CEO (NYSE)Energy Sector

Evan Farber/Brendan McMenaminBrian Boyd

Jacek KornasAdam Sheetz

Gautam Shringapure

China National Offshore Oil Company

Snapshot Slide► Our target price is: $33.50► Appropriate purchase price: $26► Size: 10.6 B► Beta: NA► Dividend: .88/share

Company Description► CNOOC Limited is an oil & gas

company (headquarters in Hong Kong) focused on exploration, development and production offshore China.

► Incorporated in 1982 to conduct exploration and production in China's offshore areas, both independently and as the exclusive Chinese partner for foreign entities.

Management► Liucheng Wei Chairman, CEO► Shouwei Zhou Pres, Director► Mark Qui, Ph.D. CFO, Sr. VP► Ke Ru Exec. VP► Yunshi Cao Sr. VP, Gen. Counsel,

Sec.

Competitive Landscape► Three main oil & gas companies in China:

► China National Petroleum Corporation (CNPC),

► China National Petrochemical Corporation (Sinopec)

► CNOOC - Are the dominant offshore petroleum company, the second largest natural gas company and the third largest petroleum company in China.

► Foreign outsiders – Have to go through CNOOC, though

Key Advantages► Largest Offshore exploration of oil &

natural gas in China

► Dominant producer of crude oil & natural gas and only company permitted to conduct exploration and production with international oil & gas companies offshore China.

Company Goals► Increase production through the

development of undeveloped reserves► Add to their reserves through a

balance of independent exploration and production sharing contracts

► Capitalize on growing demand for natural gas in China

► Continue to improve operational efficiencies and lower production costs through the utilization of technology.

Current News► Japan's largest oil refiner Nippon Oil Corp

bought the 1st export cargo of Chinese Wenchang oil

► The Wenchang project, an offshore oil field, is 60 % owned by CNOOC Ltd, with Canadian Husky Energy Inc holding 40%.

► As well, partners with Phillips on oilfield NW of Bohai Sea, China’s 2nd largest oilfield

► Plans to build its first refinery with Royal Dutch/Shell.

► Build chemicals plant in Huizhou with RD/Shell► It has also signed an oil exploration contract

with CPC of Taiwan.

Financial Ratios► Market Cap: 10,661,990,000 ► Daily Volume: 60,000► Dividend: $0.88► 52-Week High: $30.66► 52-Week Low: $17.35► EPS: 2.04 TTM► 1yr Projected EPS: 2.71

Financial RatiosCompany Industry Sector S&P 500

Gross Margin 85.37 49.25 35.90 47.47

Profit Margin 34.42 1.70 4.72 10.40

ROA 14.49 0.95 4.28 6.42

ROE 20.83 2.00 7.17 18.31

ROI 16.29 1.08 5.37 10.28

Financial RatiosCEO Sinopec Sector S&P 500

Current Ratio

4.75 .084 1.29 1.64

Quick Ratio 4.30 0.29 0.88 1.11

LT Debt to Equity

0.19 0.16 0.44 0.74

Total Debt to Equity

0.19 0.25 0.51 0.98

Free Cash Flow

380.3M -889.0M _ _

Financial RatiosCompany Industry Sector S&P 500

P/E 12.40 37.69 27.98 24.74

Price to Free Cash Flow

9.05 9.47 11.48 17.64

Dividend Yield

4.06 2.70 2.82 2.19

Why Should PSIA Invest Now?► China’s joining of the WTO marks

opening of huge market, particularly for auto industry which is set to explode!

► As well, taking advantage of newly open markets in Japan & E. Asia

► Want to diversify the PSIA portfolio with ADR (foreign investment)

Stock Chart

Team Recommendation► Our Target Price: $33.50

► Appropriate Purchase Price: $26-27

► Buy now!