Oil in Every CNOOC and Cranny

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When you're an energy company, the less energy you expend, the better. The megacorporations of the global crude business have been venturing further and digging deeper to chase the world's supply, as evidenced by the rise of deep-water specialists Transocean (NYSE: RIG) and Diamond Offshore (NYSE: DO). I think it's safe to say we'd have a derrick on the moon by now if we thought it was made of oil rather than cheese.

In times like these, it's important to have a portion of assets in one's backyard. Although the quarterly results are unaudited and lack crucial information, including net earnings, the latest release from CNOOC (NYSE: CEO) contains some important indications of its progress.

Revenue for the first quarter rose to $3.4 billion, 62% more than last year. Net production rose 5% to nearly a half-million barrels of oil equivalent (BOE) per day, with the gas segment showing particular strength at 601 million cubic feet per day, a 9.3% year-over-year boost. Of course, the 69% rise in average realized oil prices from the year-ago period didn't hurt matters any.

What grabbed this Fool's attention was the apparent flurry of activity from the offshore China segment, which enjoyed a 6.3% production bump. In addition, the company reported four new discoveries in the region, commenced production at another, and is ready to start drilling at yet one more site.

Despite these positive results, it has been a rough earnings season for Chinese oil companies. PetroChina (NYSE: PTR) incurred a 31% reduction to net earnings, and China Petroleum & Chemical (NYSE: SNP), better known as Sinopec, posted a 69% reduction that was due in large part to the price controls imposed by China on fuel products. Fools can expect CNOOC to feel some of that squeeze as well, and might consider waiting for more color before pressing ahead with the shares.

Further Foolishness:

• Great Call on CNOOC! What's Next?
• Quick Take: CNOOC and the Junta
• PetroChina's Profit Pickle