22/03/2012
MIE Achieved Satisfactory Growth for 2011 Annual Results
Expanded Overseas Business To Drive Business Performance
Financial Highlights (For the year ended 31 December 2011)
[22 March 2012, Hong Kong] MIE Holdings Corporation (“MIE” or the “Company”, together with the subsidiaries, the “Group”; Stock Code: 1555), an independent oil and gas company engaged in the exploration, development and production of crude oil and natural gas in China, Kazakhstan and USA, announces its annual results for the year ended December 31, 2011.
During 2011, the Company delivered a spectacular financial performance. Turnover increased to RMB2.827 billion, representing an increase of 56.6% from 2010. Profit from operations surged to 1.099 billion, an increase of 73.3%. Profit before tax surged 140.3% from the preceding year to RMB817.2 million. EBITDA increased to RMB2.102 billion, representing a 80.8% increase from the previous year. Net profit was RMB1,105.8 million, an increase of 162.7%. After adjusting for non-cash and non-recurring expenses/income, adjusted EBITDA from core operations increased to RMB 1,725.3 million, an increase of approximately 40% over prior year, and adjusted net profit from core operations increased to RMB768.3 million, an increase of about 83% over the prior year. Earnings per share increased by121.1% to RMB0.42 per share. In view of the strong performance for 2011, the board of directors recommended the payment of a final dividend of HK$0.044 per share.
During 2011, the Company successfully acquired oil and gas assets in Kazakhstan and in the USA, becoming a growing international upstream company. The Company continues as the largest independent upstream oil company operating onshore in China as measured by gross production under production sharing contracts with the Daan, Moliqing and Miao 3 oilfields in the Songliao Basin, the most prolific oil-producing basin in the country. To that solid, growing China base asset on which net daily production increased by 13.4% from 9,349 barrels of oil per day(“BOPD”) in 2010 to 10,601 BOPD in 2011.
The Company has added Emir-Oil in Kazakhstan, which has three production contracts for the Aksaz, Dolinnoe and Kariman producing oilfields, plus an exploration contract that covers the Emir oilfield and the rest of the 850 square kilometer ADEK block. With an acquisition cost of US$159.1 million, Emir-Oil increases our Proved crude oil reserves by 27 million barrels, or 79%, to 61 million barrels at a cost of US$5.89 per barrel, and our Proved + Probable crude oil reserves by 61 million barrels, or 120% to 111 million barrels at a cost of US$2.63 per barrel, providing significant future production and cash flow growth potential.
During the year, the Company also entered the shale oil industry in the USA through Condor Energy Technology LLC, (“Condor”) in which we have an 80% interest, with an upfront cost of US$3 million. Condor has acquired a 31.25% interest in and acts as the operator of 7,450 net acres (30.1 square kilometers) in the Niobrara oil shale play located at Weld County, Colorado, USA (“Niobrara Asset”).
The Company achieved another major milestone in May 2011 when the Company tapped the debt capital market and raised US$400 million by issuing senior notes listed on the Singapore Exchange Securities Trading Limited. These notes, rated “B+” by Standard & Poor’s Ratings Services and “B” by Fitch, Inc., will mature on May 12, 2016, and bear coupon at 9.75% per annum. Thanks to the support from our investors, our notes are one of the best performing listed notes from a China issuer and have traded at par or at a premium from March 2, 2012 to March 19, 2012.
Mr. Zhang Ruilin, Chairman, Executive Director and CEO of the Company said, “Our acquisition strategy for 2012 is to continue to evaluate opportunities in China where the main potential for expansion in the near term is acquisition of existing projects, given that the new projects offered by national oil companies have not been attractive to us. Also, we believe that we will have opportunities to participate in China shale gas development in the near future, as current regulations now under review by National Development and Reform Committee and the Ministry of Land and Resources will likely be revised, opening up the enormous China shale gas reserves to more companies.”
During 2011 The Company drilled gross 467 wells in China with only one dry hole. The Company started a development well and an exploration well in late 2011 in Kazakhstan, both of which encountered oil zones and will be completed and tested shortly. In 2012, The Company plans to drill: (i) 367 wells on our three oil fields under China PSCs; (ii) three more development wells on our Kazakhstan production contract areas and at least two more exploration wells on the ADEK block; and (iii) one exploration well on our Niobrara Asset.
Total planned investment budget for 2012 is US$303 million with US$193 million for MI Energy Corporation (“MIE China”) in China, US$94 million for Emir-Oil in Kazakhstan and US$16 million for Condor in the USA. So in 2012 we plan to add our asset base not only by development work and acquisitions, but also by drilling in low risk exploration and resource plays. Also, during 2012 we plan to drill two horizontal wells in China to test their potential in the Daan and Moliqing oilfields, which are not included in the well counts or budget above.
Net production averaged 10,601 BOPD from the three China PSCs in 2011, up 13.4% from 2010. Emir-Oil, which we completed the acquisition for in September 30, 2011, had a net production average of 2,104 BOPD and 4,858 MCFD in the fourth quarter of 2011. MIE China target net production for 2012 is within a range of 11,000 BOPD to 12,200 BOPD or 3.8% to 15.1% growth from 2011. Emir-Oil target net production for 2012 is within a range of 2,700 BOPD to 4,500 BOPD or 28.3% to 113.9% growth from the fourth quarter of 2011. The Company total target for 2012 net production is within a range of 13,700 BOPD to 16,700 BOPD.
Oil prices remain strong into first quarter of 2012. We sell our oil in China to PetroChina using the Daqing oil price. The Daqing price for the first two months of 2012 averaged US$120.15 per barrel (or US$5.08 above Dated Brent of US$115.07).
Looking ahead, Mr. Zhang Ruilin said, “The acquisition of Emir-Oil, with its large reserve base which enables future increases in production, the acquisition of Niobrara Asset through Condor, with its access to the USA shale oil market and technology for horizontal drilling and multistage fracturing completions and additional drilling for our China oilfields providing continued production growth, all combine to make us well poised for further rapid growth and development for 2012. Based on the current level of Daqing and Brent oil prices, we expect 2012 to be another excellent year for the Company.”
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About MIE Holdings Corporation
MIE is an independent oil and gas company engaged in the exploration and production of crude oil and natural gas in China and Kazakhstan. It is the largest independent upstream oil company operating onshore in the PRC as measured by gross production under production sharing contracts. The Group operates the Daan, Moliqing and Miao 3 oilfields in the Songliao Basin under three separate production sharing contracts with PetroChina, the largest oil company in China. The Group also holds an exploration contract and three production contracts that allow the Group to conduct exploration and production activities in the Mangistau province in the southwestern region of Kazakhstan. In addition, the Group pursues other development and production opportunities in China, and exploration, development and production opportunities internationally, both independently and in partnership with other major and independent oil companies.
MIE was successfully listed on the main board on HKEx on December 14, 2010 with stock code 1555.
This press release is issued by Porda Havas International Finance Communications Group on behalf of MIE Holdings Corporation.
For enquiries, please contact:
Porda Havas International Finance Communications Group
Mr. Terence Wong +852 3150 6773 terence.wong@pordahavas.com
Mr. Henry Ho +852 3150 6712 henry.ho@pordahavas.com
Ms. Yuly Chen +852 3150 6746 yuly.chen@pordahavas.com
Fax：+852 3150 6728