CNOOC Surges - China's #1 Oil and Gas Company

Cnooc Ltd., China’s biggest offshore oil producer, gained the most in more than a year in Hong Kong trading after saying it plans to increase crude and gas output by up to 28 percent.

The shares rose 9.4 percent to HK$12.32, the most since Dec. 10, 2008, after gaining as much as 12 percent. China Oilfield Services Ltd., a unit of Cnooc’s state-controlled parent, jumped 10 percent to HK$10.86, the largest increase since May 4. The benchmark Hang Seng index advanced 2.2 percent.

Cnooc said yesterday it plans to produce between 275 million and 290 million barrels of oil equivalent this year as demand for fuel rises in the world’s fastest-growing major economy. Nine new production areas will come on stream this year off the coast of China, the company said.

The output estimate “blows away market consensus of 7 percent to 11 percent year-on-year growth and will almost certainly lead to earnings upgrades,” Gordon Kwan, head of regional energy research at Mirae Asset Securities in Hong Kong, said in e-mailed comments.

Capital expenditure may rise 29.5 percent to $7.93 billion this year, Cnooc said. The company may spend $1.47 billion on exploration, $4.81 billion on development and $1.5 billion on