COSL Announces Unaudited Operational Data for the First Quarter of 2007

Starting from 2007, the business of offshore oil and gas exploration and development in the PRC has been vibrant, resulting in strong demand for drilling services. For the first quarter ended 31 March 2007, the average utilization rate for drilling rigs in terms of available days reached 100.0%. In terms of calendar days, the average utilization rate was 96.

9%, representing an increase of 8.6% over that of the corresponding period in the previous year. In the first quarter, operating days for jack-up rigs has increased by 195 days or 17.5% to 1,308 days over the corresponding period last year, whereas that for jack-up rigs increased by 111 days or 12.0% when compared with the corresponding period last year.

The above changes were mainly attributable to the commencement of operation of COSL941 in June last year, leading to an increase of operating days of 90 days and a decrease of maintenance days for jack-up rigs of 21 days compared with the corresponding period last year. The operating days for semi-submersibles increased by 84 days or 45.

2% when compared with the corresponding period last year, which was mainly due to the fact that no maintenance work for NH5 and NH6 was required during the first quarter of the year.

During the first quarter, COSL recorded full operating datum of well services in respect of which the Company provided logging and directional drilling were 214 and 150 respectively, representing a year-on-year increase of 24.4% and 163.2%. Such increase was mainly due to the increasing number of drilling projects in Bohai Bay and South China Sea as per operating instruction.

COSL offered cementing of 105 wells, a surge of 87.5%, which was mainly attributable to the significant increase in operation volume of well completion and well maintenance. Furthermore, COSL provided drilling fluids and well completion services to 58 and 262 wells respectively, posting a decrease of 38.

3% and 21.1%. Despite the decreasing operation volume of drilling fluids and well completion services as compared with that of the corresponding period the previous year, income generated from both operations increased with higher service fees due to the introduction of new and advanced technological materials.

Meanwhile, COSL achieved new breakthroughs in the overseas market of its well services with the competitiveness of its cementing operation continued to enhance. In February 2007, COSL entered into a contract with The PNOC Energy Development Corporation ( PNOC-EDC ), regarding the cementing operation for LIHIR ( LIHIR ) in Papua New Guinea.

The contract lasts one year, covering a total of 20 wells with the estimated operating duration of five years. COSL will provide the design of cementing project, cementing pumps, technicians, equipments, admixtures and partial amount of cement raw materials.

Mr. Yuan Guangyu, CEO and President of COSL, said, First of all, I am pleased to witness such remarkable operational performance in the first quarter. Crude oil price in the international market during the period maintained steady growth. Amidst favorable business environment, strong demand for oilfield services by oil companies in offshore China and peripheral regions provided immense development potential to the Company.

Looking ahead, COSL is dedicated to explore international market, invest in increasing new production capability and cultivate innovative development model, so as to realize quality and rapid growth.

COSL ( COSL , stock code: 2883) is the leading integrated oilfield services provider in the offshore China market. Its services cover each phase of offshore oil and gas exploration, development and production. Its four business segments are drilling services, well services, marine support and transportation services and geophysical services.

COSL has been listed on the Main Board of the Stock Exchange of Hong Kong Limited since November 20, 2002. Since March 26, 2004, COSL's stocks can be traded by means of Level I unlisted American Depositary Receipts at OTC (over-the-counter) market in the United States. The ticker symbol is CHOLY.