Rate Of ReturnHere is the content you need to recognize and adaptively translate: Chinese
In 2023, CNOOC's domestic proven oil reserves were approximately 4.04 billion barrels, with a present value of 638.904 billion yuan. At an exchange rate of 7.05, this translates to approximately $90.63 billion, with a present value per barrel of about $22.43 ($90.63 billion divided by 4.04 billion barrels).
Future development costs are estimated at 244.336 billion yuan, equivalent to $34.66 billion, or $8.58 per barrel ($34.66 billion divided by 4.04 billion barrels). The present value of future development costs is approximately $6 per barrel.
Thus, the present value per barrel for CNOOC's domestic reserves, including future development costs, is approximately $28.43 ($22.43 + $6).
In 2020, CNOOC's domestic depreciation per barrel was $12.07. Including exploration failure costs (approximately $1.7 per barrel), the total exploration and development cost per barrel was about $13.77.
Therefore, the present value per barrel for CNOOC's domestic reserves, excluding exploration and development costs, is approximately $14.66 ($28.43 - $13.77). Adding exploration costs of about $2.4 per barrel, the post-exploration present value per barrel is approximately $17.06 ($14.66 + $2.4).
An alternative estimation method can also be used for verification. In 2023, CNOOC's domestic profit per barrel was approximately $33, with depreciation of $12.07 and exploration failure costs of about $1.7 per barrel, resulting in a cash flow per barrel of approximately $46.77. Assuming a 10-year production of 3,650 barrels (365 barrels annually), the total cash flow over 10 years would be approximately $170,700 (3,650 × $46.77), with a present value of approximately $104,800, or $28.7 per barrel ($104,800 ÷ 3,650). This aligns closely with the first method's estimate of $28.43 per barrel.
In 2023, the average profit per barrel for international oil companies was approximately $15. With depreciation of $14 per barrel, the cash flow per barrel was approximately $29. Assuming a 10-year production of 3,650 barrels, the total free cash flow over 10 years would be approximately $106,000 (3,650 × $29), with a present value of approximately $65,000, or $17.8 per barrel ($65,000 ÷ 3,650). Excluding exploration and development costs, the present value per barrel is approximately $3.8 ($17.8 - $14). Adding exploration costs of about $3 per barrel, the post-exploration present value per barrel is approximately $6.8, which is close to the current transaction price of $4–5 per barrel for undiscovered potential reserves in the Permian Basin.
The present value (intrinsic value) of CNOOC's domestic proven but unconfirmed reserves is approximately $17.06 per barrel. Each year, newly proven reserves increase the company's intrinsic value by approximately $14.66 per barrel.
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