Exhibit 15.1





CNOOC LIMITED







Estimated



Future Reserves and Income



Attributable to Certain Leasehold Interests



and



Derived Through Certain Production Sharing
Contracts







SEC Parameters







As of



December 31, 2015



|\s\ Eric T. Nelson            
|------------------------------
|Eric T. Nelson, P.E.          
|TBPE License No. 102286       
|Managing Senior Vice President

[SEAL]



RYDER SCOTT COMPANY, L.P.

TBPE Firm Registration No. F-1580



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS









|                                                             |                          | 
|------------------------------------------------------------ | ------------------------ | 
|TBPE REGISTERED ENGINEERING FIRM F-1580                      | FAX (713) 651-0849      
|1100 LOUISIANA STREET   SUITE 4600 HOUSTON, TEXAS 77002-5294 | TELEPHONE (713) 651-9191



March 4, 2016



CNOOC Limited

No. 25, ChaoYangMenBei Dajie

DongCheng District

Beijing 100010

China

Gentlemen:



At your request, Ryder
Scott Company, L.P. (Ryder Scott) has prepared an estimate of the proved reserves, future production and income attributable to
certain leasehold interests and derived through certain production sharing contracts of CNOOC Limited (CNOOC) as of December 31,
2015. The subject properties are located in the countries of Australia, China, and Indonesia. The reserves and income data were
estimated based on the definitions and disclosure guidelines of the United States Securities and Exchange Commission (SEC) contained
in Title 17, Code of Federal Regulations, Modernization of Oil and Gas Reporting, Final Rule released January 14, 2009 in the Federal
Register (SEC regulations). Our third party study, completed on March 2, 2016 and presented herein, was prepared for public disclosure
by CNOOC in filings made with the SEC in accordance with the disclosure requirements set forth in the SEC regulations.



The properties evaluated
by Ryder Scott account for a portion of CNOOC’s total net proved reserves as of December 31, 2015. Based on information provided
by CNOOC, the third party estimate conducted by Ryder Scott addresses 38 percent of the total proved developed net liquid hydrocarbon
reserves, 51 percent of the total proved developed net gas reserves, 12 percent of the total proved undeveloped net liquid hydrocarbon
reserves and 37 percent of the total proved undeveloped net gas reserves of CNOOC.



The estimated reserves
and future net income amounts presented in this report, as of December 31, 2015, are related to hydrocarbon prices. The hydrocarbon
prices used in the preparation of this report are based on the average prices during the 12-month period prior to the “as
of date” of this report, determined as the unweighted arithmetic averages of the prices in effect on the first-day-of-the-month
for each month within such period, unless prices were defined by contractual arrangements, as required by the SEC regulations.
Actual future prices may vary significantly from the prices required by SEC regulations; therefore, volumes of reserves actually
recovered and the amounts of income actually received may differ significantly from the estimated quantities presented in this
report. The results of this study are summarized in the following table.









|SUITE  600,  1015  4TH  STREET,
    S.W. | CALGARY, ALBERTA T2R 1J4    | TEL (403) 262-2799 | FAX (403) 262-2790
|---------------------------------------- | --------------------------- | ------------------ | ------------------
|621  17TH STREET, SUITE 1550             | DENVER, COLORADO 80293-1501 | TEL (303) 623-9147 | FAX (303) 623-4258






CNOOC Limited March 4, 2016 Page 2


SEC PARAMETERS

Estimated Net Reserves and Income Data

Attributable to Certain Leasehold Interests
and

Derived Through Certain Production Sharing
Contracts of

CNOOC Limited

|As of December 31, 2015
|-----------------------



|                         |  | Proved   
|------------------------ |  | ---------
|                         |  | Developed
|                         |  | Producing
|Net Remaining Reserves   |  |          
|Oil/Condensate – Barrels |  |          
|Plant Products – Barrels |  |          
|Gas – MMCF               |  |          
|                         |  |          
|Income Data (M$)         |  |          
|Future Gross Revenue     |  | $        
|Deductions               |  |          
|Future Net Income (FNI)  |  | $        
|                         |  |          
|Discounted FNI @ 10%     |  | $        



Liquid hydrocarbons
are expressed in standard 42 gallon barrels. All gas volumes are reported on an “as sold basis” expressed in millions
of cubic feet (MMCF) at the official temperature and pressure bases of the areas in which the gas reserves are located.In
this report, the revenues, deductions, and income data are expressed as thousands of U.S. dollars (M$).



The estimates of the
reserves, future production, and income attributable to properties in this report were prepared using the economic software package
Cashflow, a proprietary program of Ryder Scott. Ryder Scott notes that certain summaries and calculations may vary due to rounding
and may not exactly match the sum of the properties being summarized. Furthermore, one line economic summaries may vary slightly
from the more detailed cash flow projections of the same properties, also due to rounding. The rounding differences are not material.



The future gross revenue
is after the deduction of the Natural Resource Tax and Value Added Tax (VAT) in China and royalties in Australia which are shown
as “production taxes.” The deductions incorporate the normal direct costs of operating the wells, recompletion costs,
development costs, certain abandonment costs net of salvage and Domestic Market Obligation fees in Indonesia which are shown as
“other” deductions. The future net income is before the deduction of foreign government income taxes and general administrative
overhead, and has not been adjusted for outstanding loans that may exist, nor does it include any adjustment for cash on hand or
undistributed income. Liquid hydrocarbon reserves account for approximately 54 percent and gas reserves account for the remaining
46 percent of total future gross revenue from proved reserves.



The discounted future
net income shown above was calculated using a discount rate of 10 percent per annum compounded monthly. Future net income was discounted
at four other discount rates which were also compounded monthly. These results are shown in summary form as follows.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS


CNOOC Limited March 4, 2016 Page 3


|              |    | Discounted Future Net Income (M$)
|------------- | -- | ---------------------------------
|              |    | As of December 31, 2015          
|Discount Rate |    | Total                            
|Percent       |    | Proved                           
|              |    |                                  
|              | 7  |                                  
|              | 8  |                                  
|              | 9  |                                  
|              | 11 |                                  
|              |    |                                  

The results shown above
are presented for your information and should not be construed as our estimate of fair market value.



Reserves Included in This Report



The proved reserves
included herein conform to the definition as set forth in the Securities and Exchange Commission’s Regulations Part 210.4-10(a).
An abridged version of the SEC reserves definitions from 210.4-10(a) entitled “Petroleum Reserves Definitions” is included
as an attachment to this report.



The various proved reserve
status categories are defined under the attachment entitled “Petroleum Reserves Status Definitions and Guidelines”
in this report. The proved developed non-producing reserves included herein consist of the shut-in and behind pipe categories.



No attempt was made
to quantify or otherwise account for any accumulated gas production imbalances that may exist. The provedgas volumes included herein do not attribute gas consumed in operations as reserves.



Reserves are “estimated
remaining quantities of oil and gas and related substances anticipated to be economically producible, as of a given date, by application
of development projects to known accumulations.” All reserve estimates involve an assessment of the uncertainty relating
the likelihood that the actual remaining quantities recovered will be greater or less than the estimated quantities determined
as of the date the estimate is made. The uncertainty depends chiefly on the amount of reliable geologic and engineering data available
at the time of the estimate and the interpretation of these data. The relative degree of uncertainty may be conveyed by placing
reserves into one of two principal categories, either proved or unproved. Unproved reserves are less certain to be recovered than
proved reserves, and may be further sub-categorized as probable and possible reserves to denote progressively increasing uncertainty
in their recoverability. At CNOOC’s request, this report addresses only the proved reserves attributable to the properties
evaluated herein.



Proved oil and gas reserves
are “those quantities of oil and gas which, by analysis of geoscience and engineering data, can be estimated with reasonable
certainty to be economically producible from a given date forward.” The proved reserves included herein were estimated using
deterministic methods. The SEC has defined reasonable certainty for proved reserves, when based on deterministic methods, as a
“high degree of confidence that the quantities will be recovered.”



Provedreserve estimates will generally be revised only as additional geologic or engineering data become available or as economic
conditions change. For proved reserves, the SEC states that “as changes due to increased availability of geoscience (geological,
geophysical, and geochemical), engineering, and economic data are made to the estimated ultimate recovery (EUR) with time, reasonably
certain EUR is much more likely to increase or remain constant than to decrease.”



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CNOOC Limited March 4, 2016 Page 4




Moreover, estimates
of proved reserves may be revised as a result of future operations, effects of regulation by governmental agencies or geopolitical
or economic risks. Therefore, the proved reserves included in this report are estimates only and should not be construed as being
exact quantities, and if recovered, the revenues therefrom, and the actual costs related thereto, could be more or less than the
estimated amounts.



The proved reserves
reported herein are limited to the period prior to expiration of current contracts providing the legal rights to produce, or a
revenue interest in such production, unless evidence indicates that contract renewal is reasonably certain. Furthermore, properties
in the different countries may be subjected to significantly varying contractual fiscal terms that affect the net revenue to CNOOC
for the production of these volumes. The prices and economic return received for these net volumes can vary significantly based
on the terms of these contracts. Therefore, when applicable, Ryder Scott reviewed the fiscal terms of such contracts and discussed
with CNOOC the net economic benefit attributed to such operations for the determination of the net hydrocarbon volumes and income
thereof. Ryder Scott has not conducted an exhaustive audit or verification of such contractual information. Neither our review
of such contractual information nor our acceptance of CNOOC’s representations regarding such contractual information should
be construed as a legal opinion on this matter.



This report includes
certain volumes of proved reserves attributable to royalties owed to the host government that are treated as taxes to be paid in
cash. In Australia, the government has received the royalty payments in cash, and CNOOC is reasonably certain the government will
continue to receive its royalty in cash. These future royalty payments, if converted to reserves, are equivalent to 0.5 percent
of CNOOC’s total net proved reserves as evaluated by Ryder Scott on a barrel equivalent (BOE) basis calculated by converting
natural gas using a factor of 6,000 cubic feet of natural gas per one barrel of oil equivalent.



