Morningstar has issued a research report announcing an increase in the fair value of CNOOC (00883), which has no economic moat, from HK$25.5 to HK$29. This adjustment reflects recent strength in oil prices and a reduction in the company's capital expenditure plans. According to Morningstar, CNOOC's net profit for 2025 is expected to decline by 11% year-on-year to RMB 122.1 billion. This result is primarily supported by a 7% increase in net production and a 2% reduction in comprehensive costs, which helped offset a 13% drop in the average realized crude oil selling price. CNOOC's excellent cost control remains a highlight of its performance, with comprehensive costs projected at USD 27.9 per barrel of oil equivalent in 2025. Although management has not set specific targets, Morningstar anticipates that average costs will remain around USD 30 per barrel of oil equivalent over the next five years. CNOOC's net production target for 2026 is set at 780 to 800 million barrels of oil equivalent, implying growth of 0% to 3%. Management is still finalizing a new long-term production plan, and the firm currently expects a compound annual growth rate of 2.3% over the next five years. Capital expenditure for 2025 is projected at RMB 120.5 billion, which is below the median full-year target of RMB 130 billion and came as a surprise. Free cash flow remained stable at RMB 97.4 billion. The capital expenditure guidance for 2026 is RMB 112–122 billion, lower than the firm's initial expectations.