China Oilfield Services Limited

COSL said Q1 2026 operating profit was CNY 1.53 billion, up 22% year over year, and domestic and overseas operating profit both increased 20%. Exchange losses were about CNY 303 million in the quarter, or CNY 208 million more than the same period last year. Segment commentary said drilling services improved in domestic and overseas revenue, operating margin and operating profit versus last year; well services revenue was CNY 6.07 billion, up 5% year over year, and operating margin was 18.2%, up 2 percentage points year over year. Management did not provide consolidated revenue or EPS figures in the call. For the full year, management did not give company-wide numerical guidance, but said deepwater semi-sub activity was strong, jackup repair days will be higher than prior years, and it will keep adjusting plans alongside client needs, CNOOC capex changes and Middle East conditions. On shareholder returns, management said it hopes the payout ratio will remain stable with growth, but tied dividends to business growth and strong cash flow.

The lead executive emphasized COSL’s integrated global oilfield-service platform, technological innovation and lean cost control, along with a “dual circulation” strategy linking domestic and international markets. He framed the company as benefiting from deepwater work, overseas operations in Brazil and ongoing opportunities tied to China’s energy-security priorities, while also stressing that the company will keep supplying resources where clients need them.

The CFO focused on Q1 profitability and segment trends, saying drilling, well services and operating profit all improved, while geophysical and vessel services were stable. He highlighted the CNY 303 million FX loss, explained it as mainly accounting-related and tied to overseas balances, and said the company is examining mitigation steps such as changing the functional currency. He also noted that well services generated CNY 6.07 billion of revenue, CNY 1.11 billion of net margin, and an 18.2% margin rate, with domestic margin above 20%.

Analysts asked about deepwater day-rate and utilization trends, jackup maintenance-related utilization, Middle East disruptions, Kazakhstan/Central Asia expansion, and the FX impact of RMB appreciation. Management said deepwater semi-sub performance was strong, helped by Brazil, while domestic semi-sub utilization stayed relatively stable and some semi-sub prices increased slightly; it also said jackup repair days were planned and aligned with client schedules. In the Middle East, management said Iraq has been affected by lower output, but Saudi Arabia and Kuwait continue operating, and COSL is responding by securing new contracts and expanding into ASEAN and the Americas; Kazakhstan is still at an early stage with test-well planning under discussion.