- Refined Oil Business Hits Record High of 2.2 Million Tonnes in Trading Volume
- Completed acquisition of Novus to enter North American energy market to become a new growth engine
Key Results Highlights
HONG KONG, March 31, 2014 /PRNewswire/ -- Yanchang Petroleum International Limited ("Yanchang Petroleum International" or the "Company", together with its subsidiaries, the "Group"; stock code: 00346) is pleased to announce the Group's financial results after the first year Yanchang Petroleum Group become its absolute-controlling shareholder. The Group achieved encouraging annual results during the year ended 31 December 2013. The refined oil business in Henan Province hit record high of 2.2 million tonnes in trading volume, contributing gross profit of HK$152 million in the year under review, an increase of over 2.6 times year-on-year. The Group achieves turnaround with profit attributable to shareholders reached HK$52.83 million in 2013. Earnings per share was HK0.38 cents.
Mr. Zhang Kaiyong, Chairman of Yangchang Petroleum International, said, "Yanchang Petroleum Group has given immense support to Yanchang Petroleum International after becoming its controlling shareholder. While strengthening its existing refined oil business and accelerating pipeline construction works, the Company is also actively seeking potential opportunities as new growth drivers. As the overseas investment flagship of Yanchang Petroleum Group, we acquired the entire shares of Novus Energy Inc. ("Novus"), a listed company in Canada, which serves as our milestone in overseas expansion, enabling us to enter the North American market. The acquisition of Novus has been completed in 1Q2014 and its financial results will be incorporated into the Group in the year 2014, becoming our new growth engine."
In-operation Oil and Gas Business
Novus possesses enormous growth potential. Its daily average production increased from 3,059 BOE in 2012 to approximately 4,000 BOE in 2013. Novus plans to drill 89 wells in 2014. Its daily average production is estimated to achieve at least 20% growth.
Novus will serve as a platform for the Company in future expansion in Viking play through acquisition of land and assets. Novus' management team has extensive knowledge on oil and gas market in Canada, in particular Viking oil field market, which will benefit the Company's future acquisition of oil and gas assets there.
Refined Oil Trading Business
Refined oil business is the major revenue and profit contributor for the Company in the year under review. The Company achieves record high trading volume of 2.2 million tonnes, with revenue surged by more than 1.5 times to RMB15.2 billion and profit before tax reached RMB77.13 million, beating its original operation and profit targets in 2013. The Company has concluded a new refined oil agreement with Yanchang Petroleum Group which will increase its annual trading capacity to RMB18 billion in 2014 to 2016, ensuring stable and sufficient supply of refined oil.
In addition, the investment project of pipeline construction, the Xingang sub-pipeline, has almost completed and is being commissioned for inspection and acceptance. Installation of equipment and electric instruments for departure station, terminal station and valve chamber will be conducted in the first quarter of 2014. In order to facilitate the operation of pipeline business, the Company contributed capital of RMB35 million for setting up a pipeline company in Henan Province. Meanwhile, the Company is in close communications with local government, China National Petroleum Corporation and relevant authorities responsible for Lanzhou-Zhengzhou-Changsha oil pipeline to accelerate the construction project at final stage. It is also actively building up customer base for pipeline transportation business to prepare for operation in 2014, thereby increasing operating efficiency.
Prospects in 2014
Chairman Zhang said, "The acquisition of Novus opened the door for us to enter North American energy market. Under the guidance of Yanchang Petroleum Group's strategies and strong support of our parent company, we will enforce stringent management on Novus in achieving our target in 2014. We will continue to seek for overseas acquisition of oil and gas projects which are in operation, in order to boost our oil and gas production and take our business to new heights. In addition, steady progress on the 2D seismic exploration projects of the oilfield blocks in Madagascar will be made. We will also step up our efforts to put Henan pipeline project into operation to enhance competitiveness of our downstream business. We strive to accelerate the growth of our major businesses, bringing fruitful returns to shareholders."
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