CHK Oil : INTERIM RESULTS ANNOUNCEMENT 2020

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

*

(Incorporated in Bermuda with limited liability)

(Stock Code: 632)

INTERIM RESULTS ANNOUNCEMENT 2020

The board (the "Board") of directors (the "Director(s)") of CHK Oil Limited (the "Company") is pleased to announce the unaudited condensed consolidated results of the Company and its subsidiaries (collectively referred to as the "Group") for the six months ended 30 June 2020 (the "Period") with comparative figures for the corresponding period in 2019 as follows:

*For identification purpose only

- 1 -

CONDENSED CONSOLIDATED INTERIM STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

		Six months ended 30 June
		2020	2019
		(Unaudited)	(Unaudited)
	Notes	HK$'000	HK$'000
Revenue	3	87,447	78,697
Cost of sales		(85,622)	(79,094)
Gross profit (loss)		1,825		(397)
Other income		76		-
Administrative expenses		(12,885)	(17,306)
Finance costs		(2,211)	(7,615)
Loss before tax	4	(13,195)	(25,318)
Income tax (expense) credit	5	(180)	352
Loss for the period		(13,375)	(24,966)
Attributable to:
Owners of the Company		(13,375)	(25,009)
Non-controlling interests		-		43
		(13,375)	(24,966)
Other comprehensive loss for the period, net of tax
Items that may be reclassified subsequently to profit or
loss:
Exchange differences arising on translation of foreign
operations		(454)	-
Total comprehensive loss for the period		(13,829)	(24,966)
Total comprehensive (loss) profit attributable to:
Owners of the Company		(13,829)	(25,009)
Non-controlling interests		-		43
		(13,829)	(24,966)
Loss per share (HK cents)
- Basic and diluted	7	(2.18)	(15.41)

- 2 -

CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION

		At	At
		30 June	31 December
		2020		2019
		(Unaudited)	(Audited)
	Notes	HK$'000	HK$'000
Non-current assets		39,355
Property, plant and equipment	8	40,340
Right-of-use assets		1,535	3,224
Intangible assets		230,068	230,068
Statutory deposits and other assets		2,427	2,622
		273,385		276,254
Current assets		-
Trade receivables	9	3,837
Prepayments, deposits and other receivables	10	27,139		8,892
Bank balances and cash		14,042		53,889
		41,181		66,618
Current liabilities		11,010
Other payables and accruals	11		12,592
Unsecured loans	12	25,000		36,186
Leases liabilities		1,643		3,146
Tax payable		181		141
		37,834		52,065
Net current assets		3,347		14,553
Total assets less current liabilities		276,732		290,807
Non-current liabilities		29,020
Deferred tax liabilities			29,020
Lease liabilities		-	246
Asset retirement obligations		82		82
		29,102		29,348
Net assets		247,630		261,459
Equity
	122,455
Share capital	13		122,455
Reserves		124,160		137,989
Equity attributable to owners of the Company		246,615		260,444
Non-controlling interests		1,015		1,015
Total equity		247,630		261,459

- 3 -

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY

							Attributable to owners of the Company
					Treasury			Share								Non-
	Share	Share	shares	Capital	option	Translation	Accumulated			controlling	Total
	capital	premium	reserve	reserve	reserve	reserve		losses	Sub-total	interests	equity
	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000		HK$'000	HK$'000	HK$'000	HK$'000
At 31 December 2019 (Audited)	122,455	2,816,743	(10,556)	403,851	-	91	(3,072,140)	260,444	1,015	261,459
Loss for the period	-		-	-	-	-	-	(13,375)	(13,375)	-	(13,375)
Other comprehensive loss for
the period
Exchange difference arising from
translation of foreign operation	-	-	-	-	-	(454)		-	(454)	-	(454)
Total comprehensive loss for the
period	-		-	-	-	-	(454)	(13,375)	(13,829)	-	(13,829)
At 30 June 2020 (Unaudited)	122,455		2,816,743	(10,556)	403,851	-	(363)	(3,085,515)	246,615	1,015	247,630
At 31 December 2018 (Audited)	324,552		2,222,586	(10,556)	403,851	22,032	-	(2,825,331)	137,134	1,143	138,277
Total comprehensive loss for the
period	-	-	-	-	-	-	(25,009)	(25,009)	43	(24,966)
At 30 June 2019 (Unaudited)	324,552		2,222,586	(10,556)	403,851	22,032	-	(2,850,340)	112,125	1,186	113,311

