Goldman Sachs: Reiterates "buy" rating on CNOOC (00883) with a target price of 23.5 Hong Kong dollars.

Goldman Sachs released a research report stating that it reiterates a "buy" rating on CNOOC (00883), believing that its project portfolio is highly competitive and can benefit from rising oil prices, with a target price of 23.5 Hong Kong dollars. CNOOC is expected to have a daily production of approximately 1.97 million barrels of oil equivalent last year, which is 2% lower than the bank's expectations, but in line with the company's previous production guidance upper limit. The report states that the company has set a production target for 2027 at a daily 2.2 to 2.3 million barrels of oil equivalent, implying an average annual compound growth rate of 4% to 4.9% from 2024 to 2027. The targets are slightly lower than last year's announced production targets, with the median forecast implying a 3% and 4% decrease in targets for the next two years, respectively. Management mentioned that the decrease in production guidance is partly due to the sale of US assets. The bank believes that the management of CNOOC has confidence in maintaining stable capital spending while achieving continuous production growth. The company also suggests increasing the annual dividend payout ratio for 2025 to 2027 from the previous 40% to no less than 45%, slightly higher than the bank's expected 44%, implying a dividend yield of 7.7% for this year.