promoted the integrated development of oil and gas and new energy. The world's first 5-megawatt offshore high-temperature flue gas waste heat power generation plant was completed. Suizhong, Jinzhou onshore power project was put into operation, making the completion of the world's largest onshore power application base for offshore oil fields.
Offshore oil and gas fields have completed full recovery and utilization of flare gas, with a capacity of over 50,000 cubic meters per day. We continue to strengthen energy replacement by using green electricity of more than 400 million kilowatt-hours. Now, let's go through the key operating indicators. During the period, the company's realized oil and gas price was basically in line with the market trend. Both sales revenue of oil and gas and net profit attributable to equity shareholders reached record highs in the same period. Slide 22 shows the change analysis of net profit attributable to equity shareholders. The main factors driving the increase were higher realized price and increased production. In the first half, the company maintained a strong cash position with free cash flow of CNY 63.99 billion. The financial condition of the company remained healthy.
Shareholders' equity increased by RMB 55 billion compared with the beginning of the period. Total assets exceeded RMB 1 trillion, and the gearing ratio further dropped to 11.4%. During the period, all-in cost per BOE was well controlled at $27.75 per BOE. DD&A decreased by 1.4% year-over-year, mainly due to the changes in exchange rates. OPEX was well controlled, mainly attributable to production growth and changes in exchange rates. We continue to promote quality and efficiency enhancement and cost control. The all-round cost control system played an active role. We adhere to implement oil price of $35 per barrel stress testing when we make investment decisions, thus improving risk resistance. We promoted our value-driven management concept overseas. The Long Lake project in Canada has achieved remarkable results in cost reduction and efficiency enhancement.
Compared to 2014, the project's production doubled. All-in cost decreased by 73%, lower than the company's average level. The opening of the TMX has boosted the realized price, and the net profit increased by 137% year-over-year in the first half of 2024. Long Lake project has become a good example of how we convert underground resources into cash flow effectively. Now, let's look at capital expenditure. In the first half of the year, capital expenditure completed 47%-51% of the annual budget, an increase of 11.7% year-over-year, mainly due to the increased workload of projects under construction. The company always attaches importance to the shareholders' returns and actively share the development results with our shareholders.
The board has approved an interim dividend of HKD 0.74 per share, tax inclusive, hitting a record high for the same period, with the payout ratio of 40.3%. Overall, the interim dividend per share up 25.4% year-over-year, and triple of 10 years ago. In July, we also repurchased and canceled more than 16 million Hong Kong shares. Finally, let's review the company's business strategy and targets for 2024. In the second half, we will focus on reserves and production growth, technological innovation, and green development, and implement quality and efficiency enhancement measures. Meanwhile, we would actively and prudently respond to uncertainties and potential risks, press ahead with operation to reach annual targets, and create greater value for shareholders. This concludes my presentation. Thanks.
Thank you, Ms. Wang, for your elaboration. Ladies and gentlemen, we now begin our Q&A session. If you would like to ask question, please raise up your hand or press star one. Press star one on your telephone touchpad if you are joining us through our telecom system. Prior to asking questions, please briefly introduce yourself and the company you're representing. We appreciate your cooperation. First question is the lady in the second row. Hold on one second. We use the microphone.
Thank you very much for giving me this opportunity to ask the question. My name is Guo Yifan from UBS Securities, and first of all, I would like to congratulate the company and management team for achieving such a great historical record! And I have two questions here, and the first one is that I can see that the production for both oil and gas have increased quite a lot. And actually, the speed of the increase is faster than the whole year guidance that was given. And I'd like to ask, is this because that the company has taken a more conservative and prudent attitude because of the more unpredictable factors that could happen in the second half of the year, such as typhoons, et cetera?
Secondly, we can also see that there's a lot of offshore gas development. I'd like to ask about in terms of our onshore gas project, and for instance, with the CBM and the cost, et cetera, as well as the further development and further growth in this area. Thank you.
[Foreign language] Oh, yes, yes, yes, sorry. Thank you very much for your questions, and you're also our old friend, and thank you for your attention and support that you have given to CNOOC all this time. For first half of this year, as you have said, in terms of production, we have performed very well in both domestically as well as overseas. Of course, this was not an easy result, and this was thanks to the efforts and hard work of the management team, our employees, both inside China and outside of China, and this is a result of everybody's concerted effort.
In addition, we're also very grateful to the weather for first half of this year. I would say that this is a great situation whereby the opportunities externally as well as in terms of our human resources, all these elements have come together and which has led to this results that we're seeing now, which is beyond our expectation. For second half of this year, we're now two months into the second half of this year. In terms of the guidance that we have given out, and this is the bottom line that we would like to achieve, and with our better controlling model, and we hope for sure that at least we would be able to achieve the bottom line of the guidance given. As you say, in the second half of the year, there still exists a lot of uncertainties, such as weather and typhoons.