- 4 -

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS

	Six months ended 30 June
	2020	2019
	(Unaudited)	(Unaudited)
	HK$'000	HK$'000
Net cash used in operating activities	(26,304)	(15,247)
Net cash used in investing activities	(8)	-
Net cash (used in)/generated from financing activities	(13,082)	14,514
Net decrease in cash and cash equivalents	(39,394)	(733)
Effect on exchange rate changes	(453)	-
Cash and cash equivalents at beginning of period	53,889		993
Cash and cash equivalents at end of period	14,042		260

- 5 -

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

1. BASIS OF PREPARATION
   The Group's unaudited condensed consolidated interim financial statements for the six months ended 30 June 2020 have been prepared in accordance with the applicable disclosure provisions of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (the "Listing Rules") and with Hong Kong Accounting Standard ("HKAS") 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA").
   The preparation of the unaudited condensed consolidated interim financial statements in conformity with HKAS 34 requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses on a year to date basis. Actual results may differ from these estimates.
   These unaudited condensed consolidated interim financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's audited consolidated financial statements for the year ended 31 December 2019.
   The unaudited condensed consolidated interim financial statements have been prepared on the historical cost basis.
2. CHANGES IN ACCOUNTING POLICIES
   The accounting policies used in preparing these unaudited condensed consolidated interim financial statements are consistent with those used in the Group's audited consolidated financial statements for the year ended 31 December 2019, except for the adoption of the new/revised Hong Kong Financial Reporting Standards ("HKFRSs") issued by the HKICPA which are relevant to the Group's operation and are effective for the Group's financial year beginning on 1 January 2020 as described below.
   Amendment to HKFRS 16, Covid-19-Related Rent Concessions
   The amendment provides a practical expedient that allows a lessee to by-pass the need to evaluate whether certain qualifying rent concessions occurring as a direct consequence of the COVID-19 pandemic ("COVID-19-relatedrent concessions") are lease modifications and, instead, account for those rent concessions as if they were not lease modifications.
   The adoption of the amendment does not have any significant impact on the unaudited condensed consolidated interim financial statements.
   As at the date of authorisation of these unaudited condensed consolidated interim financial statements, the HKICPA has issued a number of new/revised HKFRSs that are not yet effective for the current period, which the Group has not early adopted. The Group is in the process of assessing the possible impact on the future adoption of these new/revised HKFRSs but it is not yet in a position to reasonably estimate the impact on the Group's unaudited condensed consolidated interim financial statements.

- 6 -

3. REVENUE AND SEGMENT INFORMATION Segment reporting

The Group identifies operating segments and prepares segment information based on the regular internal financial information reported to the executive directors for their decisions about resources allocation to the Group's business components and for their review of the performance of those components. The business components in the internal financial information reported to the executive directors are determined following the Group's major product and service lines.

Each of the operating segments is managed separately as each of the product and service lines requires different resources as well as marketing approaches.

The Company's executive directors assess the performance of reportable segments and resources allocation based on the net profit for the period before finance costs, income tax and corporation income and expenses which are not directly attributable to the business activities of operating segment.

Segment assets exclude corporate assets which are not directly attributable to the business activities of any operating segment. Corporate assets include certain property, plant and equipment, prepayment, deposits and other receivables and bank balances and cash.

Segment liabilities exclude deferred tax liabilities and corporate liabilities which are not directly attributable to the business activities of any operating segment. Corporate liabilities include certain other payables and accruals, unsecured loans, lease liabilities and tax payable.

