8th Sep 2008 08:45
RNS Number : 9143C
HaiKe Chemical Group Ltd.
08 September 2008
HaiKe Chemical Group Ltd.
Major Contract & Project Commencement Announcement
HaiKe Chemical Group Ltd (“HaiKe” or the “Company”), the AIM quoted (AIM: HAIK) petrochemical, speciality chemical and biochemical business based in China, is pleased to announce that it has won a major production contract from Sinopec Shandong Petroleum Branch (“SSP”).
On 11 August 2008, the Company entered into two sea crude oil purchase agreements with a subsidiary of China National Offshore Oil Corporation (“CNOOC”), under which CNOOC will supply 370,000 barrels of crude oil, in total, to HaiKe at a pre-determined premium to the Duri Indonesia Crude Price during the collection period between 21 August 2008 to 31 August 2008 (the “Oil Supply Agreement”). The terms and conditions of the Oil Supply Agreement are based on the standard form of purchase order issued by CNOOC with reference to “The General FOB Provisions for Sea Crude Oil Domestic Sales Contract (June 2007 version)” in China. CNOOC is one of the largest oil companies in China and is mainly engaged in the oil extraction business in offshore China and overseas. It is listed on New York Stock Exchange (NYSE) and Hong Kong Stock Exchange (HKSE).
On 5 September 2008 a production contract valued at approximately RMB 230 million(the “OEM Contract”) was entered into by the Company and SSP, under which HaiKe will produce refined diesel and gasoline products for SSP before 30 September 2008 using the crude oil purchased under the Oil Supply Agreement. HaiKe’s management expect the execution of these two agreements to deliver positive margin contribution to the Company’s oil refinery business.
SSP is a regional branch of China Petroleum & Chemical Corporation (“Sinopec”), one of the largest oil companies in China. Sinopec is mainly engaged in the oil refinery and extraction business; it is listed on New York Stock Exchange (NYSE) and Hong Kong Stock Exchange (HKSE).
The OEM Contract and the Oil Supply Agreementconstitute the first subcontracting arrangements entered intoby the Company. These contracts are expected to have a positive impact on the gross margins of the Company and the Directors believe that if performed satisfactorily the Company is likely to enter into similar arrangements in the future. Further to the announcement of the partial resumption of the Company’s oil refinery facilities on 4 September 2008, the Directors are delighted that these contracts enable the Company’s oil refining facilities to be operated at full capacity and for the division to make a contribution against a back drop of high crude oil prices and the capped sales price of refined products.
Mr. Yang Xiaohong, Chairman of the Company, made the following statement:
“The successful conclusion of an OEM contract demonstrates the excellent relationship between HaiKe and the large Chinese domestic oil producers, and the strong reputation that HaiKe has within the Chinese domestic market. We are delighted to have secured these contracts and will continue to explore opportunities for similar contracts for the future. As the crude oil price declines and our refinery facilities recommence operations we view the future with increasing confidence.”
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UK Cardew Group Rupert Pittman or Shan Shan Willenbrock Tel: +44(0)20-7930 0777
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China HaiKe Chemical Group Johnson Lau - Chief Finance Officer Tel: +852-3752 0631 / +852-9422 9258 |
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Evolution Securities Limited Stuart Andrews Tel: +44(0)20-7071 4300 |
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Evolution Securities China Limited Barry Saint or Esther Lee Tel: +44 (0)20-7220 4850 |
This information is provided by RNS
The company news service from the London Stock Exchange
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