January 14, 2002; CNOOC Limited Has Predictable Volume Growth

With a monopoly on China's offshore exploration lands, CNOOC gets a potential participation in each proposed development project.  Last week the company highlighted plans to start production from three fields in 2002. ChevronTexaco is the partner in expected new production of 60 thousand barrels daily; ConocoPhillips, 37 mbd; and Husky, 40 mbd.  The company's expectation for overall volume growth in 2002 is 15%, in line with its target for five-year growth.  Apparently management also contemplates the imminent acquisition of an oil field elsewhere in Asia outside of China.

Hong Kong is the principal market where CEO is traded.  The stock seems to respond to some of the same factors affecting the international oil industry as do stocks elsewhere.  Investors can tap into a daily stream of company news and commentary.  Anyone in cyberspace can view and listen to a recent presentation by management, as is increasingly the case for most companies. The Oil and Gas Journal recently featured a long description of the company's multiple offshore projects.  Analysts and investors hear about China projects from most of CNOOC's partners.  Our historical analysis is on our website.  Along with ample information about the company the valuation seems especially attractive with a McDep Ratio of 0.67 and an EV/Ebitda multiple of 5.3.