Disaggregation of revenue

Disaggregation of revenue from contracts with customers by major products and geographical location of customers is as follows:

	Six months ended 30 June
	2020	2019
	(Unaudited)		(Unaudited)
	HK$'000		HK$'000
Revenue from contracts with customers within the scope of
HKFRS 15
Disaggregated by major products of service lines
- Sales of oil and gas	-	104
- Sales of oil-related products	87,447		78,593
	87,447	78,697
Disaggregated by geographical location of customers
- United States of America ("USA")	-	104
- Mainland China	87,447		-
- Hong Kong	-		78,593
	87,447	78,697

- 7 -

2020
For six months ended 30 June 2020
			Trading
	Oil and gas	of oil-related
	sales	products		Total
	(Unaudited)	(Unaudited)		(Unaudited)
	HK$'000	HK$'000		HK$'000
Segment revenue	-		87,447		87,447
Segment (loss) profit	(1,279)	2,303	1,024
Unallocated income				73
Unallocated expenses				(12,115)
Finance costs					(2,177)
Loss before tax					(13,195)
Income tax expense					(180)
Loss for the period					(13,375)
At 30 June 2020
			Trading
	Oil and gas	of oil-related
	sales	products		Total
	(Unaudited)	(Unaudited)		(Unaudited)
	HK$'000	HK$'000		HK$'000
Segment assets	271,286		24,841	296,127
Unallocated assets					18,439
Total assets					314,566
Segment liabilities	2,062		303	2,365
Deferred tax liabilities				29,020
Unallocated liabilities					35,551
Total liabilities				66,936

- 8 -

2019
For six months ended 30 June 2019
			Trading
	Oil and gas	of oil-related
	sales	products			Total
	(Unaudited)	(Unaudited)			(Unaudited)
	HK$'000	HK$'000			HK$'000
Segment revenue	104		78,593		78,697
Segment (loss) profit	(1,637)	308	(1,329)
Unallocated expenses				(16,374)
Finance costs					(7,615)
Loss before tax					(25,318)
Income tax credit					352
Loss for the period				(24,966)
At 31 December 2019
			Trading
	Oil and gas	of oil-related
	sales	products			Total
	(Unaudited)	(Unaudited)			(Unaudited)
	HK$'000	HK$'000			HK$'000
Segment assets	271,361		34,928	306,289
Unallocated assets					36,583
Total assets					342,872
Segment liabilities	2,053		11,406	13,459
Deferred tax liabilities				29,020
Unallocated liabilities					38,934
Total liabilities				81,413

- 9 -

The Group's revenue from external customers and its Specified non-current assets are divided into the following geographical areas:

			Revenue from external customers		Specified non-current assets
			Six months ended 30 June		As at			As at
			2020		2019			30 June 2020	31 December 2019
			(Unaudited)	(Unaudited)		(Unaudited)			(Audited)
			HK$'000	HK$'000		HK$'000			HK$'000
	- Hong Kong
	(place of domicile)	-	78,593		2,686		5,310
	- Mainland China	87,447			-		-			-
	- USA		-			104		270,699			270,944
			87,447		78,697	273,385		276,254
4.	LOSS BEFORE TAX
	The Group's loss before tax is arrived at after charging:
									Six months ended 30 June
								2020	2019
									(Unaudited)			(Unaudited)
									HK$'000			HK$'000
	Depreciation of property, plant and equipment			993	1,128
	Depreciation of right-of-use asset			1,689	1,593
	Finance cost
	- Interest expenses on unsecured loans			2,063	7,274
	- Interests on lease liabilities			148	341
	Employee benefit expense, including director emoluments:
	- Salaries and allowances						4,943	4,794
	- Termination benefits						3,200			-
	- Retirement scheme contributions			93	79

- 10 -

5.	INCOME TAX (EXPENSE) CREDIT
		Six months ended 30 June
		2020		2019
		(Unaudited)	(Unaudited)
		HK$'000	HK$'000
	Current income tax on profits for the period:
	- People's Republic of China ("PRC") Enterprise Income Tax	(180)	-
	Deferred tax	-		352
	Total income tax (expense) credit	(180)	352

No provision for Hong Kong Profits Tax has been made as the Group's operation in Hong Kong has no assessable profits for the Period (2019: Nil). Taxation on overseas profits has been calculated on the estimated assessable profits for both periods at the rates of taxation prevailing in the countries in which the Group operates.

