Will have 3 parts in today's presentation. Chairman Wang will have opening remarks and Mr. Xie will give you update on the performance of the first half of twenty twenty one. Afterwards, we'll have a Q and A session. Now, may I pass the floor to Chairman Wang,
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the Dear fellow shareholders and analysts, good afternoon. The The epidemic has resurged recently. I hope that everyone will take appropriate prevention measures the. The Today, I am very delighted to hold the virtual analyst briefing of Cenook Limited's 2021 interim results announcement the and share with you the good performance of Cinook Limited in the first half of this year.
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In the first half of this year, the world economy recovered gradually, the And global oil price went up in fluctuation. Nevertheless, because of the evolving pandemic and OpEx agreement the. C. Wei:] On curtailing production, economy recovery and global oil and gas supply and demand are facing uncertainties.
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the In the face of the complicated external environment, Cenac Limited strengthened the strategic guidance, Steadily promoted production and operation, lifted reserve and production to a new level, maintained a good momentum in exploration With net oil and gas production reaching a record high, which strongly consolidated the resource foundation for the company's high
quality development.
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The most encouraging landmark comes with that Lingxue 17-two, China's 1st large the Independent Offshore Deepwater Gas Fields commenced production successfully on June 25 ahead of schedule, the Marking the historic leap of Sunok Limited's capability towards 1500 meter ultra deepwater.
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The Shanghai No. 1 or Deep Sea 1 Energy Station was put into production. It is the world's first 100,000 tonne deepwater semisubmersible production and storage platform, the which serves the production of Lingxue 17-two gas fields. It was independently designed by CENIC Limited, the where we achieved a number of breakthroughs in key technologies.
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the. These major breakthroughs will effectively improve the company's reserve and production, the Further release the company's potential in natural gas supply capacity and strongly support SinoCo Limited's low carbon development strategy.
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the At the same time, we took actions in line with strength and situation, seized the opportunity of oil price recovery, the Overcame the difficulties brought about by multiple factors, including rising commodity prices and continued to strengthen our cost competitiveness. The Our net profit increased substantially. In the first half of the year, when Brent crude oil prices averaged the USD 65.2 Our net profit reached a level similar to the same period of the years the branch price was above US100 dollars bringing substantial returns to our shareholders. The It is not easy to achieve this remarkable progress. It is a result of collective wisdom and effort of the management and all our staff.
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the In the first half of the year, affected by the U. S. Sanctions, Zeniq Limited confronted pressure in the capital markets, the And our shareholder structure changed greatly. We kept our focus on the business development, sustained good communication with the market. Thus, we secured confidence from the market and further strengthened and developed our shareholder basis.
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the On behalf of the Board of Directors, the I would like to express our sincere thanks to you all. To share with shareholders the results of the company's development, the The Board has decided to pay an interim dividend of HKD0.3 per share for 20 21.
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Looking into the future, I am very confident of the high quality development of Cenook Limited. The We will make unremitting efforts to create value, strive all out efforts for our annual target the and achieve a more excellent annual result. The. We look forward to your continuous attention and support. Thank you.
The Thank you, Mr. Wang. Mr. Xie, please continue.
Good afternoon, ladies and gentlemen. Welcome to Cenk Limited 2021 Interim Results Analyst Briefing. Today, I will share with you our operating and financial performance in the first half of twenty twenty one. The. This side shows the Director and the management at today's meeting.
The. Before we start, please take a moment to read the disclaimer on Slide 3. The. And let's turn to the next slide. Today, we will cover 4 parts.
Firstly, the an overview of macro environment secondly, our operating and financial results for the first half the Thirdly, our performance highlights. And lastly, outlook for the second half. The Let's have a look at the macro environment. In the first half, the We saw a strong global economy recovery. According to the World Bank, the The global and China's economy will grow by 5.6% the the.
At the same time, according to IEA, the global oil demand will grow steadily Global pandemic development Continued to change, making the economic recovery uncertain. The Let's turn to the oil price. International oil price rose significantly in the first half twenty twenty one the. And the average Brent price increased by 54.9% year over year. The We could see oil price beyond 2021 were probably the.