Ryder Scott did not
evaluate the country and geopolitical risks in the countries where CNOOC operates or has interests. CNOOC’s operations may
be subject to various levels of governmental controls and regulations. These controls and regulations may include, but may not
be limited to, matters relating to land tenure and leasing, the legal rights to produce hydrocarbons including the granting, extension
or termination of production sharing contracts, the fiscal terms of various production sharing contracts, drilling and production
practices, environmental protection, marketing and pricing policies, royalties, various taxes and levies including income tax and
are subject to change from time to time. Such changes in governmental regulations and policies may cause volumes of proved reserves
actually recovered and amounts of proved income actually received to differ significantly from the estimated quantities.



The estimates of proved
reserves presented herein were based upon a detailed study of the properties in which CNOOC ownsand derivesan interest;
however, we have not made any field examination of the properties. No consideration was given in this report to potential environmental
liabilities that may exist nor were any costs included for potential liabilities to restore and clean up damages, if any, caused
by past operating practices.



Estimates of Reserves



The estimation of reserves
involves two distinct determinations. The first determination results in the estimation of the quantities of recoverable oil and
gas and the second determination results in the estimation of the uncertainty associated with those estimated quantities in accordance
with the definitions set forth by the Securities and Exchange Commission’s Regulations Part 210.4-10(a). The process of estimating
the quantities of recoverable oil and gas reserves relies on the use of certain



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS


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generally accepted analytical
procedures. These analytical procedures fall into three broad categories or methods: (1) performance-based methods; (2) volumetric-based
methods; and (3) analogy. These methods may be used individually or in combination by the reserve evaluator in the process of estimating
the quantities of reserves. Reserve evaluators must select the method or combination of methods which in their professional judgment
is most appropriate given the nature and amount of reliable geoscience and engineering data available at the time of the estimate,
the established or anticipated performance characteristics of the reservoir being evaluated and the stage of development or producing
maturity of the property.



In many cases, the analysis
of the available geoscience and engineering data and the subsequent interpretation of this data may indicate a range of possible
outcomes in an estimate, irrespective of the method selected by the evaluator. When a range in the quantity of reserves is identified,
the evaluator must determine the uncertainty associated with the incremental quantities of the reserves. If the reserve quantities
are estimated using the deterministic incremental approach, the uncertainty for each discrete incremental quantity of the reserves
is addressed by the reserve category assigned by the evaluator. Therefore, it is the categorization of reserve quantities as proved,
probable and/or possible that addresses the inherent uncertainty in the estimated quantities reported. For proved reserves, uncertainty
is defined by the SEC as reasonable certainty wherein the “quantities actually recovered are much more likely than not to
be achieved.” The SEC states that “probable reserves are those additional reserves that are less certain to be recovered
than proved reserves but which, together with proved reserves, are as likely as not to be recovered.” The SEC states that
“possible reserves are those additional reserves that are less certain to be recovered than probable reserves and the total
quantities ultimately recovered from a project have a low probability of exceeding proved plus probable plus possible reserves.”
All quantities of reserves within the same reserve category must meet the SEC definitions as noted above.



Estimates of reserves
quantities and their associated reserve categories may be revised in the future as additional geoscience or engineering data become
available. Furthermore, estimates of reserves quantities and their associated reserve categories may also be revised due to other
factors such as changes in economic conditions, results of future operations, effects of regulation by governmental agencies or
geopolitical or economic risks as previously noted herein.



The proved reserves
for the properties included herein were estimated by performance methods, the volumetric method, analogy or a combination of methods.
The following table summarizes the approximate percent of reserves estimated by each of these methods.



|            |  | Approximate Percent Proved Reserves Estimated by the Various Methods
|----------- |  | --------------------------------------------------------------------
|            |  | Liquid Hydrocarbons                                                 
|Method      |  | Developed                                                           
|Performance |  |                                                                     
|Volumetric  |  |                                                                     
|Analogy     |  |                                                                     
|Combination |  |                                                                     



These performance methods
include, but may not be limited to, decline curve analysis and material balance which utilized extrapolations of historical production
and pressure data available through October 31, 2015 in those cases where such data were considered to be definitive. The data
utilized in this analysis were supplied to Ryder Scott by CNOOC and were considered sufficient for the purpose thereof. The volumetric
method, analogy or a combination of methods were used where there were inadequate historical performance data to establish a definitive
trend and where the use of



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS


CNOOC Limited March 4, 2016 Page 6




production performance
data as a basis for the reserve estimates was considered to be inappropriate. The volumetric analysis utilized pertinent well and
seismic data supplied to Ryder Scott by CNOOC that were available through October 31, 2015. The data utilized from the analogues
as well as the well and seismic data incorporated into our volumetric analysis were considered sufficient for the purpose thereof.



To estimate economically
recoverable proved oil and gas reserves and related future net cash flows, we consider many factors and assumptions including,
but not limited to, the use of reservoir parameters derived from geological, geophysical and engineering data that cannot be measured
directly, economic criteria based on current costs and SEC pricing requirements, and forecasts of future production rates. Under
the SEC regulations 210.4-10(a)(22)(v) and (26), proved reserves must be anticipated to be economically producible from a given
date forward based on existing economic conditions including the prices and costs at which economic producibility from a reservoir
is to be determined. While it may reasonably be anticipated that the future prices received for the sale of production and the
operating costs and other costs relating to such production may increase or decrease from those under existing economic conditions,
such changes were, in accordance with rules adopted by the SEC, omitted from consideration in making this evaluation.



CNOOC has informed us
that they have furnished us all of the material accounts, records, geological and engineering data, and reports and other data
required for this investigation. In preparing our forecast of future proved production and income, we have relied upon data furnished
by CNOOC with respect to property interests ownedorderived, production and well tests from examined wells, normal
direct costs of operating the wells or leases, other costs such as transportation and/or processing fees, Natural Resource Tax,
Value Added Tax and Windfall Profits Taxes in China, Royalties in Australia and Domestic Market Obligation fees in Indonesia, recompletion
and development costs, abandonment costs after salvage, product prices based on the SEC regulations, adjustments or differentials
to product prices, geological structural and isochore maps, well logs, core analyses and pressure measurements. Ryder Scott reviewed
such factual data for its reasonableness; however, we have not conducted an independent verification of the data furnished by CNOOC.
We consider the factual data used in this report appropriate and sufficient for the purpose of preparing the estimates of reserves
and future net revenues herein.



In summary, we consider
the assumptions, data, methods and analytical procedures used in this report appropriate for the purpose hereof, and we have used
all such methods and procedures that we consider necessary and appropriate to prepare the estimates of reserves herein. The proved
reserves included herein were determined in conformance with the United States Securities and Exchange Commission (SEC) Modernization
of Oil and Gas Reporting; Final Rule, including all references to Regulation S-X and Regulation S-K, referred to herein collectively
as the “SEC Regulations.” In our opinion, the proved reserves presented in this report comply with the definitions,
guidelines and disclosure requirements as required by the SEC regulations.



Future Production Rates



For wells currently
on production, our forecasts of future production rates are based on historical performance data. If no production decline trend
has been established, future production rates were held constant, or adjusted for the effects of curtailment where appropriate,
until a decline in ability to produce was anticipated. An estimated rate of decline was then applied to depletion of the reserves.
If a decline trend has been established, this trend was used as the basis for estimating future production rates.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS


CNOOC Limited March 4, 2016 Page 7


Test data and other
related information were used to estimate the anticipated initial production rates for those wells or locations that are not currently
producing. For reserves not yet on production, sales were estimated to commence at an anticipated date furnished by CNOOC. Wells
or locations that are not currently producing may start producing earlier or later than anticipated in our estimates due to unforeseen
factors causing a change in the timing to initiate production. Such factors may include delays due to weather, the availability
of rigs, the sequence of drilling, completing and/or recompleting wells and/or constraints set by regulatory bodies.



The future production
rates from wells currently on production or wells or locations that are not currently producing may be more or less than estimated
because of changes including, but not limited to, reservoir performance, operating conditions related to surface facilities, compression
and artificial lift, pipeline capacity and/or operating conditions, producing market demand and/or allowables or other constraints
set by regulatory bodies.



Hydrocarbon Prices



The hydrocarbon prices
used herein are based on SEC price parameters using the average prices during the 12-month period prior to the “as of date”
of this report, determined as the unweighted arithmetic averages of the prices in effect on the first-day-of-the-month for each
month within such period, unless prices were defined by contractual arrangements. For hydrocarbon products sold under contract,
the contract prices, including fixed and determinable escalations, exclusive of inflation adjustments, were used until expiration
of the contract. Upon contract expiration, the prices were adjusted to the 12-month unweighted arithmetic average as previously
described.



CNOOCfurnished
us with the above mentioned average prices in effect on December 31, 2015. These initial SEC hydrocarbon prices were determined
using the 12-month average first-day-of-the-month benchmark prices appropriate to the geographic area where the hydrocarbons are
sold. These benchmark prices are prior to the adjustments for differentials as described herein. The following table summarizes
the “benchmark prices” and “price reference” used for the geographic areas included in the report. In certain
geographic areas, the price reference and benchmark prices may be defined by contractual arrangements.



The product prices that
were actually used to determine the future gross revenue for each property reflect adjustments to the benchmark prices for gravity,
quality, local conditions, gathering and transportation fees and/or distance from market, referred to herein as “differentials.”
The differentials used in the preparation of this report were furnished to us by CNOOC. The differentials furnished by CNOOC were
reviewed by us for their reasonableness using information furnished by CNOOC for this purpose.