1. DIVIDENDS
   The directors do not recommend the payment of an interim dividend for the Period (2019: Nil).
2. LOSS PER SHARE
   The calculation of basic and diluted loss per share attributable to owners of the Company is based on the followings:

	Six months ended 30 June
	2020		2019
	(Unaudited)	(Unaudited)
Loss for the period attributable to owners of the Company
(HK$'000)	(13,375)	(25,009)
Weight average number of ordinary shares in issue ('000)	612,276		162,270
Basic loss per share (HK cents)	(2.18)	(15.41)

The weighted average number of ordinary shares has been retrospectively adjusted the effect of share consolidation on 10 July 2019.

There were no dilutive potential ordinary shares outstanding during the periods ended 30 June 2020 and 2019, therefore the diluted loss per share were the same as the basic loss per share.

- 11 -

1. PROPERTY, PLANT AND EQUIPMENT
   During the period ended 30 June 2020, additions to property, plant and equipment was approximately HK$8,000 and depreciation of approximately HK$993,000 was charged to the profit or loss for the period.
2. TRADE RECEIVABLES

	As at		As at
	30 June		31 December
	2020	2019
	(Unaudited)		(Audited)
	HK$'000		HK$'000
Trade receivables	-	3,837

As at 31 December 2019 , all trade receivables were from trading of oil-related products segment with credit terms of 30 days. These receivables were expected to be recovered within one year. Receivables that were neither past due nor impaired related to a wide range of customers for whom there was no recent history of default.

The following is an aged analysis of trade receivables net of loss allowance presented based on the invoice dates at the end of the reporting period, which approximated the respective revenue recognition dates.

	As at	As at
	30 June	31 December
	2020		2019
	(Unaudited)	(Audited)
	HK$'000	HK$'000
0 to 30 days	-	2,815
31 to 60 days	-	-
61 to 90 days	-	-
Over 90 days	-		1,022
	-	3,837

- 12 -

10. PREPAYMENTS, DEPOSITS AND OTHER RECEIVABLES

	As at	As at
	30 June	31 December
	2020		2019
	(Unaudited)	(Audited)
	HK$'000	HK$'000
Prepayments	479		905
Rental and other deposits paid	1,159		1,201
Deposit paid for acquiring Russia oil fields (note (a))	69,929		69,929
Trade deposits paid	23,371		6,215
Other receivables (note (b))	3,810		2,251
	98,748		80,501
Less: Impairment loss on other receivable (notes (a) and (b))	(71,609)	(71,609)
	27,139		8,892

Notes:

1. On 7 June 2013, the Group, through a wholly-owned subsidiary, entered into a sales and purchases agreement (the "S & P Agreement") with Levant Energy Limited ("Levant"), an independent third party, to acquire 23.10% of the total share capital of Timan Oil & Gas plc ("Timan") which held two onshore oilfields in Russia and two offshore exploration blocks in the Caspian Sea of Russia. US$10,000,000 (equivalent to approximately HK$77,706,000) was paid in cash as deposit. Details please refer to the Company's announcement dated 28 June 2013.
   As the conditions precedent to closing under the S & P Agreement were not satisfied (nor waived by the Group) on or before 30 September 2013, the S & P Agreement has terminated without reaching any agreement as to extension. Levant agreed to enter into discussions with the Group concerning the repayment of the initial consideration paid under the S & P Agreement, in the amount of US$10,000,000, less an amount equal to the costs and expenses incurred by Levant referred to in the S & P Agreement. Details please refer to the Company's announcements dated 15 October 2013 and 21 December 2013.
   Having considered the partial repayment of the initial consideration after deduction of certain costs and expenses incurred by Levant out of the initial consideration paid under the S & P Agreement in prior years, the outstanding gross amount of HK$69,929,000 had been fully provided.
2. Included in the above provision for impairment of other receivables is a provision of HK$1,680,000 for receivables from an individual that was in default on principal payments and the amount is not expected to be recovered in the foreseeable future.