Faced with the complicated environment, the we still achieved remarkable operating results through the concerted efforts of the whole company. The Firstly, Linghui seventy-two gas field was Successfully put into production, this represents a major breakthrough in 1500 meter archer deepwater It depends on exploration and development of the company. In addition, we have achieved significant results the. In the first half, 9 new discoveries were made the And 14 oil and gas structures were successfully appraised. Up to now, 6 new projects the.
C. Wei:] Our successfully came on stream and the net production has reached a new record high. The. Oil and Gas sales revenue increased 51.7% year over year. The Net profit reached RMB 33,330,000,000 the And the EPS was RMB0.75, a strong growth of 2 the 21% year over year.
The table on Slide 12 the Just the summary of the first half results. As you can see, the production of Crude oil and natural gas both maintain a good growth trend. With the increased oil price and the sales volume, the Our sales revenue and the net profit increased significantly year over year. Net production in China the increase year over year, mainly due to the production contribution from new projects. The In offshore China, 7 new discoveries were made and 14 oil and gas structures the We also made 2 new discoveries in overseas.
The The updates of new projects are summarized on Slide 15. The 6 out of 19 new projects planned for this year successfully commenced production. The others are progressing steadily as planned. Slide 16 shows changes of our key financial items. Now, I'll share with you the analysis of the It can be seen that the main factors Driving our net profit are the rise of realized oil price and the sales volume.
The Meanwhile, our financial position remains healthy. Total assets were RMB 7.50 the RMB56 billion, equity increased by RMB23.7 billion the And our Geely ratio decreased to 23%. Our free cash flow amounted to RMB 32,950,000,000. The. Facing the pressure of rising commodity price as well as the RMB appreciation against the U.
S. Dollar. Our all in costs slightly decreased the Compared to the first half of twenty nineteen before the pandemic the And our cost competitiveness is maintained. A closer look at OpEx and DD and A. The OpEx was effectively controlled.
A slight increase year over year was very due to Certain oil fields scheduled overhaul and the change in RMB exchange rate. DD and A also slightly increased year over year, mainly due to the change in production mix and RV exchange rate. The Both items were still lower than the level of the same period of 2019 the. Let's move to the CapEx. In the first half, the.
We steadily promoted exploration and development. CapEx was the RMB 36,000,000,000, 36,000,000,000 to the 40% of the annual CapEx plan, mainly because the workload is lower in the first half the and a certain overseas project behind schedule due to the pandemic development. We mainly we maintained the Annual CapEx budget of RMB 90,000,000,000 to RMB 100,000,000,000. The In light of the healthy cash flow and to reward our shareholders, the The Board has approved an interim dividend of HKD0.30 dollars per share, tax inclusive. The.
Now, I'd like to share with you our performance highlights. To begin with, our net production reached a record high of 278,100,000 BOE the. More importantly, our profitability was increased significantly the With average Brent price of US65.2 dollars per barrel, the. Net profit reached a level similar to the years when average brand price was above the US100 dollars per barrel. As I mentioned earlier, the.
Our major project of Lingxue seventy-two gas field commenced to production successfully. The In the future, it will provide stable gas supply of more than 3,000,000,000 cubic meters for 10 years. The. It will also promote efficient development of surrounding and subsequent gas fields the the. In the first half, we continued to promote the appraisal of mid to large size oil and gas fields the.
And expanded the venture exploration of new areas, new fields, new types and new layers. The In Office of China, we made progress in appraisal of Kanli 10-two, Liudan 10-six, the. The. In Guyana, 2 new discoveries were made in Stabroek Block. The Total recoverable resources has exceeded 9,000,000,000 BOE.