In addition, the following
table summarizes the net volume weighted benchmark prices adjusted for differentials and referred to herein as the “average
realized prices.” The average realized prices shown in the table below were determined from the total future gross revenue
before production taxes and the total net reserves for the geographic area and presented in accordance with SEC disclosure requirements
for each of the geographic areas included in the report.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS


CNOOC Limited March 4, 2016 Page 8




|Geographic Area           | Product                   | Price Reference | Average 
Benchmark 
Prices* | Average
        Proved
        Realized
        Prices
|------------------------- | ------------------------- | --------------- | --------------------------- | ------------------------------------------------------
|China                     | Oil/Condensate            | Daqing          | $48.12/Bbl                  | $49.57/Bbl                                            
|Duri                      | $48.41/Bbl               
|Tapis                     | $57.58/Bbl               
|WTI Cushing               | $50.28/Bbl               
|NGLs                      | Jinzhou                   | $607.97/MT      | $42.65/Bbl                 
|Maoming                   | $599.89/MT               
|Gas                       | Gas Sales Agreements      | $11.42/MCF     
|Asia                      | Oil/Condensate            | Cinta           | $51.69/Bbl                  | $52.71/Bbl                                            
|Bontang Return Condensate | $53.43/Bbl               
|Lalang                    | $53.93/Bbl               
|Senipah Condensate        | $53.91/Bbl               
|Widuri                    | $51.75/Bbl               
|NGLs                      | Bontang Return Condensate | $53.43/Bbl      | $45.92/Bbl                 
|Gas                       | Gas Sales Agreements      | $7.54/MCF      
|JCC                       | $55.02/Bbl               
|SoCal Border (ICE)        | $2.60/MMBTU              
|Oceania                   | Oil/Condensate            | Brent           | $54.13/Bbl                  | $46.33/Bbl                                            
|NGLs                      | Saudi CP                  | $427.76/MT      | $51.96/Bbl                 
|Gas                       | JCC                       | $55.02/Bbl      | $3.23/MCF                  



*In this report, the benchmark prices for
certain NGLs were based on U.S. dollars per metric ton (MT).



The effects of derivative
instruments designated as price hedges of oil and gas quantities are not reflected in our individual property evaluations.



Costs



Operating costs for
the leases and wells in this report are based on the operating expense reports of CNOOC and include only those costs directly applicable
to the leases or wells. The operating costs include a portion of general and administrative costs allocated directly to the leases
and wells. The operating costs furnished to us were accepted as factual data and reviewed by us for their reasonableness; however,
we have not conducted an independent verification of the operating cost data used by CNOOC. No deduction was made for loan
repayments, interest expenses or exploration and development prepayments that were not charged directly to the leases or wells.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS


CNOOC Limited March 4, 2016 Page 9




Development costs were
furnished to us by CNOOC and are based on authorizations for expenditure for the proposed work or actual costs for similar projects.
The development costs furnished to us were accepted as factual data and reviewed by us for their reasonableness; however, we have
not conducted an independent verification of these costs. The estimated net cost of abandonment after salvage was included for
properties where abandonment costs net of salvage were significant. The estimates of the net abandonment costs furnished by CNOOC
were accepted without independent verification.



The proved developed
non-producing and undeveloped reserves in this report have been incorporated herein in accordance with CNOOC’s plans to develop
these reserves as of December 31, 2015. The implementation of CNOOC’s development plans as presented to us and incorporated
herein is subject to the approval process adopted by CNOOC’s management. As the result of our inquiries during the course
of preparing this report, CNOOC has informed us that the development activities included herein have been subjected to and received
the internal approvals required by CNOOC’s management at the appropriate local, regional and/or corporate level. In addition
to the internal approvals as noted, certain development activities may still be subject to specific partner AFE processes, Joint
Operating Agreement (JOA) requirements or other administrative approvals external to CNOOC. Additionally,CNOOC has informed us that they are not aware of any legal, regulatory or political obstacles that would significantly alter
their plans. While these plans could change from those under existing economic conditions as of December 31, 2015, such changes
were, in accordance with rules adopted by the SEC, omitted from consideration in making this evaluation.



The initial production
date of certain proved undeveloped gas fields/reservoirs in Australia, China and Indonesia were scheduled beyond the SEC nominal
5 year development period because these fields/reservoirs are associated with long term gas contracts or LNG sales, and their gas
deliverability are not needed within the 5 year period. The reserves from these fields/reservoirs represent 5 percent of the total
net proved reserves of CNOOC as evaluated by Ryder Scott on a barrel equivalent (BOE) basis using the conversion factor as previously
noted. CNOOC and its partners anticipated for these fields/reservoirs to be developed prior to the expiration of the long term
gas sales and LNG sales and purchase agreement period.



Current costs used by
CNOOC were held constant throughout the life of the properties.



Standards of Independence and Professional
Qualification



Ryder Scott is an independent
petroleum engineering consulting firm that has been providing petroleum consulting services throughout the world since 1937. Ryder
Scott is employee-owned and maintains offices in Houston, Texas; Denver, Colorado; and Calgary, Alberta, Canada. We have over eighty
engineers and geoscientists on our permanent staff. By virtue of the size of our firm and the large number of clients for which
we provide services, no single client or job represents a material portion of our annual revenue. We do not serve as officers or
directors of any privately-owned or publicly-traded oil and gas company and are separate and independent from the operating and
investment decision-making process of our clients. This allows us to bring the highest level of independence and objectivity to
each engagement for our services.



Ryder Scott actively
participates in industry-related professional societies and organizes an annual public forum focused on the subject of reserves
evaluations and SEC regulations. Many of our staff have authored or co-authored technical papers on the subject of reserves related
topics. We encourage our staff to maintain and enhance their professional skills by actively participating in ongoing continuing
education.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS


CNOOC Limited March 4, 2016 Page 10




Prior to becoming an
officer of the Company, Ryder Scott requires that staff engineers and geoscientists have received professional accreditation in
the form of a registered or certified professional engineer’s license or a registered or certified professional geoscientist’s
license, or the equivalent thereof, from an appropriate governmental authority or a recognized self-regulating professional organization.



We are independent petroleum
engineers with respect to CNOOC. Neither we nor any of our employees have any financial interest in the subject properties and
neither the employment to do this work nor the compensation is contingent on our estimates of reserves for the properties which
were reviewed.



The results of this
study, presented herein, are based on technical analysis conducted by teams of geoscientists and engineers from Ryder Scott. The
professional qualifications of the undersigned, the technical person primarily responsible for overseeing the evaluation of the
reserves information discussed in this report, are included as an attachment to this letter.



Terms of Usage



The results of our third
party study, presented in report form herein, were prepared in accordance with the disclosure requirements set forth in the SEC
regulations and intended for public disclosure as an exhibit in filings made with the SEC by CNOOC Limited.



CNOOC makes periodic
filings on Form 20-F with the SEC under the 1934 Exchange Act. Furthermore, CNOOC has certain registration statements filed with
the SEC under the 1933 Securities Act into which any subsequently filed Form 20-F is incorporated by reference. We have consented
to the incorporation by reference in the registration statements on Form F-3 of CNOOC of the references to our name as well as
to the references to our third party report for CNOOC, which appears in the December 31, 2015 annual report on Form 20-F of CNOOC.
Our written consent for such use is included as a separate exhibit to the filings made with the SEC by CNOOC.



We have provided CNOOC
Limited with a digital version of the original signed copy of this report letter. In the event there are any differences between
the digital version included in filings made by CNOOC Limited and the original signed report letter, the original signed report
letter shall control and supersede the digital version.



The data and work papers
used in the preparation of this report are available for examination by authorized parties in our offices. Please contact us if
we can be of further service.



Very truly yours,



RYDER SCOTT COMPANY, L.P.

TBPE Firm Registration No. F-1580



\s\ Eric T. Nelson





Eric T. Nelson, P.E.

TBPE License No. 102286

Managing Senior Vice President	 [SEAL]



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS


CNOOC Limited March 4, 2016 Page 11




ETN (DPR)/pl



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS







Professional Qualifications of Primary
Technical Person



The conclusions presented in this report
are the result of technical analysis conducted by teams of geoscientists and engineers from Ryder Scott Company, L.P. Mr. Eric
T. Nelson is the primary technical person responsible for the estimate of the reserves, future production and income.



Mr. Nelson, an employee of Ryder Scott Company,
L.P. (Ryder Scott) since 2005, is a Managing Senior Vice President responsible for ongoing reservoir evaluation studies worldwide.
Before joining Ryder Scott, Mr. Nelson served in a number of engineering positions with Exxon Mobil Corporation. For more information
regarding Mr. Nelson’s geographic and job specific experience, please refer to the Ryder Scott Company website at www.ryderscott.com/Company/Employees.



Mr. Nelson earned a Bachelor of Science
degree in Chemical Engineering from the University of Tulsa in 2002 (summa cum laude) and a Master of Business Administration from
the University of Texas in 2007 (Dean’s Award). He is a licensed Professional Engineer in the State of Texas. Mr. Nelson
is also a member of the Society of Petroleum Engineers.



In addition to gaining experience and competency
through prior work experience, the Texas Board of Professional Engineers requires a minimum of 15 hours of continuing education
annually, including at least one hour in the area of professional ethics, which Mr. Nelson fulfills. As part of his 2015 continuing
education hours, Mr. Nelson attended over 20 hours of training during 2015 covering such topics as updates concerning the implementation
of the latest SEC oil and gas reporting requirements, evaluations of resource play reserves, evaluation of simulation models, procedures
and software, and ethics training.



Based on his educational background, professional
training and more than 10 years of practical experience in the estimation and evaluation of petroleum reserves, Mr. Nelson has
attained the professional qualifications as a Reserves Estimator set forth in Article III of the “Standards Pertaining to
the Estimating and Auditing of Oil and Gas Reserves Information” promulgated by the Society of Petroleum Engineers as of
February 19, 2007.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS





PETROLEUM RESERVES DEFINITIONS



As Adapted From:

RULE 4-10(a) of REGULATION S-X PART 210

UNITED STATES SECURITIES AND EXCHANGE
COMMISSION (SEC)



PREAMBLE



On January 14, 2009,
the United States Securities and Exchange Commission (SEC) published the “Modernization of Oil and Gas Reporting; Final Rule”
in the Federal Register of National Archives and Records Administration (NARA). The “Modernization of Oil and Gas Reporting;
Final Rule” includes revisions and additions to the definition section in Rule 4-10 of Regulation S-X, revisions and additions
to the oil and gas reporting requirements in Regulation S-K, and amends and codifies Industry Guide 2 in Regulation S-K. The “Modernization
of Oil and Gas Reporting; Final Rule”, including all references to Regulation S-X and Regulation S-K, shall be referred to
herein collectively as the “SEC regulations”. The SEC regulations take effect for all filings made with the United
States Securities and Exchange Commission as of December 31, 2009, or after January 1, 2010. Reference should be made to the full
text under Title 17, Code of Federal Regulations, Regulation S-X Part 210, Rule 4-10(a) for the complete definitions (direct passages
excerpted in part or wholly from the aforementioned SEC document are denoted in italics herein).



