Investment Attractiveness and Risk Analysis of CNOOC Under the Assumption of Brent Oil at $55 per Barrel

1. Investment Attractiveness Assessment
   
   The user’s original assumption that CNOOC’s non-recurring profit exclusion would be 130 billion RMB when Brent Oil is at $68 per barrel in 2025 (actual should be around 13 billion RMB) and 90 billion RMB when Brent Oil is at $55 per barrel (actual should be around 9 billion RMB) led to calculation deviations due to unit misinterpretation [0][1]. However, the production growth logic is valid: CNOOC’s target compound annual production growth rate for 2025-2027 is 3.5-4.5% [1], consistent with the user’s assumption; the barrel oil cost in H1 2025 is $26.94 per barrel [1], leaving considerable profit margin when Brent Oil is at $55 per barrel. Based on the current market value of 90.8 billion RMB [0], 50% dividend payout ratio [1], and 10% profit growth rate [1], the total return (market value + dividends) by 2030 is still attractive.

2. Risk Factor Overview
   
   CNOOC’s long-term valuation is affected by multiple risks:

• Oil Price Fluctuations
  : Profit is highly correlated with Brent Oil prices; barrel oil profit in H1 2025 will shrink同步 as Brent Oil price drops from $70.8 per barrel [1];
• Geopolitical Risks
  : Business covers globally sensitive regions, which may affect production and operations due to regional conflicts;
• Energy Transition Pressure
  : Global climate policies are tightening, leading to long-term downward risk in oil and gas demand [0];
• Technology and Exploration Risks
  : Deep-sea exploration and development require high investment; failure or low production will affect production growth;
• Currency Risks
  : Revenue is denominated in USD while costs are in RMB; exchange rate fluctuations directly affect profits [0].

1. Cost Advantage Supports Profit Resilience
   : CNOOC’s barrel oil cost in H1 2025 is $26.94 per barrel [1], far lower than international peers; it can still maintain profitability even if Brent Oil drops to $55, providing guarantee for dividends and growth.
2. Unit Misinterpretation Requires Correction of Calculation Basis
   : The user’s original assumption of 130 billion RMB profit should actually be around 13 billion RMB; the current market value of 90.8 billion RMB differs greatly from the 880 billion RMB assumption, so returns need to be recalculated based on actual market value.
3. DCF Analysis Needs Caution
   : The DCF valuation provided by the tool (conservative 473.95 HKD per share) assumes an overly high revenue growth rate of 28.3%, which may not be sustainable in the long term [0]; expectations need to be adjusted based on fundamentals.

• Risk Priority
  : Oil price fluctuations (high priority in short term), energy transition (high priority in long term), geopolitical risks (medium priority);
• Opportunity Window
  : Low barrel oil cost advantage [1], stable production growth plan [1]; against the backdrop of short-term energy demand still relying on oil and gas, it has potential for dividend and value repair.

Under the assumption of Brent Oil at $55 per barrel, CNOOC still has investment value through production growth and cost control, but the unit deviation in the user’s original calculation needs correction. Long-term valuation is affected by risks such as oil prices, geopolitics, and energy transition; investors need to comprehensively evaluate based on actual market value and risk preferences.

(Note: [0] indicates internal database analysis, [1] indicates Soochow Securities research report)