Yanchang Petroleum International Announces 2023 Annual Results Achieved Profit Turnaround of HK$580 Million

0

Novus’ operation continued to improve with net profit reaching CAD2.82 million Revenue of downstream oil and by-products trading in China amounted to RMB 24.94 billion

Results Highlights:

  • The Group’s overall revenue amounted to approx. HK$27.74billion (2022: approx. HK$29.94 billion), down by 7% year-on-year (YoY);
  • With continuous improvement in oil and gas production in Canada, and the profitable refined oil and by-products trading business in China, the Group achieved profit turnaround of approx. HK$580 million (2022: loss of approx. HK$619 million);
  • Novus achieved sales volume of oil and gas products of 1,093,500 barrels, an increase of 39.62% YoY; Revenue reached approx. CAD86.37 million, representing an increase of 11.50% YoY; net profit reached CAD2.82 million;
  • Cumulative sales volume of oil and by-product trading business in China amounted to approx. 3,418,000 tonnes. Sales revenue amounted to approx. RMB24.94 billion, net profit was RMB 9.14 million.

HONG KONG SAR – Media OutReach Newswire – 3 April 2024 – Yanchang Petroleum International Limited (“Yanchang Petroleum International” or the “Company“, together with its subsidiaries, the “Group“; Stock code: 346.HK) today announced its audited annual results for the year ended 31 December 2023 (“year under review“).

In 2023, global oil demand experienced a recovery growth despite a slowdown in the global economy post-pandemic. The international oil and gas market remained in a tight balance state. During the year under review, amid the fluctuation of oil prices, the Group adhered to its principle of sound and stable operation, and achieved an overall revenue of HK$27.74 billion. Excluding the impairments in well and notwithstanding the provision for bad debts, both the oil and gas production business in Canada and the refined oil trading business in China recorded profits during the year. As a result of the gain on deconsolidation of Yanchang Zhejiang from the Group, the Group recorded a profit of approx. HK$580 million for the year under review. (2022: loss of approx. HK$619 million)

Upstream Oil and Gas Production Business in Canada

In 2023, Novus Energy Inc. (“Novus”) overcame unfavourable conditions such as the downward swing of international crude oil prices and accelerated the construction progress, resulting in continuous improvement in the oil and gas operation. During the year under review, a total of 1,076,000 BoE were produced, respresenting an increase of 33.12% YoY. A total of 1,093,500 BoE were sold, representing a year-on-year increase of 39.62%. Revenue reached CAD86.37 million, representing an increase of 11.50% YoY. Excluding the impairments in wells, Novus recorded a net profit of CAD2.82 million and an operating cash flow of CAD43.12 million.

During the year under review, Novus ensured materials supply for drilling construction. It also made use of technological advances to organize the construction to overcome the impact of snowfall on production and transportation. By the end of August, Novus had completed 94.73% of the annual target in the drilling of wells. Production and operation efficiency of Novus significantly improved, coupled with further strengthened management of oilfields with better controls in budgets and costs, leading to a a profitable operation for Novus.

In terms of reserve, Novus acquired a land area of 47.93 square kilometers in Plato, Court, Major, Marengo and other blocks through mergers and acquisitions and leases. Among them, 11.5 blocks, accounting for 60.05% of the new land area, were acquired through multiple bids and acquisitions in the Major block. In addition, Novus completed the drilling of 5 wells in the Court block and achieved excellent oil testing results. Novus will continue to expand the land well reserve in the Court block and will develop the area as one of its core assets in the future.

Downstream Oil and By-product Trading Business in China

In 2023, facing a complicated and acute market situation, Henan Yanchang Petroleum Sales Co Ltd (“Henan Yanchang”) earnestly implemented its strategic decisions and achieved new results in safety and environmental protection, market research and business expansion. During the year under review, Henan Yanchang recorded total cumulative sales of 3,418,000 tonnes in oil products. Notwithstanding the provision of bad debts, Henan Yanchang recorded ales revenue of RMB24.94 billion with a net profit of RMB 9.14 million.

Henan Yanchang achieved remarkable results in business expansion. During the year under review, Henan Yanchang further deepened its cooperation with major regional companies such as Sinopec Northwest (中石化西北) and Sinopec Central China (中石化華中). In 2023, a total of 1,978,000 million tonnes of oil products were sold to Sinopec cumulatively, marking a record high in sales to Sinopec since the establishment of Henan Yanchang. Meanwhile, Henan Yanchang started cooperation with Hubei State Oil Reserve (湖北國儲) in oil product storage, as well as reaching a cooperative intention with Sanyuan Oil Depot (三原油庫) and Logistics Group (物流集團). It actively implemented and completed the construction and planning of charging infrastructures in Xinzheng City, continuously advancing project negotiations.

During the year under review, the court formally accepted the bankruptcy reorganization application of Yanchang Petroleum (Zhejiang Free Trade Zone) Co Ltd (“Yanchang Zhejiang”) which would be subject to bankruptcy procedures. The Board resolved to deconsolidate the financial results of Yanchang Zhejiang from the Group’s financial statements for the year ended 31 December 2023.

Mr. Feng Yinguo, Chairman of Yanchang Petroleum International, said, ” In 2024, the international oil and gas market outlook presents both challenges and opportunities. The market is expected to remain in a state of tense equilibrium, influenced by a variety of factors, with the potential for further intensification of oil price volatility. The demand for international crude oil is expected to rise continously, albeit at a slower pace. The Company will adhere to the general working principle of seeking progress while maintaining stability, continuously consolidating and enhancing the competitive advantages in our existing business sectors. Simultaneously, the Group will actively explore opportunities to achieve business diversification and sustainable development, strive to cultivate new growth drivers for the Company, and create long term and stable value for its shareholders.”

Hashtag: #YanchangPetroleumInternational

The issuer is solely responsible for the content of this announcement.

About Yanchang Petroleum International Limited (Stock code: 346.HK)

Yanchang Petroleum International is principally engaged in the following activities (i) exploration, exploitation, and operation of oil and gas; and (ii) fuel oil trading and distribution. In its upstream operations, Yanchang Petroleum International possesses operating oilfields in Saskatchewan and Alberta, Canada, through its wholly owned subsidiary Novus Energy Inc., a Canadian enterprise. Novus engages in the business of acquiring, exploring for, developing and producing crude oil and natural gas. In its downstream operations, Yanchang Petroleum International is principally engaged in wholesale, retail, storage and transportation of oil products through its 70% owned subsidiary, Henan Yanchang Petroleum Sales Co., Limited, and which has been granted valid licenses for distribution and sales of oil products in China.

For details, please refer to

About Author

Comments are closed.

error: Content is protected !!

Maintain by Designwell Infotech