However, we are still very confident that we would be able to achieve the annual target set out in the beginning of the year, in a very high quality fashion, and of course, we also look forward to even better performance to reward our investors and shareholders. [Foreign language] In addition, for CNOOC, we continue to believe in high quality production as well as the development in a scientific fashion. So we're not only simply looking at the production of this year and next year, and then we don't really think about what happens the year after. Rather, the situation is that we start thinking about for the first five years, make plans for the next three years, and do very well in the current year.
So we focus on a balance between our reserves, our production, as well as the profit of the company. And second question, and in terms of the domestic natural gas production, of course, we have a better growth intentions for the future. And in terms of this year for both onshore and offshore, our goal is to continue to grow, in China, indeed, for the onshore part of the business, and we do have some unconventional cost. I would like to say that, however, our cost is very competitive. I'm not in a position to share with you the further details of the specific number, but I can tell you that we are very cost competitive. And in terms of the base of the reserves, I can tell investors, please rest assured, we do have the capability of a further growing.
And for onshore business, considering the environment and the general operating environment and OPEX etc., there will be quite a lot of impact, and these are things that we will be able to further resolve, and these are very good foundations that the company already has. In terms of improving production for the onshore gas field, we are very confident and we have the capability to realize a fast, effective and high quality production.
Thank you. This question is taken by Mr. Zhou Xinhuai, Vice Chairman, CEO, and President of the company, and we're ready for our next question. The gentleman in the second row.
[Foreign language] Thank you for management giving me this opportunity to ask questions. And, first of all, I would like to congratulate the management on such a great results for first half of this year. I have two questions, and the first question is with regard to the bond of the company. And we can see that for first half of the year, the company has repurchased bond up to about CNY 20 billion, and the size is quite big. And we do understand that at the moment, you still have some certain existing bond and at a quite high cost. And what is your plan for such bond going forward? In addition, domestically in China, we know that the financing cost is relatively lower. Would you consider about paying back the overseas bond with a domestic, financing at a lower cost?
And if you were to do so with the new financing round, and what sort of, financing cost is something that you would consider reasonable? And my second question is that, for the company, we still have a very, ample cash on hand in your account, and, what do you plan to do with such cash? Would you consider about repurchasing the company's shares, or repurchasing the bond that is out there, or pay back some of the bond, etc.? Thank you.
[Foreign language] Thank you for your question. I'll take your first question and in terms of the bond for first half of this year, we have a maturing bond of $2.2 billion and that came to a natural mature expiry date. In addition, we have also repurchased a bond that is with a value of $900 million, and this is at a relatively high cost. [Foreign language] So with respect to the high interest bonds that we had repurchased, and this occurred at the time when we made the acquisition of Nexen, and this was a bond that Nexen had taken on, and so we inherited this.
[Foreign language] You can see that with these bonds from Nexen and the maturity is actually very long up to thirty years and with very high value. However, rest assured, do not worry because these bonds, when we were making acquisition of Nexen, they have been revalued and the current value is no longer what it seems. [Foreign language] For the bonds that we had repurchased for first half of this year, and we had been able to do so to grasp this opportunity before the Fed cuts. [Foreign language] I believe that you may also know the repurchasing of a bond is quite a complicated matter, and it is not as simple as paying down a loan. We also need to have the willingness from the bond holders to be willing to sell it to us.
[Foreign language] All in all, and this was the maximum amount of the bond that we were able to repurchase at that time. And in our accounts, actually, there is a reflection of a small gain actually. [Foreign language] In addition, as what you have mentioned in terms of the low cost of financing options in domestic China as well as, swapping them for certain different tools and all of these options are within our consideration. And we need to make sure that we take all factors into consideration, such as the need that we have for different currencies, maturities, et cetera, and we strive to achieve a balance between all of these factors.
[Foreign language] Second question with respect to the ample cash on hand, held by the company. And again, this is a balancing act of the company that we need to take a careful considerations. And we need to be considering about the CapEx of the company, especially in the backdrop of the uncertain oil prices. And we need to think about the dividend payout, repurchasing of shares or bond swapping. And overall speaking, we will be re-evaluating the whole situation and ensuring a very balanced, decision to be made to ensure the safe development of the company in the long run.
[Foreign language] Thank you very much.
[Foreign language] Let me also supplement just one more point and with respect to cash. I think that we need to look at this issue philosophically and without any development. Having cash on hand and simply distributing cash to investors or shareholders is meaningless, because what we really want to see is number one, very good growth of the company and number two, we want to have high quality projects and simply having cash sitting there, this doesn't mean anything, and what we want to see is that we would be able to utilize the cash with good investment opportunities in high quality projects, and placing your money with our company is very safe, because we are a compliant company and we do our business very prudently. Thank you.
