HONG KONG, March 28, 2015 /PRNewswire/ --
2014 Annual Results Highlights
Yanchang Petroleum International Limited ("Yanchang Petroleum International" or the "Company", together with its subsidiaries, the "Group"; stock code: 00346) announced today its annual results for the year ended 31 December 2014 ("the year under review"). During the year under review, the Group's turnover increased by 15.5% to approximately HK$22.35 billion. In 2014, despite the impact of the one-off and non-cash oil and gas asset valuation impairment, the net profit attributable to the Group's oil and gas in-production business in Canada and refined oil trading business in the PRC as a whole achieved approximately HK$211 million, almost three times of the approximately HK$52.83 million profit recorded for the corresponding year of 2013.
Mr. Zhang Kaiyong, Chairman of Yangchang Petroleum International, said, "Under enormous support of the Board and the controlling shareholder of Yanchang Petroleum International, the performance of upstream oil and gas production business, exploration business and downstream refined oil trading business hit a record in 2014. Novus' in-production oil and gas project in Canada achieved nearly 1.5 million barrels of oil equivalent ("BOE") of annual production, the exploration project of Oilfield Block 2104 in Madagascar completed 197 km of 2D seismic data collection, analysis and interpretation and the annual volume of refined oil trading in Henan reached over 2.6 million tonnes, stepping up the Company's upstream and downstream businesses to another new level."
In-Production Oil and Gas Business
In 2014, Novus' annual revenue was CA$120 million (equivalent to approximately HK$820 million), representing an increase of 12% as compared with the previous year; the daily average production was 4,251 BOE, representing an increase of 6% as compared with the previous year. The net profit after taxation was CA$24.52 million (equivalent to approximately HK$160 million), up by 65% as compared with the previous year. According to the reserves report issued by an independent technical consultant, the Proved plus Probable (2P) Reserves of Novus was 22.39 million BOE as at 31 December 2014, representing an increase of 3% as compared with the previous year. Novus currently has 669 wells in production.
In addition, Novus commenced its pipelines connection project at the end of 2014 which will commence operation at the beginning of 2015 upon completion. Connecting 63 wells in the region by constructing a network of 12.65-km oil and gas pipelines in Flaxcombe, the core production region at a project budget of CA$7.5 million (equivalent to approximately HK$51.25 million). It is expected to increase daily production by approximately 610 BOE. Upon the completion of the pipeline connection project, the oil production volume is expected to be increased while decreasing the transportation costs as well as minimizing the effects brought by bad weather on the sales of oil and gas.
With the international oil price plummeting, Novus intends to control its capital expenditure and production volume at a reasonable level with an aim to balance its cash flow.
Refined Oil Trading Business
During the year under review, annual total sales volume of refined oil trading business in Henan hit a record. In 2014, sales volume of refined oil exceeded 2.6 million tonnes, representing an increase of 410,000 tonnes or 19% as compared with the previous year; revenue of refined oil trading was RMB17.2 billion, representing an increase of 14% as compared with the previous year, while total profit after tax was RMB61 million.
The construction of Xingang sub-pipeline under the Lanzhou-Zhengzhou-Changsha refined oil pipeline has completed 95%. Also, most of government approvals have been completed and obtained. Xingang sub-pipeline project is planned to commence operation in 2015.
Having been affected by a slump in international crude oil price, refined oil price in China remained at a low level. Under such circumstances, the Company has conducted a number of researches on different aspects, such as planning to fully utilised storage capacity as well as expanding oil sources and customer base in order to boost sales and maximise profit.
Exploration Woks
In 2014, BGP Inc., China National Petroleum Corporation ("BGP") was commissioned by the Company to conduct data processing and findings in relation to 197-kilometer 2D seismic exploration for the southeast of the Oilfield Block 2104 in Madagascar. The report on the findings of the project has been inspected and accepted by experts. It is considered a favourable gas and oil bearing area to form gas and oil belt. The Company will continue to strengthen the integrated geological research on the oilfield block in order to plan the next steps for exploration. Furthermore, the Group has already commenced the 2D seismic data collection in the Oilfield Block 3113 which is expected to be completed in the middle of 2015.
Chairman Zhang concluded, "Due to the sharp decline in international crude oil price, 2015 will be a very difficult year. The Company will continue to develop Novus in Canada; make progress with 2D seismic exploration and the extension of exploration period for the oilfield blocks in Madagascar; facilitate the operation of pipelines for refined oil of Henan Yanchang; and actively looking for appropriate in-production oil and gas acquisition opportunities overseas, striving to optimizing the company's downstream business portfolio, bringing further returns to shareholders."
About Yanchang Petroleum International (stock code: 00346)
Yanchang Petroleum International is principally engaged in the following activities (i) investment in oil, natural gas and energy related business; (ii) exploration, exploitation and operation of oil and gas; and (iii) fuel oil trading and distribution. In its upstream operations, Yanchang Petroleum International possesses operating oilfields in Saskatchewan and Alberta, Canada, through Novus Energy Inc., a Canadian enterprise. Novus engages in the business of acquiring, exploring for, developing and producing crude oil and natural gas. Yanchang Petroleum International also holds a 100% stake in Oilfield Block 3113 and Oilfield Block 2104 in the Republic of Madagascar. In its downstream operations, Yanchang Petroleum International is principally engaged in wholesale, retail, storage and transportation of oil products through its 70% owned subsidiary, Henan Yanchang Petroleum Sales Co., Limited, and which has been granted valid licenses for distribution and sales of oil products in China. For details, please refer to www.yanchangpetroleum.com
About Shaanxi Yanchang Petroleum (Group) Co., Limited
Yanchang Petroleum Group is principally engaged in oil and gas exploration, exploitation, processing, pipeline transportation and sales of oil and gas; chemical engineering of oil, gas and coal, machinery manufacturing, project construction and oil and gas research and development. Yanchang Petroleum Group owns the right for exploration, exploitation and operation of oil and natural gas resources and has refining facilities in China, and owns oil and natural gas resource assets in China and abroad. In 2013, Yanchang Petroleum Group produced 12.54 million tonnes of crude oil, processed 14.03 million tonnes of crude oil and produced 24.6 million cubic meters of natural gas, and achieved annual revenue of RMB186.5 billion. Yanchang Petroleum Group, CNPC, Sinopec and CNOOC are the largest four enterprises in China which own and have the right to explore oil and gas resources in China, and Yanchang Petroleum Group is the only petroleum enterprise with more than 100 years of history. In 2014, Yanchang Petroleum Group ranks No. 432 in the Fortune Global 500 amongst the top 500 corporations worldwide. For details, please refer to http://english.sxycpc.com/
Issued by Cornerstones Communications Ltd. on behalf of Yanchang Petroleum International Limited.
