China Oilfield Services Limited announces H1 2013 interim results
China Oilfield Services Limited (“COSL”), announced its unaudited results for the six months ended 30 June 2013 and was able to maintain a sustainable and rapid growth momentum during the period under review, said in the company's press release.
During the first half of 2013, a volatile global economy, coupled with jittery oil prices, posed challenges to the Group's operating environment. Faced with these challenges, the Group adopted a market oriented approach and optimized allocation of its resource. Moreover, the Group actively consolidated its leading presences and met growing demand in existing markets while continuously exploring overseas markets. For the first time in the Group's history, the growth in revenue from overseas markets surpassed that of the domestic markets. Benefiting from full capacity utilization for both domestic and overseas operations, as well as commencement of operation of new equipment, the Group's revenue for the six months under review reached RMB12,441.0 million, up 24.3% from RMB10,010.6 million for the last corresponding period. Profit from operations during the period reached RMB3,646.6 million, up RMB697.3 million or 23.6% year on year. Profit attributable to shareholders for the six-month period surged 32.6% year on year to RMB3,180.3 million. Basic earnings per share were RMB71 cents (1H2012: RMB53 cents).
On Drilling Services, the Group chartered NH7, a semi-submersible drilling rig, and KANTAN II, a jack-up drilling rig, to meet the needs for drilling rigs in the domestic markets. COSLPromotor, a semi-submersible drilling rig successfully delivered last year, completed preparation and began serving an eight-year contract for Statoil, a Norwegian national petroleum company, Norwegian North Sea. As these three rigs were all deployed for operations, COSL saw a significant enhancement in its drilling service capability during the period under review.
As of 30 June 2013, the Group operated and managed a total of 37 drilling rigs (including 28 jack-up drilling rigs and 9 semi-submersible drilling rigs), of which 11 were operating in the Bohai region, 10 in China South Sea, 1 in China East Sea; and 14 in overseas waters including Norwegian North Sea, Gulf of Mexico, Indonesia, the Middle East, Australia and other countries while 1 was undergoing maintenance abroad.
During the period, drilling rigs of the Group achieved 6,090 operation days, up 732 days year on year. The jack-up drilling rigs operated 164 more days year on year due to the addition of 38 operating days as a result of the newly chartered KANTAN II and BH8, having returned from pre-operation preparation from overseas, added another 156 operating days year on year. Maintenance of COSLPower resulted in 57 fewer days while other drilling rigs contributed 27 additional days. The semi-submersible drilling rigs operated 568 more days year on year as COSLInnovator and NH8, which had commenced operation since late last year, added 168 days and 171 days respectively, while NH7 and COSLPromoter, delivered during the first half of 2013, added 108 days and 89 days respectively. Operation of other drilling rigs added another 32 days. Benefiting from the reduction in time spent in maintenance and preparation, the calendar-day utilization rate of the drilling rigs for the first half of 2013 added 2.5 percentage points from that of last year, reaching 95.3%.
As for service fees, the average daily income of the Group's drilling rigs increased year on year, due to deployment of new semi-submersible drilling rigs and the higher average day income of accommodation rigs. The average day rate of drilling rigs during the period under review stood at US$169,000, up 23.4% year on year from US$137,000 for same time last year.
The two accommodation rigs of the Group continued to serve clients in North Sea, and achieved 362 operation days during the period under review, translating into available-day and calendar day utilization rates of 100.0%.
The four module rigs deployed in Gulf of Mexico recorded 16 fewer days at 707 operation days due to major maintenance works during the period under review and operated at a calendar-day utilization rate of 97.0%, down 2.3 percentage points year on year.
Well Services accomplished further achievements in research and development during the first half of 2013. The application of the multi-component thermal fluid thermal recovery technology on extraction of extra-heavy oil achieved initial success and provided an effective means of extraction and a technical direction for development of offshore extra-heavy oil. EMRT, a nuclear magnetic resonance logging tool developed in-house by COSL, had successfully performed a breakthrough logging operation in China South Sea. FLIIS, a self-developed software, has obtained a national trademark registration and will provide strong technical support for rapid assessment of efficacy in oilfield development. A new operation contract in cement had been signed with an Indonesia company amid fierce competition, thereby established a strong footing for diversification of customers and market expansion in that region.
On Marine Support and Transportation Services, the Group continued its focus on domestic waters and strict adherence to safe operation procedures. Apart from consolidating its presence in the existing markets, the Group strategically enhanced service its capabilities with reasonable deployment of selected resources. During the first half of 2013, the chartered vessels achieved 7,030 operating days, up 1,676 days year on year. For the first half, benefiting from fewer days spent in maintenance, the utilization rate of the Group's self-owned vessels was at 94.2%, up 3.3 percentage points year on year. Moreover, In order to address China's demand for offshore oil and gas exploration and development, and enhance its deepwater service capabilities, the Group signed contracts to construct 15 vessels, which are expected to be delivered in 2015.The Group achieved an aggregate freight volume of 940,000 tons for its oil tankers during the six months under review, up 8,000 tons from 932,000 tons last year. The aggregate freight volume for its chemical carriers decreased to 955,000 tons, down 185,000 tons from 1,140,000 tons for the same period in 2012.
On Geophysical and Surveying Services, the Group saw significant growths in 2D collection volume and data processing operation volume. 2D collection volume increased by 3,908 km year on year, mainly due to the early commencement of operation by NH502 and a concentration in operation sites within a small region that allowed more efficient switchover from one operation to another, which increased the operation volume of the vessel by 3,445 km. 2D data processing operation volume increased 2,795 km year on year resulting from the higher 2D collection volume. 3D collection volume decreased 760 km2 year on year, mainly because the overseas operation of HYSY719 earlier in the year required longer pre-operation launch and post-operation recovery time, leading to a decrease of 1,232 km2 in operation volume, and an additional decline of 927 km2 due to annual overhaul for HYSY720 after returning from an overseas operation. On the other hand, the heavy demand for services from BH511 and HYSY718 in their respective operation regions, and their enhanced efficiency contributed to an aggregate increase of 1,620 km2 in operation volume for the period under review. Furthermore, with an aim to enhance deepwater service capabilities of the Group, COSL signed a construction contract for the 12-streamer seismic vessel HYSY721, which is expected to be delivered and commence operation in the second half of 2014. The addition of HYSY721 will further enhance the equipment structure of the geophysical collection services segment.
In the first half of 2013, the Group's deepwater engineering survey vessel HYSY708, completed the recall and installation operation of Christmas trees for a client's development project at depths of about 1,500 meters, a move that pioneered a new model of installation model of Christmas trees for deepwater oil and gas fields, contributing significantly to COSL's deepwater service capabilities.
Mr. Li Yong, CEO and Executive Vice President of COSL, concluded: “Against a backdrop of growing demand in both domestic and overseas markets, the Group takes advantage of this favorable timing for market expansions, proactively boosting efficiency of the existing equipment and enhanced capacities by adding new equipment; thus accomplished rapid in both markets in the first half of 2013. Looking ahead into the second half of the year, the Group will grasp opportunities brought about by the newly added businesses and addition of new capacities. While steadily developing our domestic businesses, we will continue to speed up development of our overseas businesses in an effort to improve our operating results further for the remainder of the year and achieve sustainable and stable returns for our shareholders.”