Thank you. This question is mainly answered by Miss Wang Xin, CFO of the company. The add is taken by Mr. Zhou Xinhuai, Vice Chairman, CEO, and President of the company. We are ready for next question. The gentleman in the first row.
Management, hello. Congratulations to the company for achieving such good results. I am Lu Hongliang, energy industry analyst from Morgan Stanley. I have two questions. My first question is regarding the exploration and development of the Guyana block. We see the current 600,000-plus barrels per day production rate is very good. Then in the future it can also increase to 1.2, 1.3 million barrels per day. That is a very explosive growth. I want to ask, now the Guyana government, its mining rights fee, will it correspondingly be adjusted? Then, Guyana now is in a relatively high-speed production growth period, so it's hard to estimate the exploration and development per barrel of oil cost. That is to say, when it reaches 1.2, 1.3 million barrels per day normalized production, management estimates the entire exploration and development barrel oil cost approximately should be in what range?
This is my first question. Second question is, the Mozambique block looks like it also is a very potential block. I also want to know management now. [Foreign language]
Thank you. First of all, I would like to congratulate the company and management team on such great results for the first half of this year. My name is Lu Hongliang. I'm from Morgan Stanley, and I'm with the energy sector group. I have two questions here. My first question is with respect to the Guyana project, and we can see that right now with the exploration and development, it's been very successful, and we have been able to achieve 600 thousand barrels per day.
Looking forward, we are looking at one point two to one point three million BPD, and this is really an explosive growth. I'd like to ask about in terms of the mining royalty cost and what is it at the moment, and the all-in cost in Guyana and going forward, one day, one point two to one point three million BPD becomes a regular reality, and what will the cost then be for exploration and development? My second question is with respect to the Mozambique blocks, and I do see that this is a great project, and what is the schedule for the project to officially start and put into production? My second question for Mozambique is that what is the potential of this Mozambique block that the company is looking at? For instance, going forward, what is the production potential and the cost, etc.? Thank you.
[Foreign language] Thank you very much for your question, and this really is a very high quality question. And your first part with respect to Guyana, and I would say that for the most recent decade, and I cannot say that this is the best, but this is almost the best on a global scale, a major discovery, and with great production increasing very fast, and this is thanks to the hard work and concerted effort by ExxonMobil, Total and CNOOC. And this has also brought the Guyana country with great potential for future development and wealth. And the Guyana government is a stable government. They are very grateful to our work, locally on site, and they are a government with integrity.
Therefore, for the Guyana blocks, and I would say that this is a very stable project with greater, with great reliability and a great commitment from their local government. [Foreign language] And of course, this is the first contract ever, and, so as a first contract, so to speak, for somebody who is tasting the crab for the first time, and this will be different, versus the contracts further down the line. However, what I would like to say is that this contract itself still follows the economic philosophy and the economic rules, as well as, it is completely legal.
[Foreign language] For the Guyana government, and of course, as I say, with the contract, and it is the first ever contract, there is a process of the contract gradually catching up and becoming more mature with the government. The Guyana government so far have already announced that there will be six production lines and with a capacity of 50,000 bpd for the first line. We are also carrying out our research, and ExxonMobil have also recently announced that we're giving the market some ideas that they're about to make the FID decisions. All these work that is being carried out follows the IFRS accounting rules, and in terms of the amortization of the cost and the calculation of the profit, et cetera. Please rest assured, these are all up to standard.
I'm not really in the position to disclose to you about the specific cost structure. However, what I can tell you is that this will be, in terms of the cost, globally speaking, on a very competitive scale. [Foreign language] In the meantime, for the resources under the ground, and it is really too rich and too amazing, and what I can say is that as the production stabilizes and the early stage amortization of the cost is quite large. However, as the production stabilizes and with the cost which can be further optimized, and I can tell you that our cost competitiveness will be further enhanced.
[Foreign language] In the meantime, for your second question with respect to Mozambique, and if we look at it from a geological perspective, and this indeed is a region that is very rich in oil resources, despite the fact that there is very limited materials, and however, based on what we have now, and we can see that in terms of the exploration and the discovery potential, there is a lot for us to look forward to, and this is located in the basin area, and we are more towards the southern part, and towards the northern part, there have already been major large discoveries, and given the fact that we are still in the early stage, we're not really in the position to provide further comments on this.
However, I can tell you that, based on the evaluation done by our partners, and they have concluded that, for this block that we have in Mozambique, and they have a very high expectations, and we, of course, will work very hard, and we hope that we can deliver, great surprises to all our shareholders.
This question is taken by Mr. Zhou Xinhuai, Vice Chairman, CEO, and President of the company. Due to the time limit, ladies and gentlemen, this concludes today's presentation. We thank you very much for your attendance and support. Hope to see you very soon. Goodbye.