It is expected to be the in the first half, Lingxue 17-two gas field, the Saohuidian six-four oilfield and other projects commenced production ahead of schedule. The Meanwhile, to stabilize the production of producing fields, various measures were taken, the Such as water control, infill drilling, we also accelerate the speed of well drilling and completion the At the same time, We continue to focus on cost control and explore the law of cost reduction and efficiency enhancement the and established cost control system to further strengthen our cost competitiveness. The In the first half, impressive results were made in technology innovation. The Shenhai -one was put into production. It is the water's first 100,000 ton deepwater service submersible production and storage platform, which serves the production of Lingxi's seventeen-two gas field.
The. In addition, new technologies were implemented to assess the development and production. The On low carbon transition, we have implemented entire process of the. C. Wei:] Of energy saving and emission reduction increased proportion of natural gas exploration and development the and consistently promoted onshore power supply projects.
Besides, the We also actively developed new energy business and continue to develop onshore wind power project. The offshore wind power project, not offshore. The. In terms of ESG management, we also attached great importance of the environmental protection, social responsibility and corporate governance. We benchmark with our international peers the published ESG report each year.
As we can see, we have been well recognized the market. Hailside safety are always our top priority. The. We strictly implemented regular prevention and control of pandemic to prevent our staff. The At the same time, we strengthened safety management, completed full inspection of major production facilities the drilling rigs and made regular well control inspections.
The We continuously improved our safety management based on the lessons the. Before we conclude, let's look forward the Looking ahead, we will pursue low carbon development. The We will leverage our competitive advantage to integrate the development of oil and gas business the new energy business. We will also actively explore the diversification of energy structure, Driving the development of offshore wind power project and develop onshore photovoltaic the. The.
In the second half, we will strive to achieve our annual production and operation targets, the. Accelerate oil and gas production growth, strengthen cost control and to create more value to our shareholders. This concludes today's presentation. Thank you.
The call. Thank you, Mr. Xie. We now begin our Q and A session. Ladies and gentlemen, we now
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the star 1 on your telephone touchpad. And our first question comes from Mr. Liu Pei Xian, Citi Securities. Please continue. The the
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Thank you very much for allowing me to be the first to ask questions. I am Liu Pei Tian from Citic Securities. So, first of all, I would also like to congratulate you on the very good results. The Actually, this is the best half yearly result from 2015 till now. My question is this.
The in the first half of this year, your CapEx was around RMB 36,000,000,000. However, earlier on, you gave a full year estimate of RMB90 1,000,000,000 to RMB100 1,000,000,000. And the first half CapEx amount actually fell a dot the short of this yearly estimate, there is a big gap in between. So can you give a guidance for the second half of the year in relation to the CapEx amount? The My second question is related to your dual carbon strategy.
Last year, you announced the carbon neutrality as well as the carbon peaking strategy. The business. So I would like to know whether there are any new updates in relation to the measures that you will put in place and also the plans for the second half of this year.
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Thank you for your question. And the CEO of Synagogue Limited, Mr. Xu Keqiang, will take this question. Well, first of all, thanks for your attention to our CapEx. The The CapEx of the first half of the year was RMB 3.30
the RMB 6,000,000,000.
The It is almost similar to the RMB 35,600,000,000 of last year's same period.
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the As for our capacity building, as just mentioned by our CFO, Mr. Xie Wei Zhu, for the whole year, we have 19 projects to be put into production and most of them will be in the next half of the year.
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So generally speaking, our CapEx the It's according to our schedule. The But we have to admit that because of the COVID-nineteen, some of the progress of our overseas non operator projects is lagging behind. The But generally speaking, the progress is in line with our schedule.
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So for the the Next half of the year, more projects will be put into production in the next half of the year. So in the first half, 6 projects the We'll put into production. And for the next half, 13 projects will be put into production. The So we can say that it is a test and challenge for the management capability of the of our senior management.
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the Despite of the challenges and difficulties, we are confident that we will fulfill our objective of the whole year CapEx target that is RMB 90,000,000,000 to RMB 100,000,000,000.
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Thank you. And
Chairman, Mr. Wang Dong Jing will take your second question.
