CNOOC ( CEO), China's third-largest oil and gas company, focuses on exploration and production of oil and natural gas off shore from China. International operations take place in Indonesia, Nigeria and Australia. Oil and gas sales contributed 80% to 2009 operating revenue and marketing about 20%. Morningstar analysts write that "a domestic market hungry for energy and an advantageous regulatory position provide CNOOC with continued promise." Deutsche Bank ( DB) analysts said in a March 30 research report that it has a "buy" rating on its shares and raised its price target 15% because of the prospect of higher oil prices worldwide, which will boost CNOOC's earnings. It estimates that for every $1 increase in the market price of a barrel of oil, CNOOC will get a 1.3% increase in its "bottom-line earnings per share." Standard & Poor's gives it a "hold" recommendation and a three- star rating out of a possible five based on share-price valuation. It says: "CEO's growing oil output, above-average return on capital and low relative upstream costs remain key attractions," but its shares have exceeded its 12-month price target of $244. CNOOC's shares, now at $262.70, have appreciated 6.1% this year and 15% over the past year, giving it a market value of $110 billion. CNOOC is the largest holding, at 4%, of the $2 billion Fidelity China Region Fund ( FHKCX), and second-biggest of the $2.8 billion Matthews China Investor Fund ( MCHFX), at 2.9%. S&P says the company has a huge safety net. "Our view (is) that there is an extremely high likelihood that the government of the People's Republic of China (PRC) will provide sufficient and timely support in the event of financial distress."