CREIC improved the establishment of IOC and

 promoted the healthy development of E&P main business in strategic area 

Over the past year, Rising-energy kept on expanding the upstream business target of exploration and development, merging projects, completing pre-project work, improving company management system. We finished company foundation, optimization of resources, focused on development and completed the 2018 business objectives.

In 2018, the global economic situation is undergoing drastic fluctuations. A series of factors, including the trade war between China and the United States, the fluctuation of RMB exchange rate and the financing environment, have brought certain difficulties and challenges to private enterprises' investment neither civil nor abroad. In overcoming all kinds of adverse conditions, Xinhuaxia response to the national "One Belt And One Road" oil and gas cooperation policy, adhere to the company's mergers and acquisitions principle, has a remarkable business results.

We completed the geological evaluation of Kazakhstan Tenge oil and gas field project, agreement negotiation, equity transfer, development program preparation and approval, and the preliminary work of oilfield surface construction. We completed the equity transfer, project delivery, 3d seismic acquisition and development program preparation of the onshore oil field project in Kazakhstan. We also finished Kazakhstan Iron block project equity transfer, block geological evaluation and exploration deployment and other work. The implementation of these three projects enabled the company to successfully establish a foothold and make a good start in the oil and gas exploration and development in Central Asia. It not only established the business fulcrum of the company, but also initially achieved the strategic goal of business transformation of the group.

In 2018, the company insists on expanding oil and gas business in Russia. On the basis of the framework agreement on oil and gas projects, company has carried out multiple rounds of negotiations with Russian oil company to deepen the geological evaluation research and reserve assessment of the project, and make various preliminary preparations for the signing of the formal agreement of the project.

While exploring foreign markets, the company bid for the exploration right of 1086.26 km² in Wensu block, Tarim basin, Xinjiang, on January 22, 2018, and completed the block geological evaluation, 3d seismic acquisition, exploration well and risk exploration well deployment and other work.

In M&A projects at the same time, company has accomplished comprehensive researches in Kazakhstan, Russia, Iraq, Iran, Congo and other countries more than 30 optimization and evaluation of the project, select multiple projects into the pool, provide powerful guarantee for the company's future development.

In view of the Tenge oil and gas field, company focuses on the implementation of new well production, production dynamic management, measures to increase production and other work. The focus on the key technology, scientific development, strict field management and other long-term production work, has made further consolidate the development foundation of the extend Tenge oil and gas field. Since the company took over the management, the average daily output of oil fields in 2018 has been increased from 170 tons at the beginning of the year to 260 tons at the end of the year, and the oilfield benefit has been significantly improved. Through scientific management, overall arrangement and close coordination with local government departments, the company ensures efficient and high-quality completion of oil field production capacity construction projects according to time nodes, providing guarantee for oil field production and substantial future production. Considering Part of the ground facilities of the Tenge oil and gas field project are old, Through strengthening communication and coordination with local government departments and local contractor management, the project of the new treatment station phase I and phase II has been successfully completed, and the bidding for phase III project has been completed. It is planned to complete the processing capacity construction of 900 tons/day in 2019.

The company insists on taking the oil company system construction as the core, optimizing the management level, implementing the measures of increasing revenue, reducing expenditure, reducing cost and increasing efficiency. Successively completed the establishment of subsidiary companies in Beijing, Hong Kong, Dubai and Kazakhstan, standardized the company's current and future project merger and acquisition process, optimized the company's organizational structure, and effectively controlled the company's cost and expenditure. All investments and costs of the company in 2018 are well controlled within the scope of the plan at the beginning of the year.

2019 should be a harvest year for the company's upstream business on the basis of the previous years. After the completion of Tenge oil and gas field, all aspects of capacity construction have been fully carried out, which is also a key year to achieve the target of 550,000 tons of output. The shore oil field must strive to realize the exploration has the new discovery, advances solidly already discovered oil reservoir development early stage preparation work. Russia oil and gas projects to achieve the signing, financing, delivery and team building objectives. Wensu project should achieve exploration breakthrough to further enhance the value of the project. Through the work of the four key projects, we will strive to achieve the annual targets of making discoveries in exploration and making progress in development.

The exploration work of the company in 2019 focuses on the following fields: first, the exploration of Triassic fractures, fractures and caves carbonate reservoirs in Tenge oil and gas field. second is the pre-exploration of new blocks and new strata in the quayside oilfield. Third is oil exploration and expansion in block X of the Russian oil and gas project. And last one is the exploration breakthrough of clastic rock and carbonate rock in Wenshu block.

The company's development work in 2019 focuses on the production capacity construction of Tenge oil and gas field and the preliminary preparation for natural gas development, as well as the preliminary preparation for the development of the north heavy oil reservoir in the onshore oilfield.