[ET Net News Agency, 19 January 2018] Deutsche Bank lifted its target price for CNOOC
Ltd (00883) to HK$15.84 from HK$13.82, and maintained its "buy" rating.
The research house said CNOOC is most leveraged to the rebound in the oil price as a
pure E&P play. There has been a refocus by CNOOC to prioritize profitability, efficiency
and maximizing shareholder returns versus its old strategy of focusing more on production
and reserve growth.
DB thinks, as one of the lowest-cost E&P companies globally, CNOOC's all-in-cost should
stay below US$35/boe in 2018, since all new project developments are under US$35/boe. It
sees scope for CNOOC to also pay a higher dividend given its strong balance sheet and
cashflow with FCF yields at 10%+.
It also expects CNOOC to communicate a more transparent dividend policy, which should
help the stock re-rate, with the dividend yield targeted to be 5-6%. (KL)