Reserves are estimated
remaining quantities of oil and gas and related substances anticipated to be economically producible, as of a given date, by application
of development projects to known accumulations. All reserve estimates involve an assessment of the uncertainty relating the
likelihood that the actual remaining quantities recovered will be greater or less than the estimated quantities determined as of
the date the estimate is made. The uncertainty depends chiefly on the amount of reliable geologic and engineering data available
at the time of the estimate and the interpretation of these data. The relative degree of uncertainty may be conveyed by placing
reserves into one of two principal classifications, either proved or unproved. Unproved reserves are less certain to be recovered
than proved reserves and may be further sub-classified as probable and possible reserves to denote progressively increasing uncertainty
in their recoverability. Under the SEC regulations as of December 31, 2009, or after January 1, 2010, a company may optionally
disclose estimated quantities of probable or possible oil and gas reserves in documents publicly filed with the SEC. The SEC regulations
continue to prohibit disclosure of estimates of oil and gas resources other than reserves and any estimated values of such resources
in any document publicly filed with the SEC unless such information is required to be disclosed in the document by foreign or state
law as noted in §229.1202 Instruction to Item 1202.



Reserves estimates will
generally be revised only as additional geologic or engineering data become available or as economic conditions change.



Reserves may be attributed
to either natural energy or improved recovery methods. Improved recovery methods include all methods for supplementing natural
energy or altering natural forces in the reservoir to increase ultimate recovery. Examples of such methods are pressure maintenance,
natural gas cycling, waterflooding, thermal methods, chemical flooding, and the use of miscible and immiscible displacement fluids.
Other improved recovery methods may be developed in the future as petroleum technology continues to evolve.



Reserves may be attributed
to either conventional or unconventional petroleum accumulations. Petroleum accumulations are considered as either conventional
or unconventional based on the nature of their in-place characteristics, extraction method applied, or degree of processing prior
to sale.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS


PETROLEUM RESERVES DEFINITIONS Page 2




Examples of unconventional
petroleum accumulations include coalbed or coalseam methane (CBM/CSM), basin-centered gas, shale gas, gas hydrates, natural bitumen
and oil shale deposits. These unconventional accumulations may require specialized extraction technology and/or significant processing
prior to sale.



Reserves do not include
quantities of petroleum being held in inventory.



Because of the differences
in uncertainty, caution should be exercised when aggregating quantities of petroleum from different reserves categories.



RESERVES (SEC DEFINITIONS)



Securities and Exchange
Commission Regulation S-X §210.4-10(a)(26) defines reserves as follows:



Reserves.Reserves are
estimated remaining quantities of oil and gas and related substances anticipated to be economically producible, as of a given date,
by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonable expectation
that there will exist, the legal right to produce or a revenue interest in the production, installed means of delivering oil and
gas or related substances to market, and all permits and financing required to implement the project.



Note to paragraph (a)(26): Reserves
should not be assigned to adjacent reservoirs isolated by major, potentially sealing, faults until those reservoirs are penetrated
and evaluated as economically producible. Reserves should not be assigned to areas that are clearly separated from a known accumulation
by a non-productive reservoir (i.e., absence of reservoir, structurally low reservoir, or negative test results). Such areas
may contain prospective resources (i.e., potentially recoverable resources from undiscovered accumulations).



PROVED RESERVES (SEC DEFINITIONS)



Securities and Exchange
Commission Regulation S-X §210.4-10(a)(22) defines proved oil and gas reserves as follows:



Proved oil and gas reserves.Proved
oil and gas reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated
with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing
economic conditions, operating methods, and government regulations—prior to the time at which contracts providing the right
to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic
methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably
certain that it will commence the project within a reasonable time.



(i) The area of the reservoir
considered as proved includes:



(A) The area identified by drilling
and limited by fluid contacts, if any, and



(B) Adjacent undrilled portions
of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible
oil or gas on the basis of available geoscience and engineering data.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS


PETROLEUM RESERVES DEFINITIONS Page 3




PROVED RESERVES (SEC DEFINITIONS)
CONTINUED



(ii) In the absence of data
on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons (LKH) as seen in a well penetration
unless geoscience, engineering, or performance data and reliable technology establishes a lower contact with reasonable certainty.



(iii) Where direct observation
from well penetrations has defined a highest known oil (HKO) elevation and the potential exists for an associated gas cap, proved
oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering, or performance
data and reliable technology establish the higher contact with reasonable certainty.



(iv) Reserves which can be
produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are
included in the proved classification when:



(A) Successful testing by a pilot
project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed
program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable certainty
of the engineering analysis on which the project or program was based; and



(B) The project has been approved
for development by all necessary parties and entities, including governmental entities.



(v) Existing economic conditions
include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average price
during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic
average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements,
excluding escalations based upon future conditions.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS







PETROLEUM RESERVES STATUS DEFINITIONS
AND GUIDELINES



As Adapted From:

RULE 4-10(a) of REGULATION S-X PART 210

UNITED STATES SECURITIES AND EXCHANGE
COMMISSION (SEC)



and



PETROLEUM RESOURCES MANAGEMENT SYSTEM
(SPE-PRMS)

Sponsored and Approved by:

SOCIETY OF PETROLEUM ENGINEERS (SPE)

WORLD PETROLEUM COUNCIL (WPC)

AMERICAN ASSOCIATION OF PETROLEUM GEOLOGISTS
(AAPG)

SOCIETY OF PETROLEUM EVALUATION ENGINEERS
(SPEE)



Reserves status categories
define the development and producing status of wells and reservoirs. Reference should be made to Title 17, Code of Federal Regulations,
Regulation S-X Part 210, Rule 4-10(a) and the SPE-PRMS as the following reserves status definitions are based on excerpts from
the original documents (direct passages excerpted from the aforementioned SEC and SPE-PRMS documents are denoted in italics herein).



DEVELOPED RESERVES (SEC DEFINITIONS)



Securities and Exchange
Commission Regulation S-X §210.4-10(a)(6) defines developed oil and gas reserves as follows:



Developed oil and gas reserves
are reserves of any category that can be expected to be recovered:



(i) Through existing wells with
existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost
of a new well; and



(ii) Through
installed extraction equipment and infrastructure operational at the time of the reserves estimate if the extraction is by means
not involving a well.



Developed Producing (SPE-PRMS Definitions)



While not a requirement
for disclosure under the SEC regulations, developed oil and gas reserves may be further sub-classified according to the guidance
contained in the SPE-PRMS as Producing or Non-Producing.



Developed Producing Reserves



Developed Producing Reserves
are expected to be recovered from completion intervals that are open and producing at the time of the estimate.



Improved recovery reserves
are considered producing only after the improved recovery project is in operation.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS


PETROLEUM RESERVES STATUS DEFINITIONS AND GUIDELINE Page 2




Developed Non-Producing

Developed Non-Producing Reserves
include shut-in and behind-pipe reserves.



Shut-In

Shut-in Reserves are expected
to be recovered from:

| | (1) | completion intervals which are open at the time of the estimate, but which have not started
producing;
| | --- | ------------------------------------------------------------------------------------------------------



| | (2) | wells which were shut-in for market conditions or pipeline connections; or
| | --- | --------------------------------------------------------------------------



| | (3) | wells not capable of production for mechanical reasons.
| | --- | -------------------------------------------------------



Behind-Pipe

Behind-pipe Reserves are expected
to be recovered from zones in existing wells, which will require additional completion work or future re-completion prior to start
of production.



In all cases, production can
be initiated or restored with relatively low expenditure compared to the cost of drilling a new well.



UNDEVELOPED RESERVES (SEC DEFINITIONS)



Securities and Exchange
Commission Regulation S-X §210.4-10(a)(31) defines undeveloped oil and gas reserves as follows:



Undeveloped oil and gas reserves
are reserves of any category that are expected to be recovered from new wells on undrilled acreage, or from existing wells where
a relatively major expenditure is required for recompletion.



| | (i) | Reserves on undrilled acreage shall be limited to those directly offsetting development spacing
areas that are reasonably certain of production when drilled, unless evidence using reliable technology exists that establishes
reasonable certainty of economic producibility at greater distances.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



(ii) Undrilled locations can
be classified as having undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to
be drilled within five years, unless the specific circumstances, justify a longer time.



(iii) Under no circumstances
shall estimates for undeveloped reserves be attributable to any acreage for which an application of fluid injection or other improved
recovery technique is contemplated, unless such techniques have been proved effective by actual projects in the same reservoir
or an analogous reservoir, as defined in paragraph (a)(2) of this section, or by other evidence using reliable technology establishing
reasonable certainty.



RYDER SCOTT COMPANY PETROLEUM CONSULTANTS











CNOOC LIMITED







Estimated



Future Reserves and Income



CNOOC’s 20% Ownership of



Pan American Energy LLC









SEC Parameters









As of



December 31, 2015



|\s\ Eric T. Nelson             |  | \s\ Anna M. Hardesty  
|------------------------------ |  | ----------------------
|Eric T. Nelson, P.E.           |  | Anna M. Hardesty, P.E.
|TBPE License No. 102286        |  | TBPE License No.65320 
|Managing Senior Vice President |  | Senior Vice President 
|[SEAL]                         |  | [SEAL]                



RYDER SCOTT COMPANY, L.P.

