JPMorgan has released a research report stating that CNOOC (00883) third-quarter results, after excluding one-off items, were broadly in line with expectations, and it expects the company's fourth-quarter production to recover as Lingshui 17-2 resumes operations, maintaining an "Overweight" rating and raising the target price from HK$30 to HK$31.5.
CNOOC reported third-quarter net profit under International Financial Reporting Standards of RMB 33 billion, up 2% year-on-year but down 29% quarter-on-quarter, falling short of the bank's expectation of approximately RMB 40 billion, mainly due to a RMB 7.2 billion impairment charge on overseas assets; after excluding one-off items, earnings were broadly in line with expectations.
Management confirmed at the results conference that the floating production storage and offloading (FPSO) unit at the Lingshui 17-2 gas field, which had been shut down since May due to a fire, remains on schedule to resume operations in the fourth quarter, noting that the related disruption had a limited impact, and reaffirmed the full-year 2026 production guidance of 780 to 800 million barrels of oil equivalent.
The bank continues to prefer PetroChina, but maintains an "Overweight" rating on both companies given strong oil prices. Following the results, the bank lowered its 2026 net profit forecast for CNOOC by 5% to reflect the asset impairment, while raising its 2027 net profit forecast by 2% due to higher average domestic natural gas selling prices.
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