- 13 -

11. OTHER PAYABLES AND ACCRUALS

	As at	As at
	30 June	31 December
	2020		2019
	(Unaudited)	(Audited)
	HK$'000	HK$'000
Accruals	2,031		3,382
Accrued directors' fee and salaries	198		948
Deferred income	144		-
Interests payables	8,491		6,439
Other payables	146		1,823
	11,010		12,592

The carrying amounts of other payables and accruals at the end of the period approximate their fair values. All of the other payables and accruals are expected to be settled or recognised as income within one year or are repayable on demand.

1. UNSECURED LOANS
   As at 30 June 2020, unsecured loans in the principal amount of HK$25,000,000 were overdue and carried interest rate of 16% per annum. During the reporting period, total sum of HK$11,186,000 unsecured loans were repaid.
2. SHARE CAPITAL

Authorised ordinary

shares of HK$0.20 each

No. of shares

'000 HK$'000

At 31 December 2019, at 1 January 2020 and at 30 June 2020	100,000,000	20,000,000

Issued and fully paid ordinary

shares of HK$0.20 each

No. of shares

'000 HK$'000

At 31 December 2019, at 1 January 2020 and at 30 June 2020	612,276	122,455

- 14 -

14. RELATED PARTIES TRANSACTION

Save as disclosed elsewhere in the unaudited condensed consolidated interim financial statements, during the Period, the Group had the following significant transactions and balances with its related parties:

Directors' material interests in transactions and arrangement

	Six months ended 30 June
	2020		2019
	(Unaudited)	(Unaudited)
	HK$'000	HK$'000
Interest expenses on unsecured loans paid to directors
- Ms. Fan Amy Lizhen*	-	233
- Mr. Lin Qing Yu	-		47
	-	280

• Ms. Fan Amy Lizhen, the former executive director of the Company who retired on 28 June 2019.

15. EVENTS AFTER THE REPORTING PERIOD

The continuous spread of COVID-19 subsequent to end of the reporting period, including but not limited to the countries in South-East Asia and North America, has an adverse impact on market sentiments and posed challenge to the global economy. At the date of this report, the Group does not expect these events have any significant adverse impacts to the Group's financial position as at 30 June 2020 and the application of going concern for the preparation of the unaudited condensed consolidated interim financial statements. The Group will pay close attention to the development of COVID-19 outbreak and take all possible and reasonable measures to mitigate the effect on the Group's operations.

- 15 -

MANAGEMENT DISCUSSION & ANALYSIS

RESULT AND REVIEW OF OPERATIONS

For the six months ended 30 June 2020, the Group focused on its principal business of (i) trading of oil-related products (the "Trading Business") and (ii) exploring, exploiting, maintenance and sales of oil and natural gas (the "Oil and Gas Business").

For the Period, the Group recorded a consolidated revenue of approximately HK$87,447,000 (2019: HK$78,697,000), and the loss attributable to the owners of the Company amounted to approximately HK$13,375,000 (2019: HK$25,009,000). Basic loss per share for the Period was HK2.18 cents (2019: HK15.41 cents).

The consolidated revenue was mainly contributed from the Trading Business. Gross profit for the Period amounted approximately HK$1,825,000 (2019: Gross loss HK$397,000), which was mainly contributed by trading of oil-related product in the Mainland China.