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the As for the carbon emission peak and carbon neutrality objective, Cenuq Limited has already taken actions. The We have established our professional research institute and we have launched our plan for peaking carbon emission the
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So in the first half of the year, we have already taken a number of actions to promote our transition to a green and low carbon future. The So in the first half of the year, we have taken greater efforts to promote our work in energy saving and carbon emission reduction. The We carry out measures for the carbon emission reduction of the whole process and reduce the waste emission of our onshore facilities. The We also lift the proportion of our natural gas in the whole energy mix. We also turn to onshore power the 5 projects.
And we have already established the Qinghongdao and Taofei Dian demonstration onshore power supply projects.
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the On the other hand, CNOOC has already established its new energy department to expand its new energy business. The Our priority is offshore wind power, and we are promoting the progress of our offshore wind power business and projects.
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In the future, according to our strategic plan of the Of green and low carbon emission and transition, we will build a system for greener and lower carbon future
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Firstly, we will leverage our comparative advantage and integrate the development of oil and gas business the new energy business.
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Secondly, we will continue to increase the supply of natural gas and promote green and low carbon products. The It is estimated that by the year 2025, we will lift the proportion of natural gas in our total production the From the current 20 around over 20% to 35%. The. Thirdly, we will accelerate the construction of green oilfields, focusing on energy saving and carbon reduction the In the entire development process. The.
Fourthly, we will continue to develop our offshore wind power projects the and developed onshore photovoltaic and onshore wind power on a selective basis.
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the. The PD. In the 4th 5 year plan, we are going to spend 5% to 10% of our CapEx to new energy business, the And we expect the yield to reach similar proportion. The We expect that in the future, by 2,050, our non fossil resources will account for the 50 over 50 percent of our total mix.
Before 25th.
20, 50. The
Thank
you.
Thanks, Mr. Wang and Mr. Hsu for the answer and answer the question. Our next question comes from Mr. Toby Shuck, Citibank.
Please continue. The the the
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Congratulations on your excellent results. The I have two questions. The first question is concerning your production volume and the growth rate. Actually, in the first half of the year. Production volume increased fast.
Actually, it was up around 7. Something to 8%. At the beginning of the year, a guidance was given at 5.55 millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters Boe. So in other words, at that estimate, the Then the growth is about 5%. For the second half of the year, as said just now, there are 13 new projects that will commence production.
The So at the end of the year, do you think that the actual production volume will even be higher than the 5 55 millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters millimeters Boe guidance given the business at the beginning of the year. My second question is about your new energy development and also offshore wind power. The in the first half of the year, how much of your profit, what is the percentage of your profit is derived from wind power? In the future, I understand that there will be 1 to 2 more new projects coming up. Can you elaborate on more details?
The I know that by 2025, as such is now, 5% to 10% of your profitability should come from wind power and in 2,050, the 50%. So can you elaborate more on your wind power development, please? Thank you.
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Thank you. And CEO of Cenook Limited will take the Mr. Xu Keqiang will take your first question. The In the first half of this year, our net production reached 278,100,000 BOE. The.
It represents an increase of 7.9% year on year. The On the one hand, it can be attributable the In recent years, we've making and remitting efforts to the work of the injection work of old oil prices oil fields.
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So we consolidate the stabilization of the Of the production of old oil prices oil fuels. The At the same time, we also tapped the production capability of our capacity building projects. The So we can say that within half of the year, we already achieved half of our annual production target. The For the next half of the year, we can see a lot of uncertainties of the development of COVID-nineteen.
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and also the 13 projects the commencement of production in the next year will also bring a lot of challenges to our resource allocations. The So currently, we will not adjust our annual production target. The But the management of Cinook Limited has the confidence to fulfill our annual production target the That is 500,000,000 to 45,000,000 to 5 55,000,000 BOE.
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the. And of course, if the in the next half of the year, the COVID-nineteen situation will be better and there will be the Fewer typhoons and the capability of the management will be further lifted. I believe both you and me will welcome better results.