TBPE Firm Registration No. F-1580



RYDER SCOTT COMPANY   PETROLEUM CONSULTANTS











|                                                             |                          | 
|------------------------------------------------------------ | ------------------------ | 
|TBPE REGISTERED ENGINEERING FIRM F-1580                      | FAX (713) 651-0849      
|1100 LOUISIANA STREET   SUITE 4600 HOUSTON, TEXAS 77002-5294 | TELEPHONE (713) 651-9191





February 22, 2016



CNOOC Limited

No. 25, ChaoYangMenBei Dajie

DongCheng District

Beijing 100010

China



Gentlemen:



At your request, Ryder
Scott Company, L.P. (Ryder Scott) has prepared an estimate of the proved reserves, future production and income attributable to
CNOOC Limited’s 20 percent ownership of Pan American Energy LLC (Pan American) as of December 31, 2015. The subject properties
are located in the country of Argentina. The reserves and income data were estimated based on the definitions and disclosure guidelines
of the United States Securities and Exchange Commission (SEC) contained in Title 17, Code of Federal Regulations, Modernization
of Oil and Gas Reporting, Final Rule released January 14, 2009 in the Federal Register (SEC regulations). Our third party study,
completed on February 2, 2016 and presented herein, was prepared for public disclosure by CNOOC in filings made with the SEC in
accordance with the disclosure requirements set forth in the SEC regulations.



The properties evaluated
by Ryder Scott account for a portion of CNOOC’s total net proved reserves as of December 31, 2015. Based on information provided
by CNOOC, the third party estimate conducted by Ryder Scott addresses 0.13 percent of the total proved developed net liquid hydrocarbon
reserves, 4.35 percent of the total proved developed net gas reserves, 0.05 percent of the total proved undeveloped net liquid
hydrocarbon reserves and 2.60 percent of the total proved undeveloped net gas reserves of CNOOC.



The estimated reserves
and future net income amounts presented in this report, as of December 31, 2015, are related to hydrocarbon prices. The hydrocarbon
prices used in the preparation of this report are based on the average prices during the 12-month period prior to the “as
of date” of this report, determined as the unweighted arithmetic averages of the prices in effect on the first-day-of-the-month
for each month within such period, unless prices were defined by contractual arrangements, as required by the SEC regulations.
Actual future prices may vary significantly from the prices required by SEC regulations; therefore, volumes of reserves actually
recovered and the amounts of income actually received may differ significantly from the estimated quantities presented in this
report. The results of this study are summarized in the following table.







|SUITE  600,  1015  4TH  STREET,
    S.W. | CALGARY, ALBERTA T2R 1J4    | TEL (403) 262-2799 | FAX (403) 262-2790
|---------------------------------------- | --------------------------- | ------------------ | ------------------
|621  17TH STREET, SUITE 1550             | DENVER, COLORADO 80293-1501 | TEL (303) 623-9147 | FAX (303) 623-4258



RYDER SCOTT COMPANY   PETROLEUM CONSULTANTS


CNOOC LimitedFebruary 22, 2016Page 2


SEC PARAMETERS

Estimated Net Reserves and Income Data

CNOOC Limited’s 20% Ownership of

Pan American Energy, LLC

|As of December 31, 2015
|-----------------------



|                            |  | Proved – SEC Definitions
|--------------------------- |  | ------------------------
|                            |  | Developed               
|                            |  | Producing               
|Net Remaining Reserves      |  |                         
|Oil/Cond/Gasoline – Barrels |  |                         
|Gas – MMCF                  |  |                         
|                            |  |                         
|Income Data (M$)            |  |                         
|Future Gross Revenue        |  | $                       
|Deductions                  |  |                         
|Future Net Income (FNI)     |  | $                       
|                            |  |                         
|Discounted FNI @ 10%        |  | $                       



Liquid hydrocarbons
are expressed in standard 42 gallon barrels and include volumes of gasoline, which are stripped from the gas and sold as oil. All
gas volumes are reported on an “as sold basis” expressed in millions of cubic feet (MMCF) at the official temperature
and pressure bases of the areas in which the gas reserves are located.In this report, the revenues, deductions, and income
data are expressed as thousands of U.S. dollars (M$).



The estimates of the
reserves, future production, and income attributable to properties in this report were prepared using the economic software package
AriesTM Petroleum Economics and Reserves Software, a copyrighted program of Halliburton. Ryder Scott has found this
program to be generally acceptable, but notes that certain summaries and calculations may vary due to rounding and may not exactly
match the sum of the properties being summarized. Furthermore, one line economic summaries may vary slightly from the more detailed
cash flow projections of the same properties, also due to rounding. The rounding differences are not material.



The future gross revenue
is not subject to direct production taxes. The deductions incorporate the normal direct costs of operating the wells, recompletion
costs, development costs, provincial royalty payments and certain abandonment costs net of salvage. The future net income is before
the deduction of Argentine federal income taxes and general administrative overhead, and has not been adjusted for outstanding
loans that may exist nor does it include any adjustment for cash on hand or undistributed income.



Gas reserves account
for approximately 86.1 percent of the total future gross revenue from proved reserves, and liquid hydrocarbon reserves account
for the remaining 13.9 percent of the total future gross revenue from proved reserves.



The discounted future
net income shown above was calculated using a discount rate of 10 percent per annum compounded monthly. Future net income was discounted
at four other discount rates which were also compounded monthly. These results are shown in summary form as follows.



RYDER SCOTT COMPANY   PETROLEUM CONSULTANTS


CNOOC LimitedFebruary 22, 2016Page 3




|              |    | Discounted Future Net Income (M$)
|------------- | -- | ---------------------------------
|              |    | As of December 31, 2015          
|Discount Rate |    | Total                            
|Percent       |    | Proved                           
|              |    |                                  
|              | 7  |                                  
|              | 8  |                                  
|              | 9  |                                  
|              | 11 |                                  



The results shown above
are presented for your information and should not be construed as our estimate of fair market value.



Reserves Included in This Report



The proved reserves
included herein conform to the definition as set forth in the Securities and Exchange Commission’s Regulations Part 210.4-10(a).
An abridged version of the SEC reserves definitions from 210.4-10(a) entitled “Petroleum Reserves Definitions” is included
as an attachment to this report.



The various proved reserve
status categories are defined under the attachment entitled “Petroleum Reserves Status Definitions and Guidelines”
in this report. The proved developed non-producing reserves included herein consist of the shut-in and behind pipe categories.



No attempt was made
to quantify or otherwise account for any accumulated gas production imbalances that may exist. The provedgas volumes presented herein do not include gas consumed in operations as reserves.



Reserves are “estimated
remaining quantities of oil and gas and related substances anticipated to be economically producible, as of a given date, by application
of development projects to known accumulations.” All reserve estimates involve an assessment of the uncertainty relating
the likelihood that the actual remaining quantities recovered will be greater or less than the estimated quantities determined
as of the date the estimate is made. The uncertainty depends chiefly on the amount of reliable geologic and engineering data available
at the time of the estimate and the interpretation of these data. The relative degree of uncertainty may be conveyed by placing
reserves into one of two principal categories, either proved or unproved. Unproved reserves are less certain to be recovered than
proved reserves, and may be further sub-categorized as probable and possible reserves to denote progressively increasing uncertainty
in their recoverability. At CNOOC’s request, this report addresses only the proved reserves attributable to the properties
evaluated herein.



Proved oil and gas reserves
are “those quantities of oil and gas which, by analysis of geoscience and engineering data, can be estimated with reasonable
certainty to be economically producible from a given date forward.” The proved reserves included herein were estimated using
deterministic methods. The SEC has defined reasonable certainty for proved reserves, when based on deterministic methods, as a
“high degree of confidence that the quantities will be recovered.”



Provedreserve estimates will generally be revised only as additional geologic or engineering data become available or as economic
conditions change. For proved reserves, the SEC states that “as changes due to increased availability of geoscience (geological,
geophysical, and geochemical), engineering, and economic data are made to the estimated ultimate recovery (EUR) with time,



RYDER SCOTT COMPANY   PETROLEUM CONSULTANTS


CNOOC LimitedFebruary 22, 2016Page 4




reasonably certain EUR
is much more likely to increase or remain constant than to decrease.” Moreover, estimates of proved reserves may be revised
as a result of future operations, effects of regulation by governmental agencies or geopolitical or economic risks. Therefore,
the proved reserves included in this report are estimates only and should not be construed as being exact quantities, and if recovered,
the revenues therefrom, and the actual costs related thereto, could be more or less than the estimated amounts.



The proved reserves
reported herein are limited to the period prior to expiration of current contracts providing the legal rights to produce, or a
revenue interest in such production, unless evidence indicates that contract renewal is reasonably certain. Furthermore, properties
in the country of Argentina may be subjected to significantly varying contractual fiscal terms that affect the net revenue to Pan
American and/or CNOOC for the production of these volumes. The prices and economic return received for these net volumes can vary
significantly based on the terms of these contracts. Therefore, when applicable, Ryder Scott reviewed the fiscal terms of such
contracts and discussed with Pan American the net economic benefit attributed to such operations for the determination of the net
hydrocarbon volumes and income thereof. Ryder Scott has not conducted an exhaustive audit or verification of such contractual information.
Neither our review of such contractual information nor our acceptance of Pan American’s representations regarding such contractual
information should be construed as a legal opinion on this matter.



Ryder Scott did not
evaluate the country and geopolitical risks in Argentina where CNOOC has interests. Pan American’s and CNOOC’s operations
may be subject to various levels of governmental controls and regulations. These controls and regulations may include, but may
not be limited to, matters relating to land tenure and leasing, the legal rights to produce hydrocarbons including the granting,
extension or termination of production sharing contracts, the fiscal terms of various production sharing contracts, drilling and
production practices, environmental protection, marketing and pricing policies, royalties, various taxes and levies including income
tax and are subject to change from time to time. Such changes in governmental regulations and policies may cause volumes of proved
reserves actually recovered and amounts of proved income actually received to differ significantly from the estimated quantities.



