2016 continued to be a challenging year. Over the past two and half years, oil prices (WTI) have plummeted from more than USD100 to less than USD27 per barrel but rebounded after hitting bottom in early 2016. In early 2017, the oil prices recovered to and stabilized at around USD50 per barrel. Up to this moment, the Company’s Utah gas and oil field has been in normal operation. By the fiscal year ended 2016, the company benefited from gas price recovery as well as reduced drilling and operating costs and the value of its gas and oil field asset has been appraised. As such, the profit for the year was recorded at HK$134 million.
As Organization of the Petroleum Exporting Countries (OPEC) agreed in November 2016 to cut production by 1.2 million barrels a day in the first half of 2017 to reduce a global supply of crude oil, optimism has appeared in the gas and oil markets. "It seems that the oil supply recovery is gathering momentum in the world oil market, stimulated by gradually rising prices as well as improvements in drilling efficiency and well productivity in North America," OPEC says in its March 2017 report. Most of the projections have indicated that oil prices are on the recovery path. Nevertheless, the markets are still confronted with ongoing uncertainties and challenges. Therefore, we will make correct assessment of the situation, and as opportunities arise, will consider seeking new investors with solid financial strength to expand our gas and oil business and/or to explore new business developments.
2016 was also a year of transition. Due to his prolonged illness and his need for extensive rehabilitation to aid his recovery after two cranial surgeries, Mr. Wong Kwan resigned as chairman, executive director, chairman of the nomination committee and authorized representative of the Company on 20 October 2016. We thank Mr. Wong’s tremendous contribution for his service rendered to the company and sincerely wish him the very best in the coming years. On the same date, I was appointed the chairlady, executive director, chairlady of the nomination committee and authorized representative of the Company. In addition, Mr. Liu Ju, Mr. Tang Yau Sing Gareth and Mr. Cheung Kam Shing, Terry were appointed executive directors of the Company. I am confident that we together will bring a new impetus to the Group and will open a new chapter on the success of the Group.
Fan Amy Lizhen
Hong Kong, 31 March 2017