The Thank
you.
For your second question, Chairman of Synucle Limited, Mr. Wangdong Jin will take this question.
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the. For Cinook Limited, new energy business is still a new field. The Last September, Xinyu's first offshore wind power project located in the sea area near Jiangsu was connected to the grid the The capacity of this project is 300,000 Gigawatts. The
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the By far, we have achieved quite good yield from our offshore wind power project. But since it is the first the offshore wind power project of Cinook Limited. So the size and scale of the project is relatively small compared to our other projects. The According to our preliminary plan, in the 4th 5 year plan, we will gain the 500 to 1000 gigawatt resources from offshore wind power. The And our power generated will reach 1,500,000 gigawatts.
The. And in the future, we will gradually increase our investment in offshore wind power. Thank you.
The Thanks, Mr. Wang and Mr. Hsu for the answer and also the question. Our last question is from Lu Chen, CICP. Please continue.
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Let me introduce myself first. I am Lou the Chen from CICC. I have three questions. The first question is about dividend payout in the first half of the year. The in the first half, your dividend is at around KRW0.30 per share.
And if you do the year on year comparison with last year, then it is round about 7.9%, more or less at the same level. The And I would like to know about your dividend and return to shareholders for the future. Is it true that your dividend policy is going to be guided based on your dividend payout. And if you talk about investors in the mainland, the will there be some changes in relation to return to shareholders? My second question is about realization of natural gas price.
The Is there any correlation or any mechanism in between domestic and international natural gas price? The Well, if so, what is the level and what is the mode of such mechanism? Let's say if international natural gas price is rising, Then in the second half of the year, is it true that natural gas price for CNOOC will also rise? My the The third question is related to your onshore solar photovoltaic energy and wind power strategy. The So in relation to your new energy development, what are your competitive advantages?
And what are your coming plans and strategies the
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Thank you. And CFO of Cinook Limited, Mr. Xie Wei Ju will take your first question. The. In the opening speech of Chairman, Mr.
Wangzheng Jin, the He mentioned that the Board has decided to pay HKD 30 dividend the For the interim revenue, interim return to the shareholders, and the payout rate is 7.1%. The So this result is our consideration about both the return to shareholders and our long term development. The. And we also did a benchmark with our peer companies. The As for the payout ratio compared with that of the E and P companies that we have did some research, the Actually, we are in the leading position.
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Taking the international large the In terms of payout ratio, actually, we're still in the leading position. We are in top 3. We also note that there are more Chinese investors who buy our shares.
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And we will enhance our communication the With our domestic shareholders to see their opinions of our dividend payout through roadshow. The As always, we will balance the relationship between the return to our shareholders and the company's long term development.
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Chairman of Cenook Limited, Mr. Wang Dong Ding will take your second and third question. The the. The As for the price of natural gas, recently, with the growth of domestic economy, we can see in the natural gas market that the Even in the lower season, we can still see a very sound demand of natural gas.
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There is a correlation between the domestic natural gas price and international LNG price, but they are not the same.
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the. Currently, we can see that this year, the The demand and price of domestic natural gas
is better than previous.
The For the whole year, we might see a very good performance in the sales and revenue or profit of natural gas. The As for your third question about onshore photo work colleague.
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the Our plan for the onshore volcanic is to explore and develop the concentrated water volcanic projects, the And it will be carried out through the partnership with large companies.
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the. As for the Distributed Water Volcanic Business, the We will leverage our advantage in the integration and synergize of energy and distributed water water intake the the. Currently, among all the new energy the types. Photovoltaic has a very competitive cost.
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the Even without the subsidies of the subsidies of the government. The photovoltaic is still competitive in price the Even compared with coal fired plants and more importantly, it is a clean energy.
The Thank you.
Thanks, Mr. Wang and Mr. Xie for this answer. And also we appreciate all the questions. The call.
Ladies and gentlemen, this concludes today's presentation. Thank you very much for your attendance and we hope to see you very soon. Goodbye.