The estimates of proved
reserves presented herein were based upon a detailed study of the properties in which CNOOC ownsor derivesan interest;
however, we have not made any field examination of the properties. No consideration was given in this report to potential environmental
liabilities that may exist nor were any costs included for potential liabilities to restore and clean up damages, if any, caused
by past operating practices.



Estimates of Reserves



The estimation of reserves
involves two distinct determinations. The first determination results in the estimation of the quantities of recoverable oil and
gas and the second determination results in the estimation of the uncertainty associated with those estimated quantities in accordance
with the definitions set forth by the Securities and Exchange Commission’s Regulations Part 210.4-10(a). The process of estimating
the quantities of recoverable oil and gas reserves relies on the use of certain generally accepted analytical procedures. These
analytical procedures fall into three broad categories or methods: (1) performance-based methods; (2) volumetric-based methods;
and (3) analogy. These methods may be used individually or in combination by the reserve evaluator in the process of estimating
the quantities of reserves. Reserve evaluators must select the method or combination of methods which in their professional judgment
is most appropriate given the nature and amount of reliable geoscience and engineering data available at the time of the estimate,
the established or



RYDER SCOTT COMPANY   PETROLEUM CONSULTANTS


CNOOC LimitedFebruary 22, 2016Page 5




anticipated performance
characteristics of the reservoir being evaluated and the stage of development or producing maturity of the property.



In many cases, the analysis
of the available geoscience and engineering data and the subsequent interpretation of this data may indicate a range of possible
outcomes in an estimate, irrespective of the method selected by the evaluator. When a range in the quantity of reserves is identified,
the evaluator must determine the uncertainty associated with the incremental quantities of the reserves. If the reserve quantities
are estimated using the deterministic incremental approach, the uncertainty for each discrete incremental quantity of the reserves
is addressed by the reserve category assigned by the evaluator. Therefore, it is the categorization of reserve quantities as proved,
probable and/or possible that addresses the inherent uncertainty in the estimated quantities reported. For proved reserves, uncertainty
is defined by the SEC as reasonable certainty wherein the “quantities actually recovered are much more likely than not to
be achieved.” The SEC states that “probable reserves are those additional reserves that are less certain to be recovered
than proved reserves but which, together with proved reserves, are as likely as not to be recovered.” The SEC states that
“possible reserves are those additional reserves that are less certain to be recovered than probable reserves and the total
quantities ultimately recovered from a project have a low probability of exceeding proved plus probable plus possible reserves.”
All quantities of reserves within the same reserve category must meet the SEC definitions as noted above.



Estimates of reserves
quantities and their associated reserve categories may be revised in the future as additional geoscience or engineering data become
available. Furthermore, estimates of reserves quantities and their associated reserve categories may also be revised due to other
factors such as changes in economic conditions, results of future operations, effects of regulation by governmental agencies or
geopolitical or economic risks as previously noted herein.



The proved reserves
for the properties included herein were estimated by performance methods, the volumetric method, analogy or a combination of methods.
The following table summarizes the approximate percent of reserves estimated by each of these methods.



|            |  | Approximate Percent of Proved Reserves Estimated by the Various Methods
|----------- |  | -----------------------------------------------------------------------
|            |  | Liquid Hydrocarbons                                                    
|Method      |  | Developed                                                              
|Performance |  |                                                                        
|Volumetric  |  |                                                                        
|Analogy     |  |                                                                        
|Combination |  |                                                                        



These performance methods
include, but may not be limited to, decline curve analysis and material balance which utilized extrapolations of historical production
and pressure data available through October 31, 2015 in those cases where such data were considered to be definitive. The data
utilized in this analysis were supplied to Ryder Scott by Pan American and were considered sufficient for the purpose thereof.
The volumetric method, analogy or a combination of methods were used where there were inadequate historical performance data to
establish a definitive trend and where the use of production performance data as a basis for the reserve estimates was considered
to be inappropriate. The volumetric analysis utilized pertinent well and seismic data supplied to Ryder Scott by Pan American that
were available through December 31, 2015. The data utilized from the analogues as well as the well and seismic data incorporated
into our volumetric analysis were considered sufficient for the purpose thereof.



RYDER SCOTT COMPANY   PETROLEUM CONSULTANTS


CNOOC LimitedFebruary 22, 2016Page 6




To estimate economically
recoverable proved oil and gas reserves and related future net cash flows, we consider many factors and assumptions including,
but not limited to, the use of reservoir parameters derived from geological, geophysical and engineering data that cannot be measured
directly, economic criteria based on current costs and SEC pricing requirements, and forecasts of future production rates. Under
the SEC regulations 210.4-10(a)(22)(v) and (26), proved reserves must be anticipated to be economically producible from a given
date forward based on existing economic conditions including the prices and costs at which economic producibility from a reservoir
is to be determined. While it may reasonably be anticipated that the future prices received for the sale of production and the
operating costs and other costs relating to such production may increase or decrease from those under existing economic conditions,
such changes were, in accordance with rules adopted by the SEC, omitted from consideration in making this evaluation.



Pan American has informed
us that they have furnished us all of the material accounts, records, geological and engineering data, and reports and other data
required for this investigation. In preparing our forecast of future proved production and income, we have relied upon data furnished
by Pan American with respect to property interests owned by CNOOC, production and well tests from examined wells, normal direct
costs of operating the wells or contracts, other costs such as transportation and/or processing fees, provincial royalty payments,
recompletion and development costs, development plans, abandonment costs after salvage, product prices based on the SEC regulations,
adjustments or differentials to product prices, geological structural and isochore maps, well logs, core analyses, and pressure
measurements. Ryder Scott reviewed such factual data for its reasonableness; however, we have not conducted an independent verification
of the data furnished by Pan American. We consider the factual data used in this report appropriate and sufficient for the purpose
of preparing the estimates of reserves and future net revenues herein.



In summary, we consider
the assumptions, data, methods and analytical procedures used in this report appropriate for the purpose hereof, and we have used
all such methods and procedures that we consider necessary and appropriate to prepare the estimates of reserves herein. The proved
reserves included herein were determined in conformance with the United States Securities and Exchange Commission (SEC) Modernization
of Oil and Gas Reporting; Final Rule, including all references to Regulation S-X and Regulation S-K, referred to herein collectively
as the “SEC Regulations.” In our opinion, the proved reserves presented in this report comply with the definitions,
guidelines and disclosure requirements as required by the SEC regulations.



Future Production Rates



For wells currently
on production, our forecasts of future production rates are based on historical performance data. If no production decline trend
has been established, future production rates were held constant, or adjusted for the effects of curtailment where appropriate,
until a decline in ability to produce was anticipated. An estimated rate of decline was then applied to depletion of the reserves.
If a decline trend has been established, this trend was used as the basis for estimating future production rates.



Test data and other
related information were used to estimate the anticipated initial production rates for those wells or locations that are not currently
producing. For reserves not yet on production, sales were estimated to commence at an anticipated date furnished by Pan American.
Wells or locations that are not currently producing may start producing earlier or later than anticipated in our estimates due
to unforeseen factors causing a change in the timing to initiate production. Such factors may include delays due to weather, the
availability of rigs, the sequence of drilling, completing and/or recompleting wells and/or constraints set by regulatory bodies.



RYDER SCOTT COMPANY   PETROLEUM CONSULTANTS


CNOOC LimitedFebruary 22, 2016Page 7




The future production
rates from wells currently on production or wells or locations that are not currently producing may be more or less than estimated
because of changes including, but not limited to, reservoir performance, operating conditions related to surface facilities, compression
and artificial lift, pipeline capacity and/or operating conditions, producing market demand and/or allowables or other constraints
set by regulatory bodies.



Hydrocarbon Prices



The hydrocarbon prices
used herein are based on SEC price parameters using the average prices during the 12-month period prior to the “as of date”
of this report, determined as the unweighted arithmetic averages of the prices in effect on the first-day-of-the-month for each
month within such period, unless prices were defined by contractual arrangements. For hydrocarbon products sold under contract,
the contract prices, including fixed and determinable escalations, exclusive of inflation adjustments, were used until expiration
of the contract. Upon contract expiration, the prices were adjusted to the 12-month unweighted arithmetic average as previously
described.



Pan Americanfurnished
us with the above mentioned average prices in effect on December 31, 2015. These initial SEC hydrocarbon prices were determined
using the 12-month average first-day-of-the-month benchmark prices appropriate to the geographic area where the hydrocarbons are
sold. These benchmark prices are prior to the adjustments for differentials as described herein. The table below summarizes the
“benchmark prices” and “price reference” used for the geographic areas included in the report. In certain
geographic areas, the price reference and benchmark prices may be defined by contractual arrangements.



The product prices that
were actually used to determine the future gross revenue for each property reflect adjustments to the benchmark prices for gravity,
quality, local conditions, gathering and transportation fees, buoy and storage fees, turnover tax fees and/or distance from market,
referred to herein as “differentials.” The differentials used in the preparation of this report were furnished to us
by Pan American. The differentials furnished to us were accepted as factual data and reviewed by us for their reasonableness; however,
we have not conducted an independent verification of the data used by Pan American to determine these differentials.



Certain gas prices for
low permeability reservoirs, economically marginal, and capital intensive projects were provided by Pan American based on governmental
price allowances for such gas. These price allowances are approved by the Argentine government on a case by case basis. Such higher
gas price allowances under a program designated as “Gas Plus” by the Argentine government are being paid for volumes
of gas delivered by Pan American from certain properties that meet these higher gas price criteria.



In addition, the table
below summarizes the net volume weighted benchmark prices adjusted for differentials and referred to herein as the “average
realized prices.” The average realized prices shown in the following table were determined from the total future gross revenue
before production taxes and the total net reserves for the geographic area and presented in accordance with SEC disclosure requirements
for each of the geographic areas included in the report.



