China Oilfield Services Limited (“COSL” or the “Group”; Hong Kong Stock Exchange Stock Code: 2883; Shanghai Stock Exchange Stock Code:  601808) released the Group’s annual audited Financial Report for 2018.

In 2018, despite the volatile price movement throughout the global oil market, the oilfield service industry manifested overall signs of recovery against a backdrop of continually harsh competition. The Group steadily promoted technological development and international expansion, actively address the increasing demand for exploration and development, support customers in production through technological innovation and operational efficiency enhancement of equipment, and accomplished the Company’s operational goals during the period.  With the workload increased, safety position is stable, and gained an excellent safety management achievements.

In 2018, the Group’s revenue was RMB21,886.6 million, grew by 25.4% year-on-year; net profit climbed to RMB88.8 million, reflecting continued overall profitability. During the period, COSL conscientiously initiated transformation effort that saw an upgrade in operation facilities, with the resultant utilization rate of various facilities in categorized segments of the Group compared favorably to those of the international peer competitors.  The Group advancement in technology progress has distinguished itself by making breakthroughs on multiple fronts, including some self-owned proprietary technology ranked top in the industry.  Due to the fact that the market share of technology segment has continued to rack up persistent growth, well services segment has contributed up to 44.8% to the aggregate revenue during the period.

Regarding the drilling services segment, the number of operating days of the Group’s drilling rigs grew by 23.8%, year-on-year.  The Group has adequately allocated for resources in the worldwide market, with overall upgrade in utilization rate in a fleet of facilities. COSL’s drilling services segment has successfully obtained various major service contracts over the world including Indonesia and New Zealand.  The Group has also gained an access to high-end markets in Middle East, and locked the operation contract for many times in Northern Europe and the Far East.

Revenue growth in well services segment is obvious.  The Group continued to promote the systematic and industrialization development of its technical products, and its research and development capability and productivity kept strengthening. ESCOOL high-temperature and high-speed logging system gained a leading position in the industry, and such system completed logging operation for a hot dry rock well with 190℃ in Qinghai, which set a new record for operation in high temperature wells. The cementing technology formed high-temperature and ultra-high-temperature cement slurries at 120-260℃ and built good reputation among international customers. The BIODRILL A drilling & completion fluids system and supporting technique achieved the recycling of water-based drilling and completion fluids and solved the technical problem of emission reduction of drilling and completion fluids, a vivid instance of actualization of the eco-friendly concept through technology progress.  With their continuous increase in the application, new stimulation technique including high-efficient complex acid and non-acid chelation gained remarkable results.

The marine support services segment has sustained a high level of calendar day utilization rate. By adjusting domestic layout planning, the Group achieved optimal allocation and cross-region sharing of resources for 9 vessels. In overseas markets, successfully renewed the contracts for support barges and pontoons in Indonesia and newly obtained the support barges service contracts in the Mexican market.

For the geophysical acquisition and surveying services segment, the Group has recently introduced multi-client projects, marked by a substantial growth in operation volume for 2D projects. The Group kept extended the scope of surveying service and successfully won 7 service projects for domestic wind power segment.

Mr. Qi Meisheng, Chairman of COSL, remarked that “In 2018, the Group has overcome multi difficulties, adhered to the new development strategy and reforms, the Group made remarkable achievements in areas such as market development, research and development in technology and international development. Looking forward to the future, the Group will keep following the industry trend closely, allocate resources guided by customer demand, and do best at technical reserve and safety management. Improving profitability though structural cost reduction such as institutional reform. COSL is confident it could stand higher in the new opportunity, and continuously promote the high quality development of the company.”