COSL (601808): Litigation and release of overseas market expansion and future thickening of profits
Introduction to this report: The company reached an agreement with Equinor on the expansion of overseas markets and increased profits in the future.
At the same time, we judge that the domestic oil and gas exploration and development speed will further increase in 2020.
Investment points: Maintain Overweight rating, raise earnings forecast and target price.
As the overseas market improves in the future, we raise the EPS for 2019-2021 to 0.
26 yuan (previous value was 0.
According to industry average PB3.
43 times the target price raised to 26.
The company reached a lawsuit settlement with Equinor Energy AS (referred to as Equinor).
Equinor terminated its operating contract with the company’s subsidiary (COSL Drilling Europe AS, CDE for short) in 2016, and the company accused Equinor of the CDE subsidiary COSL Offshore Management AS (COM) as plaintiff.
COM and Equinor have reached an out-of-court settlement, and Equinor will pay COM1.
At the same time, the two sides agreed to conclude a framework agreement to strengthen their cooperation relationship.
Litigation settlement will help the company explore overseas markets and bring non-recurring gains and losses.
The company reached an agreement with Equinor and concluded and signed a framework agreement to consolidate the cooperative relationship, which will help the company to further develop overseas markets, especially the marine invasion service market in the North Sea and other regions in Europe.
At the same time Equinor will pay 1 to COM.
US $ 8.8 billion will make the company non-recurring gains and losses in the future and increase profits.
In 2020, we judge that the state’s efforts to safeguard oil and gas exploration and development will continue to increase.
2020 is the last year of CNOOC’s 13th Five-Year 佛山桑拿网 Plan. CNOOC has set a production target for 2021 of 535-545 million barrels of oil equivalent, which is expected to increase by 11-14% compared to 2019.
In order to successfully achieve the production target, we expect CNOOC’s capital expenditures to increase further in 2019 from 2020.
At the same time, we judge that the oil price hub in 2020 will be higher than that in 2019, and overseas markets will continue to pick up.
Risk reminder: Oil and gas companies’ capital expenditure exceeds expected risk, exchange loss risk