RYDER SCOTT COMPANY   PETROLEUM CONSULTANTS


CNOOC LimitedFebruary 22, 2016Page 8




|Geographic
        Area | Product           | Price
        Reference         | Average Benchmark
        
        Prices | Average
        Realized
        Prices
|----------------------- | ----------------- | ------------------------------- | ----------------------------------------- | ---------------------------------------
|Argentina               | Oil/Cond/Gasoline | Medanito
        
        Hidra | $75.40/Bbl
        
        $69.60/Bbl    | $72.08/Bbl                             
|                        | Gas               | Various Contracts               | N/A                                       | $4.42/MCF                              



The effects of derivative
instruments designated as price hedges of oil and gas quantities are not reflected in our individual property evaluations.



Costs



Operating costs for
the properties and wells in this report were furnished by Pan American and are based on their operating expense reports. These
costs include only those costs directly applicable to the properties or wells. The operating costs include a portion of general
and administrative costs allocated directly to the properties and wells. For operated properties, the operating costs include an
appropriate level of corporate general administrative and overhead costs. The operating costs for non-operated properties include
the overhead costs that are allocated directly to the properties and wells under terms of operating agreements. The operating costs
furnished to us were accepted as factual data and reviewed by us for their reasonableness; however, we have not conducted an independent
verification of the operating cost data used by Pan American. No deduction was made for loan repayments, interest expenses, or
exploration and development prepayments that were not charged directly to the properties or wells.



Development costs were
furnished to us by Pan American and are based on authorizations for expenditure for the proposed work or actual costs for similar
projects. The development costs furnished to us were accepted as factual data and reviewed by us for their reasonableness; however,
we have not conducted an independent verification of these costs. The estimated net cost of abandonment after salvage was
included for properties where abandonment costs net of salvage were significant. The estimates of the net abandonment costs furnished
by Pan American were accepted without independent verification.



The proved developed
non-producing and undeveloped reserves in this report have been incorporated herein in accordance with Pan American’s and
CNOOC’s plans to develop these reserves as of December 31, 2015. The implementation of Pan American’s development plans
as presented to us and incorporated herein is subject to the approval process adopted by Pan American’s management. As the
result of our inquiries during the course of preparing this report, Pan American and CNOOC have informed us that the development
activities included herein have been subjected to and received the internal approvals required by Pan American’s management
at the appropriate local, regional and/or corporate level. In addition to the internal approvals as noted, certain development
activities may still be subject to specific partner AFE processes, Joint Operating Agreement (JOA) requirements or other administrative
approvals external to Pan American and CNOOC. Additionally, Pan American has informed us that they are not aware of any legal,
regulatory or political obstacles that would significantly alter their plans. While these plans could change from those under existing
economic conditions as of December 31, 2015, such changes were, in accordance with rules adopted by the SEC, omitted from consideration
in making this evaluation.



RYDER SCOTT COMPANY   PETROLEUM CONSULTANTS


CNOOC LimitedFebruary 22, 2016Page 9




The plan of development
for the gas reserves to be produced from the offshore fields in the Austral Basin calls for five future wells in the Carina field
and three in the Vega Pleyade field which are scheduled to be drilled beyond five years from the date they were initially categorized
as proved undeveloped. Pan American has provided us with a letter explaining the reasons for such a delay. In our opinion, Pan
American has a coherent and reasonable explanation for deferring the drilling of these wells as scheduled and we have assigned
the reserves corresponding to this development as proven.



Current costs were held
constant throughout the life of the properties.



Standards of Independence and Professional
Qualification



Ryder Scott is an independent
petroleum engineering consulting firm that has been providing petroleum consulting services throughout the world since 1937. Ryder
Scott is employee-owned and maintains offices in Houston, Texas; Denver, Colorado; and Calgary, Alberta, Canada. We have over eighty
engineers and geoscientists on our permanent staff. By virtue of the size of our firm and the large number of clients for which
we provide services, no single client or job represents a material portion of our annual revenue. We do not serve as officers or
directors of any privately-owned or publicly-traded oil and gas company and are separate and independent from the operating and
investment decision-making process of our clients. This allows us to bring the highest level of independence and objectivity to
each engagement for our services.



Ryder Scott actively
participates in industry-related professional societies and organizes an annual public forum focused on the subject of reserves
evaluations and SEC regulations. Many of our staff have authored or co-authored technical papers on the subject of reserves related
topics. We encourage our staff to maintain and enhance their professional skills by actively participating in ongoing continuing
education.



Prior to becoming an
officer of the Company, Ryder Scott requires that staff engineers and geoscientists have received professional accreditation in
the form of a registered or certified professional engineer’s license or a registered or certified professional geoscientist’s
license, or the equivalent thereof, from an appropriate governmental authority or a recognized self-regulating professional organization.



We are independent petroleum
engineers with respect to CNOOC Limited and Pan American. Neither we nor any of our employees have any financial interest in the
subject properties and neither the employment to do this work nor the compensation is contingent on our estimates of reserves for
the properties which were reviewed.



The results of this
study, presented herein, are based on technical analysis conducted by teams of geoscientists and engineers from Ryder Scott. The
professional qualifications of the undersigned, the technical person primarily responsible for overseeing the evaluation of the
reserves information discussed in this report, are included as an attachment to this letter.



Terms of Usage



The results of our third
party study, presented in report form herein, were prepared in accordance with the disclosure requirements set forth in the SEC
regulations and intended for public disclosure as an exhibit in filings made with the SEC by CNOOC Limited.



RYDER SCOTT COMPANY   PETROLEUM CONSULTANTS


CNOOC LimitedFebruary 22, 2016Page 10




CNOOC makes periodic
filings on Form 20-F with the SEC under the 1934 Exchange Act. Furthermore, CNOOC has certain registration statements filed with
the SEC under the 1933 Securities Act into which any subsequently filed Form 20-F is incorporated by reference. We have consented
to the incorporation by reference in the registration statements on Form F-3 of CNOOC of the references to our name as well as
to the references to our third party report for CNOOC, which appears in the December 31, 2015 annual report on Form 20-F of CNOOC.
Our written consent for such use is included as a separate exhibit to the filings made with the SEC by CNOOC.



We have provided CNOOC
Limited with a digital version of the original signed copy of this report letter. In the event there are any differences between
the digital version included in filings made by CNOOC Limited and the original signed report letter, the original signed report
letter shall control and supersede the digital version.



The data and work papers
used in the preparation of this report are available for examination by authorized parties in our offices. Please contact us if
we can be of further service.







|Very truly yours,                 |        | 
|--------------------------------- | ------ | 
|                                  |        | 
|RYDER SCOTT COMPANY, L.P.         |        | 
|TBPE Firm Registration No. F-1580 |        | 
|                                  |        | 
|\s\ Eric T. Nelson                |        | 
|                                  |        | 
|Eric T. Nelson, P.E.              |        | 
|TBPE License No. 102286           |        | 
|Managing Senior Vice President    | [SEAL] | 
|                                  |        | 
|\s\ Anna M. Hardesty              |        | 
|                                  |        | 
|Anna M. Hardesty, P.E.            |        | 
|TBPE License No. 65320            |        | 
|Senior Vice President             | [SEAL] | 



ETN-AMH (DPR)/pl



RYDER SCOTT COMPANY   PETROLEUM CONSULTANTS







Professional Qualifications of Primary
Technical Person



The conclusions presented in this report
are the result of technical analysis conducted by teams of geoscientists and engineers from Ryder Scott Company, L.P. Anna Milena
Hardesty, P.E. is the primary technical person responsible for the estimate of the reserves, future production and income presented
herein.



Ms. Hardesty, an employee of Ryder Scott
Company, L.P. (Ryder Scott) since 2006, is a Senior Vice President responsible for coordinating and supervising staff and consulting
engineers of the company in ongoing reservoir evaluation studies worldwide. Before joining Ryder Scott, Ms. Hardesty served in
a number of engineering positions with Ryder Scott as a consulting engineer, Santa Fe Energy (now Devon), Gruy and Associates,
Golden Engineering, Pressler and Associates, and Exxon Company USA. For more information regarding Ms. Hardesty’s geographic
and job specific experience, please refer to the Ryder Scott Company website at www.ryderscott.com/Company/Employees.



Ms. Hardesty earned a Bachelor of Science
degree in Mechanical Engineering from Tulane University, New Orleans in 1981 and a Masters in Science in Business from the University
of Texas, Austin in 2001. Ms. Hardesty is a licensed Professional Engineer in the States of Texas and Florida. She is also a member
of the Society of Petroleum Engineers (SPE), the Society of Petroleum Evaluation Engineers (SPEE), the Association of International
Petroleum Negotiators (AIPN) and World Affairs Council of Houston. She is also a past Program Chairman 2011, past Treasurer 2012,
past Vice-Chairman 2013 and past Chairman 2014 for the SPEE chapter in Houston.



In addition to gaining experience and competency
through prior work experience, the Texas Board of Professional Engineers requires a minimum of fifteen hours of continuing education
annually, including at least one hour in the area of professional ethics, which Ms. Hardesty fulfills. As part of her 2015 continuing
education hours, Ms. Hardesty attended at least twenty (1-hour each) presentations on various petroleum related subjects, sponsored
by SPEE, SPE and AIPN. She also attended the SPEE annual convention (4 days) and all of the associated seminars included in the
convention, including various professional society presentations aimed at the new unconventional resource play estimations, guidelines
for probabilistic estimations and insights on PRMS guidelines. With her participation in the SPEE conference and attendance to
various other seminars and courses during 2015, Ms. Hardesty earned over 45 hours of formalized training in reservoir/petroleum
engineering, geoscience, unconventional resource evaluation methods, petroleum engineering software and ethics for consultants.



Based on her educational background, professional
training and more than 30 years of practical experience in the estimation and evaluation of petroleum reserves, Ms. Hardesty has
attained the professional qualifications as a Reserves Estimator and Reserves Auditor set forth in Article III of the “Standards
Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information” promulgated by the Society of Petroleum Engineers
as of February 19, 2007.



