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A 200-percent increase in net income to $15 million is just one of the positives in a recently released financial forecast from China North East Petroleum Holdings, Ltd. (OTCBB: CNEH: Summary, Messages, Articles). The company, which explores and extracts oil resources in north east China, also estimates a 133% increase in oil production in 2008 to 623,000 barrels and a 217% increase in expected revenue to $62 million.

In addition, the company’s EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is expected to increase 224% to $41 million, or $1.70 per fully diluted share. For 2008, the estimated range for fully diluted earnings per share is 62¢ to 65¢ based on a share count of about 24 million shares.

Production figures are based on CNEH’s approved oil extraction contracts with PetroChina Jilin. These contracts allow the company to operate four oilfields within the Jilin Qian’an Oilfield, and an anticipated 240 oil producing wells by year-end 2008. This is a 133% increase from 267,516 barrels produced in 2007, when the company finished the year with 157 wells.

“Our 2008 production forecast, including our anticipated results for the fiscal second half, highlight the strength and sound execution of our overall drilling operations,” said Mr. Hongjun Wang, president of China North East Petroleum. “We expect our revenue, profitability and cash position to accelerate in the second half as we further develop our oilfields in Jilin province, which are estimated to contain geological reserves in excess of 75 million barrels of oil.”

Wang also said because production costs are expected to decrease rapidly as wells are established, revenue and earnings growth should remain strong even if oil prices trend downward. A lower price also translates to a lower oil surcharge paid to the Chinese government.

“Our strong performance is expected to continue beyond 2008 as we expect to add significant production growth in 2009….” Wang said. “The fundamentals of our business are very solid and we expect our production momentum to continue well into the future.”

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