10/03/2011
Profit From Operations Surged 162.8%, EBITDA Surged 69.2% and Net Profit Increased By Almost Four-Fold
Continue to lead the independent onshore upstream oil industry in China with rapid and sound development
And in the process of expanding into overseas market
For the year ended December 31
[March 10, 2011, Hong Kong] MIE Holdings Corporation (“MIE” or the “Company”, together with the subsidiaries, the “Group”; Stock Code: 1555.HK), the largest independent upstream oil company operating onshore in the PRC as measured by gross production under production sharing contracts, announced its audited annual results for the year ended 31 December 2010 (“the year under review”).
During the year under review, the Company realized a 54.7 % increase in total revenue to approximately RMB 1,805.0 million over the previous year (2009: RMB1, 166.8 million). EBITDA increased 69.2% to RMB1, 162.6million (2009: RMB 687.0 million). The Company’s net profit was RMB420.9 million, increasing almost four-fold from the previous year and exceeding the profit forecast as set out in the prospectus dated December 1, 2010, primarily as a result of significant increase in realized oil prices and sales volume (2009: RMB110.5 million).
In view of the stellar results for 2010, and given the low interest rate environment, the Company has decided to propose an extraordinary dividend payment of HK$0.035 per share although there was no plan to pay any dividend for the year ended December 31, 2010 as stated in our prospectus dated December 1, 2010. The dividend is equivalent to 18.5% of the net profit for the year ended December 31, 2010, and an annualized return to shareholders of 8.7% based on the IPO price of HK$1.70 per share.
During the past year, the oil sector made breakthrough despite volatility of crude prices. The strong domestic demand for oil and the weak dollar favored the industry and the Company as well.
The year of 2010 has been a key milestone in the history of the Company. Apart from its successful debut on the Main Board of HKEx since December 14, 2010, the Company realized a substantial 22.4% increase for net daily crude oil production from 7,637 barrels per day in 2009 to 9,349 barrels of crude oil per day in 2010.
The remarkable increase was mainly due to the strong operation capabilities enriched reserve and production. As of December 31, 2010, the Company had estimated net proved, proved + probable, and proved + probable + possible crude oil reserves of approximately 32.9 million barrels, 52.5 million barrels and 66.4 million barrels respectively, an increase of 3.5 million barrels, 4.9 million barrels and 5.3 million barrels respectively, as compared to the reserve as of June 30, 2010 as stated in the prospectus dated December 1, 2010.
In the year under review, the Company commenced infill drilling and drilled six wells with great success. Reserves attributable to infill drilling included in our reserves for the first time at December 31, 2010 are 3.3 million barrels, 4.3 million barrels and 5.2 million barrels of net proved, net proved + probable, and net proved + probable + possible reserves, respectively.
Since the last reserve report as a June 30, 2010 as set out in our prospectus dated December 1, 2010, our net proved and net proved + probable reserves increased approximately 11.9% and 10.1%, respectively, mostly from infill drilling indicating the Company has substantial continued growth potential in its existing oilfields in China. And the Company is looking forward to continue expanding the infill drilling plan and currently plan to drill an additional 455 infill wells including 36 in 2011.
The high level of development and production activities is demonstrated by the Company’s high rig count and number of productive wells. In 2010, the Company operated 28 drilling rigs and until the end of 2010, operated an aggregate amount of 1,641 gross productive wells in the three oilfields in China.
During 2010, the Company drilled 200 wells comprising 144 wells, 27 wells and 29 wells in Daan, Moliqing and Miao3 oilfields, respectively, and the gross production and net production were 6.4 million barrels and 3.4 million barrels, respectively.
Zhang Ruilin, Chairman, Executive Director and CEO of MIE, said “MIE believes its oilfields have strong growth potential, and it is to continually expanding operations by drilling more wells in the oilfields it operates, which will substantially increase the net production of crude oil over the next several years.”
As of December 31, 2010, the Company had identified 2,623 potential locations containing proved, probable and possible undeveloped reserves, respectively, for future drilling and within our estimated net reserves we include estimated net proved, probable and possible undeveloped reserves of 12.4 million barrels, 12.0 million barrels and 8.8 million barrels, respectively, for these locations.
As of December 31, 2010, the average realized oil price was US$77.99 per barrel for the year compared to US$58.58 per barrel for the year ended December 31, 2009. Lifting cost per barrel was US$7.09 per barrel for the year ended December 31, 2010, compared to US$7.69 per barrel for the year ended December 31, 2009. Under the year of review, the Company’s basic and diluted earnings per share were both RMB 0.19.
Looking ahead, with a forward looking vision, the Company is to continue to follow a prudent financial policy and strengthen the cost control, in a bid to maintain its cost advantage and healthy financial position. The Company will continue to develop its Daan, Moliqing and Miao 3 oilfields and apply new technologies like infill drilling to extract more oil from its oilfields. Besides, the Company strives to seek good opportunities of cross-boundary acquisitions and merges to develop its overseas market.
In the year under review, the Company has made net investments of RMB 763.6 million and drilled 200 wells in the oilfields. For the year ending December 31, 2011, the Company currently expect to make net investments of RMB 1.3 billion and drill 367 wells. Given the rise in oil price since late last year and Brent is currently trading around US$112 per barrel, and the increase in production expected from the currently planned increase in net investments of RMB 1.3 billion to drill 367 new wells in 2011, the Company expects another strong financial year for its China oilfields.
On February 14, 2011, the Company announced another important milestone to acquire 100 % of EMIR-OIL, LLC, an oil and natural gas exploration and production company in Kazakhstan. The acquisition of EMIR-OIL, LLC is an important first step for the Company to become an international oil and gas company. Based on the reserve report as of March 31, 2010, EMIR-OIL, LLC’s contracted area has proved reserves, proved + probable reserves, and proved + probable + possible reserves of approximately 22.7 million, 92.2 million and 127.6 million barrels of oil equivalent, respectively.
Foreseeing the existing energy market in China, we believe that the industry will continue its rapid growth amid better recovery hopes, increasing consumption of petroleum and other kinds of energy and higher oil prices. In the face of heated competition at home as well as overseas and other uncertainties (such as wars, energy policy changes and major oil and gas leaks), we will strive to raise our competitiveness and gradually develop our business by expanding the scope, increasing the team quality, upgrading facilities, tapping overseas markets, optimizing the structure and reducing operating costs.
About MIE Holdings Corporation
MIE is one of the leading independent upstream oil companies 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, PRC’s most prolific oil-producing basin, under three separate production sharing contracts with PetroChina, the largest oil company in China. 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.
The Group announced that it will purchase 100 % of EMIR-OIL, LLC, the oil and natural gas producer in the Republic of Kazakhstan, on February 14, 2011. The Group’s average production rate per day is expected to increase significantly after the acquisition.
MIE has successfully listed on the main board on HKEx on December 14, 2010 with stock code 1555.HK.
Issued by Porda Havas International Finance Communication Group for and on behalf of MIE Holdings Corporation. For further information, please contact:
Porda Havas International Finance Communication Group
Terence Wong Tel：+852 3150 6773 E-mail：terence.wong @pordahavas.com
Henry Ho Tel：+852 3150 6712 E-mail：henry.ho@pordahavas.com
Rebecca Yu Tel：+852 3150 6767 E-mail：rebecca.yu @pordahavas.com
Fax：+852 3150 6728