RYDER SCOTT COMPANY   PETROLEUM CONSULTANTS





PETROLEUM RESERVES DEFINITIONS



As Adapted From:

RULE 4-10(a) of REGULATION S-X PART 210

UNITED STATES SECURITIES AND EXCHANGE
COMMISSION (SEC)



PREAMBLE



On January 14, 2009,
the United States Securities and Exchange Commission (SEC) published the “Modernization of Oil and Gas Reporting; Final Rule”
in the Federal Register of National Archives and Records Administration (NARA). The “Modernization of Oil and Gas Reporting;
Final Rule” includes revisions and additions to the definition section in Rule 4-10 of Regulation S-X, revisions and additions
to the oil and gas reporting requirements in Regulation S-K, and amends and codifies Industry Guide 2 in Regulation S-K. The “Modernization
of Oil and Gas Reporting; Final Rule”, including all references to Regulation S-X and Regulation S-K, shall be referred to
herein collectively as the “SEC regulations”. The SEC regulations take effect for all filings made with the United
States Securities and Exchange Commission as of December 31, 2009, or after January 1, 2010. Reference should be made to the full
text under Title 17, Code of Federal Regulations, Regulation S-X Part 210, Rule 4-10(a) for the complete definitions (direct passages
excerpted in part or wholly from the aforementioned SEC document are denoted in italics herein).



Reserves are estimated
remaining quantities of oil and gas and related substances anticipated to be economically producible, as of a given date, by application
of development projects to known accumulations. All reserve estimates involve an assessment of the uncertainty relating the
likelihood that the actual remaining quantities recovered will be greater or less than the estimated quantities determined as of
the date the estimate is made. The uncertainty depends chiefly on the amount of reliable geologic and engineering data available
at the time of the estimate and the interpretation of these data. The relative degree of uncertainty may be conveyed by placing
reserves into one of two principal classifications, either proved or unproved. Unproved reserves are less certain to be recovered
than proved reserves and may be further sub-classified as probable and possible reserves to denote progressively increasing uncertainty
in their recoverability. Under the SEC regulations as of December 31, 2009, or after January 1, 2010, a company may optionally
disclose estimated quantities of probable or possible oil and gas reserves in documents publicly filed with the SEC. The SEC regulations
continue to prohibit disclosure of estimates of oil and gas resources other than reserves and any estimated values of such resources
in any document publicly filed with the SEC unless such information is required to be disclosed in the document by foreign or state
law as noted in §229.1202 Instruction to Item 1202.



Reserves estimates will
generally be revised only as additional geologic or engineering data become available or as economic conditions change.



Reserves may be attributed
to either natural energy or improved recovery methods. Improved recovery methods include all methods for supplementing natural
energy or altering natural forces in the reservoir to increase ultimate recovery. Examples of such methods are pressure maintenance,
natural gas cycling, waterflooding, thermal methods, chemical flooding, and the use of miscible and immiscible displacement fluids.
Other improved recovery methods may be developed in the future as petroleum technology continues to evolve.



Reserves may be attributed
to either conventional or unconventional petroleum accumulations. Petroleum accumulations are considered as either conventional
or unconventional based on the nature of their in-place characteristics, extraction method applied, or degree of processing prior
to sale.



RYDER SCOTT COMPANY   PETROLEUM CONSULTANTS


PETROLEUM RESERVES DEFINITIONSPage 2




Examples of unconventional
petroleum accumulations include coalbed or coalseam methane (CBM/CSM), basin-centered gas, shale gas, gas hydrates, natural bitumen
and oil shale deposits. These unconventional accumulations may require specialized extraction technology and/or significant processing
prior to sale.



Reserves do not include
quantities of petroleum being held in inventory.



Because of the differences
in uncertainty, caution should be exercised when aggregating quantities of petroleum from different reserves categories.



RESERVES (SEC DEFINITIONS)



Securities and Exchange
Commission Regulation S-X §210.4-10(a)(26) defines reserves as follows:



Reserves.Reserves are
estimated remaining quantities of oil and gas and related substances anticipated to be economically producible, as of a given date,
by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonable expectation
that there will exist, the legal right to produce or a revenue interest in the production, installed means of delivering oil and
gas or related substances to market, and all permits and financing required to implement the project.



Note to paragraph (a)(26): Reserves
should not be assigned to adjacent reservoirs isolated by major, potentially sealing, faults until those reservoirs are penetrated
and evaluated as economically producible. Reserves should not be assigned to areas that are clearly separated from a known accumulation
by a non-productive reservoir (i.e., absence of reservoir, structurally low reservoir, or negative test results). Such areas
may contain prospective resources (i.e., potentially recoverable resources from undiscovered accumulations).



PROVED RESERVES (SEC DEFINITIONS)



Securities and Exchange
Commission Regulation S-X §210.4-10(a)(22) defines proved oil and gas reserves as follows:



Proved oil and gas reserves.Proved
oil and gas reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated
with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing
economic conditions, operating methods, and government regulations—prior to the time at which contracts providing the right
to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic
methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably
certain that it will commence the project within a reasonable time.



(i) The area of the reservoir
considered as proved includes:



(A) The area identified by drilling
and limited by fluid contacts, if any, and



(B) Adjacent undrilled portions
of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible
oil or gas on the basis of available geoscience and engineering data.



RYDER SCOTT COMPANY   PETROLEUM CONSULTANTS


PETROLEUM RESERVES DEFINITIONSPage 3




PROVED RESERVES (SEC DEFINITIONS)
CONTINUED



(ii) In the absence of data
on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons (LKH) as seen in a well penetration
unless geoscience, engineering, or performance data and reliable technology establishes a lower contact with reasonable certainty.



(iii) Where direct observation
from well penetrations has defined a highest known oil (HKO) elevation and the potential exists for an associated gas cap, proved
oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering, or performance
data and reliable technology establish the higher contact with reasonable certainty.



(iv) Reserves which can be
produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are
included in the proved classification when:



(A) Successful testing by a pilot
project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed
program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable certainty
of the engineering analysis on which the project or program was based; and



(B) The project has been approved
for development by all necessary parties and entities, including governmental entities.



(v) Existing economic conditions
include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average price
during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic
average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements,
excluding escalations based upon future conditions.



RYDER SCOTT COMPANY   PETROLEUM CONSULTANTS







PETROLEUM RESERVES STATUS DEFINITIONS
AND GUIDELINES



As Adapted From:

RULE 4-10(a) of REGULATION S-X PART 210

UNITED STATES SECURITIES AND EXCHANGE
COMMISSION (SEC)



and



PETROLEUM RESOURCES MANAGEMENT SYSTEM
(SPE-PRMS)

Sponsored and Approved by:

SOCIETY OF PETROLEUM ENGINEERS (SPE)

WORLD PETROLEUM COUNCIL (WPC)

AMERICAN ASSOCIATION OF PETROLEUM GEOLOGISTS
(AAPG)

SOCIETY OF PETROLEUM EVALUATION ENGINEERS
(SPEE)



Reserves status categories
define the development and producing status of wells and reservoirs. Reference should be made to Title 17, Code of Federal Regulations,
Regulation S-X Part 210, Rule 4-10(a) and the SPE-PRMS as the following reserves status definitions are based on excerpts from
the original documents (direct passages excerpted from the aforementioned SEC and SPE-PRMS documents are denoted in italics herein).



DEVELOPED RESERVES (SEC DEFINITIONS)



Securities and Exchange
Commission Regulation S-X §210.4-10(a)(6) defines developed oil and gas reserves as follows:



Developed oil and gas reserves
are reserves of any category that can be expected to be recovered:



(i) Through existing wells with
existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost
of a new well; and



(ii) Through
installed extraction equipment and infrastructure operational at the time of the reserves estimate if the extraction is by means
not involving a well.



Developed Producing (SPE-PRMS Definitions)



While not a requirement
for disclosure under the SEC regulations, developed oil and gas reserves may be further sub-classified according to the guidance
contained in the SPE-PRMS as Producing or Non-Producing.



Developed Producing Reserves



Developed Producing Reserves
are expected to be recovered from completion intervals that are open and producing at the time of the estimate.



Improved recovery reserves
are considered producing only after the improved recovery project is in operation.



RYDER SCOTT COMPANY   PETROLEUM CONSULTANTS


PETROLEUM RESERVES STATUS DEFINITIONS AND GUIDELINESPage 2




Developed Non-Producing

Developed Non-Producing Reserves
include shut-in and behind-pipe reserves.



Shut-In

Shut-in Reserves are expected
to be recovered from:

| | (1) | completion intervals which are open at the time of the estimate, but which have not started
producing;
| | --- | ------------------------------------------------------------------------------------------------------



| | (2) | wells which were shut-in for market conditions or pipeline connections; or
| | --- | --------------------------------------------------------------------------



| | (3) | wells not capable of production for mechanical reasons.
| | --- | -------------------------------------------------------



Behind-Pipe

Behind-pipe Reserves are expected
to be recovered from zones in existing wells, which will require additional completion work or future re-completion prior to start
of production.



In all cases, production can
be initiated or restored with relatively low expenditure compared to the cost of drilling a new well.



UNDEVELOPED RESERVES (SEC DEFINITIONS)



Securities and Exchange
Commission Regulation S-X §210.4-10(a)(31) defines undeveloped oil and gas reserves as follows:



Undeveloped oil and gas reserves
are reserves of any category that are expected to be recovered from new wells on undrilled acreage, or from existing wells where
a relatively major expenditure is required for recompletion.



(i)
Reserves on undrilled acreage shall be limited to those directly offsetting development spacing areas that are reasonably certain
of production when drilled, unless evidence using reliable technology exists that establishes reasonable certainty of economic
producibility at greater distances.



(ii) Undrilled locations can
be classified as having undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to
be drilled within five years, unless the specific circumstances, justify a longer time.



(iii) Under no circumstances
shall estimates for undeveloped reserves be attributable to any acreage for which an application of fluid injection or other improved
recovery technique is contemplated, unless such techniques have been proved effective by actual projects in the same reservoir
or an analogous reservoir, as defined in paragraph (a)(2) of this section, or by other evidence using reliable technology establishing
reasonable certainty.



RYDER SCOTT COMPANY   PETROLEUM CONSULTANTS