Loss for the Period was approximately HK$13,375,000 (2019:HK$24,966,000). The decreases was mainly due to the decrease in finance costs of unsecured loans and strengthening measures in administrative cost control of the Group as compared to that of the corresponding period last year.

BUSINESS REVIEW

Oil and Gas Business

There are seven (7) shale gas producing wells and one (1) oil well in the Utah Gas and Oil Field. This oil well broke down in May 2019 and ceased production. After comprehensive evaluations, the Group started repairing this well in February 2020. The repairment was done in March 2020. We carried out second round of repairment of well in June 2020 and it has gradually resumed production after the repairment.

- 16 -

Trading Business

Due to COVID-19 and the 2020 Russia-Saudi Arabia oil price war, the prices of oil have undergone significant fluctuations including its historical plunge of prices in early 2020 and the oil price (WTI) has dropped to US$16.50 on 20 April 2020. Although it rose above US$40 since July 2020, the price is still at historical low level (data source: http://markets.businessinsider.com).

Furthermore, amid COVID-19 pandemic, the governments all over the world has adopted strict policies to contain the spread of the virus, including quarantine and lock-down measures, which has disrupted the international trade business as result of travel restrictions and boarder closures.

Under the circumstances, the Group continued to expand its trading business domestically. At the beginning of this year, the Company has completed the capital injection of 東方明珠 (大慶)石油有限 公司 (Pearl Oriental (Daqing) Oil Limited*) (the "Relevant Subsidiary"), which is an wholly-owned subsidiary of the Company incorporated in the PRC in 2019 and is principally engaged in trading of oil and oil-related products, such as fuel oil, raw oil and crude oil, domestically. Although the lock- down and quarantine measures against the fast spread of COVID-19 severely limited business activities in the Mainland China during certain months of the Period, the Relevant Subsidiary still secured the downstream orders and achieved revenue of approximately HK$87,447,000 (For the year ended 31 December 2019: HK48,136,000) which represents 82% increase comparing to the revenue of the Relevant Subsidiary last year. Internationally, due to a sharp decline in the global demand of oil for the Period, the Group has difficulties to secure the orders from our international partners.

PROSPECTS

It remains extremely challenging for the Company for the rest of the year as there are grave uncertainties relating international oil and gas industry and the business trading segment in light of potentially further waves of outbreak of COVID-19.

Trading Business

With the possible slow economic recovery from COVID-19, the Group intends to commence trading of diluted bitumen during the second half of the year. These products will be primarily sold to market in China. Meanwhile, the Group also carefully considers the option of renting floating vessels or tankers in order to further promote the trading business.

Furthermore, the Group will also continue to expand the business to other industries, such as electronic products.

With China cautiously resuming business activities during the COVID-19 epidemic, the Group will continue to increase in trading volumes of oil-related products domestically. It is expected that the sales of trading oil-related products by the Relevant Subsidiary will be improving during the second half of the year.

- 17 -

Oil and Gas Business

Although oil price and gas price have recovered to some extent recently, the markets are still confronted with ongoing uncertainties and challenges due to the ongoing pandemic in the world. In the meantime, COVID-19 outbreak raised the cost of drilling new wells while made it extremely difficult for the Group to locate labor for oil and gas field development. Therefore, the Group will focus on regular maintenance of our current oil and gas wells for the time being. The management of the Group will continue to keep a close eye on and make assessment of the market situation from time to time. To reduce investment risk, the management may also consider seeking new co-operators and/or investors with solid financial strength to expand the Group's gas and oil business as and when opportunities arise.

LIQUIDITY, FINANCIAL RESOURCES AND CAPITAL STRUCTURE

The Group generally finances its operations from the proceeds of the subscriptions which was completed in 2019, borrowing and internally generated resources. As at 30 June 2020, the Group had approximately HK$25,000,000 unsecured loans repayable within one year (As at 31 December 2019: HK$36,186,000). The Group's cash and bank balances as at 30 June 2020 decreased to approximately HK$14,042,000 from HK$53,889,000 as at 31 December 2019, mainly due to the net effect of the repayment of unsecured loans, other payable and cash inflow from trading activities. The current ratio (calculated on the basis of the Group's current assets over current liabilities) was to 1.09 as at 30 June 2020 (As at 31 December 2019: 1.28). The Group is considering the possibility of further debt and equity fund- raisings during the second half of the year.

