China Oilfield Services : COSL Announces Interim Results 2014 Fully Leveraged Edges as an Integrated Ser...

China Oilfield Services Limited ("COSL" or the "Group") announced today its interim results for the six months ended 30 June 2014.

During the first half of 2014. COSL adhered to a market oriented approach, optimized allocation of its resources, and achieved rapid growth and record results in both the China Offshore and international markets. Revenue for the first half of the year reach a RMB15,927.7 million, up 28.0% year on year and a record high since the Company's listing. Profit from operations for the interim period reached RMB5,029.1 million, up 37.9% year on year. Profit attributable to shareholders grew by 39.1% from the same period last year to RMB4,424 million.

In the Drilling Segment , COSL has become more and more globalized. As at the end of June 2014, the Group operated and managed total of 43 drilling rigs (including 33 jack-up drilling rigs and 10 semi-submersible drilling rigs), of which 14 rigs were operating in Bohai, China, 10 in South China Sea, 2 in East China Sea, and 15 in overseas regions such as the Norwegian North Sea, Mexico and Indonesia, etc., and 1 rig was under repair and maintenance abroad and 1 rig was under preparation before operation.

During the first half of 2014, the Group's drilling rigs achieved 6,593 operating days, up 503 days year on year. The calendar-day utilization rate reached 91.0%, down 4.3 percentage points year on year due to more days spent in repair and maintenance during the period, but still outperformed its global peers.

The jack-up drilling rigs achieved 73 more operating days year on year, while the semi-submersible drilling rigs operated 430 more days. The two accommodation rigs continued to operate in the North Sea for 309 days during the first half of 2014, down 53 days year on year, primarily mainly due to maintenance of one of the accommodation rigs as scheduled. As such, the calendar day utilization rate declined to 85.4% while the available day utilization rate was still intact at 100.0%. The four module rigs operated in the Gulf of Mexico achieved 709 operating days, 2 days more year on year at a calendar day utilization rate of 97.9%,up 0.9 percentage point from the same period last year. During the period under review, large-scale equipment delivered outstanding performance. COSLInnovator and COSLPioneer were named "Rig of the month" in May and June in a monthly review of 22 rigs by Statoil. NH1, NH2 and HYSY931, etc., completed operations ahead of schedule and at high efficiency, helped clients lower costs by almost RMB1billion.

During the period COSL achieved significant progress in the general subcontracting business, illustrating breakthroughs in the Group's integrated service capability. The Group successfully put HYSY981 into operation and completed a general subcontracting drilling operation in South China Sea. While achieving a zero-accident, zero-pollution and high efficiency operation record, COSL achieved a success in expanding its well services into deep waters. Another breakthrough in COSL's general subcontracting capability was represented in the Missan Oilfield Project in Iraq where the Group tackled a world-class difficulty of performing drilling in the 800-deep salt bed. This has also written a new chapter in history there for horizontal wells. The operation efficiency is unrivalled by the local service suppliers there.

On Well Services , during the first half of 2014, the well services segment continued to adhere to a technology-driven model. Several technologies have obtained breakthrough in the marine applications and a new progress was made in enhancing recovery and output enhancement. Among which, the self-developed ELIS system successfully commenced operation in deep water for the first time while the self-developed anti-corrosion cement system was applied for the first time with a success in Bohai. The nitrogen-filled foam water plugging technology and skill were been successfully applied in the sea, providing a new technological method and solution for marine oilfield high-water-cut-well comprehensive treatments. The low permeability fracturing technologies increased the production capacity of coal-bed methane; mature oilfields saw output increased with better water control by utilizing carbon dioxide profile control technology; and the acidification technology has been gradually introduced to the international market upon matured development in the domestic market.

On Marine Support and Transportation Services , during the first half of 2014, the Group's marine support and transportation services segmen tadhered to safe production and quality services principles, has earned customer satisfaction.

The chartered vessels operated 8,475 days in total, up 1,445 days from the same period last year. In addition, in order to satisfy different requirements in the offshore oil and gas exploration and development in China together with an aim to adjust the equipment structures of marine support and transportation services segment, the Group purchased a deep-water supply vessel HYSY613, which officially commenced operation in May this year. The calendar-day utilization rate of the self-owned vessels during the first half of 2014 was 93.0%, down 1.2 percentage points from the same period last year, primarily due to the increase in the number of days spent in repair and maintenance.

On Geophysical and Surveying Services , the Group was able to ensure the equipment utilization efficiency to complete in various large-scale projects through reasonable deployment, coordination and arrangement. HYSY720, a 12-streamer seismic vessel, received endorsements from various parties due to its high quality, high efficiency and safety services in seismic data collection South China Sea. In addition, the construction work of HYSY721, a 12-streamer seismic vessel, progressed smoothly condition and it has been successfully delivered in August 2014.

The operation volume for 3D collection services increased by 4,186 km2 from the same period of last year, mainly due to utilization of external vessels to commence 3D operations which added 3,073 km2 of operation volume. The operation efficiency of HYSY720 also enhanced during the period, added 1,573km2 of operation volume while the operation volume of other vessels decreased by 460km2. The 3D data processing operation volume increased by 52.1% from the same period last year.

COSL Group CEO and President Mr. Li Yong said: "The Group's results for the first half hit a new record high primarily due to the strong demand from both the domestic market in China and the international market. In addition, following years of relentless efforts and pursuit, COSL's large-scale equipment portfolio has optimized and enhanced significantly, yielding substantial harvests from accumulation of technologies and knowhow. This, when coupled with our integrated service offerings in the market, has lifted our competitive edges, which has allowed COSL to grasp growth opportunities in the market to create better value for shareholders. Whereas the global exploration and production sector is still subject to challenges from discoveries of new oilfields and inadequate inherent strengths, these will allow opportunities and room for sustainable growth for COSL to excel better."