During the Period, the Group conducted its business transactions principally in RMB and US dollars. The Directors considered that the Group had no significant exposure to foreign exchange fluctuations and believed it was not necessary to hedge against any exchange risk. Nevertheless, the management will continue to monitor the foreign exchange exposure position and will take any future prudent measure it deems appropriate.

EMPLOYEES AND REMUNERATION POLICIES

As at 30 June 2020, the number of employees and directors of the Group was 23. The remuneration packages of employees are maintained at competitive levels and include monthly salaries, mandatory provident fund, medical insurance and share option schemes; other employee benefits include meal and travelling allowances and discretionary bonuses.

- 18 -

MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS

The Company has adopted a code of conduct regarding securities transactions by the Directors on terms no less exacting than the required standard set out in the Model Code for Securities Transactions by Directors of Listed Issuers (the "Model Code") contained in Appendix 10 to the Rules (the "Listing Rules") Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited ("Stock Exchange"). Having made specific enquiry of all Directors, the Company confirmed that all Directors have complied with the required standard set out in the Model Code and the Company's code of conduct regarding securities transactions by the Directors during the Period.

PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES

Neither the Company nor any of its subsidiaries has purchased, sold or redeemed any listed securities of the Company during the Period.

COMPLIANCE WITH THE CODE ON CORPORATE GOVERNANCE PRACTICES

The Board is committed to achieving high standard of corporate governance.

In the opinion of the Board, for the six months ended 30 June 2020, the Company has complied throughout the Period with the code provisions as set out in the Corporate Governance Code (the "CG Code") contained in Appendix 14 to the Listing Rules.

AUDIT COMMITTEE REVIEW

The Audit Committee of the Company has reviewed and confirmed with management the accounting principles and practices adopted by the Group and discussed internal controls and financial reporting matters including a general review of the unaudited interim financial report for the Period.

The Audit Committee consists of three independent non-executive Directors, namely Mr. Li Songtao (Chairman), Mr. Cao Wei and Ms. Zhong Bifeng.

CHANGE OF COMPANY NAME

Pursuant to a special resolution passed by the shareholders of the Company at the special general

meeting of the Company held on 12 December 2019, the English name of the Company was changed from "Pearl Oriental Oil Limited" to "CHK Oil Limited" and new Chinese name of "中港石油有限

公司" for identification purpose only has been adopted to replace the previous name of the Company in Chinese, namely "東方明珠石油有限公司" which was used for identification purposes only. The

change of names took effect on 5 February 2020. Details of the change of Company name are set out in the announcements of the Company dated 28 October 2019, 12 December 2019 and 5 February 2020 and the circular of the Company dated 20 November 2019.

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PUBLICATION OF INTERIM RESULTS AND INTERIM REPORT

The electronic version of this announcement is published on the website of the Stock Exchange (http://www.hkexnews.hk) and on the Company's website (http://www.chkoil.com). The interim report for the period ended 30 June 2020, containing all the information required by the Listing Rules, will be dispatched to the shareholders of the Company and published on the website of the Stock Exchange and on the Company's website in due course.

By Order of the Board

CHK Oil Limited

Liu Gui Feng

Chairlady

Hong Kong, 26 August 2020

As at the date hereof, the Board comprises six executive Directors, namely Ms. Liu Gui Feng, Mr. Chen Bin, Mr. Yu Zhibo, Mr. Lin Qing Yu, Ms. Chen Junyan, Mr. Yu Jiyuan; and three independent non-executive Directors, namely Mr. Cao Wei, Ms. Zhong Bifeng and Mr. Li Songtao.

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