News & Media

• Lower unit cost by 23% compared to 2015 as a result of efficiency improvements through “SAVE to be SAFE" and “SPEND SMART to Business Sustainability” campaigns
• Delivered solid profitability from core assets and actively seeking for new investment opportunity to heighten future production and reserves base

Bangkok October 27, 2016 -- Somporn Vongvuthipornchai, President and Chief Executive Officer of PTT Exploration and Production Public Company Limited (PTTEP) revealed that amidst the volatility of oil prices globally, the Company has successfully carried out the cost optimization and efficiency improvement activities which led to higher net profit of USD 388 million for the nine-month of 2016 compared to a net loss of USD 986 million in the same period of 2015 when the impairment loss of USD 1,385 million was recorded. During the period, operating cash flow remained healthy at USD 1,727 million, adequate to fund the capital expenditures in order to maintain the production level. Besides, the Company’s financial position remains solid with cash on hand of USD 3,722 million at the end of the third quarter of 2016 enabling the Company to pursue investment opportunities, with particular focus on producing assets or those which are soon approaching development or production stage in South East Asia as well as to expand investment in exploration project, such as the recent acquisition of Project Sarawak SK410B, situated in a high petroleum potential in Malaysia.

For the first nine-month of 2016, PTTEP reported a total revenue of USD 3,281 million, decreased from the same period of 2015 due to lower average selling prices as a result of the slump in global crude prices. The average selling price was at USD 36.00 per barrels of oil equivalent (BOE), lower compared to the same period of last year at USD 47.47 per BOE. However, petroleum sales volume stood at 320,600 barrels of oil equivalent per day (BOED), which remains on track with the business plan to maintain 2016 sales volume on par with 2015. Importantly, as a result of efficient cost management, the unit cost for the first nine-month has decreased 23% from the end of 2015 at rate USD 38.88 per BOE to USD 29.98 per BOE, surpassing the Company’s cost reduction target of 10%. As a result, the recurring net income was at USD 345 million. Also, the Company recorded non-recurring gain of USD 43 million, primarily driven by the net effect of tax savings from the appreciation in Thai Baht currency against US Dollar currency from 36.09 Baht per USD to 34.70 Baht per USD at the end of the third quarter of 2016 and the oil price hedging contracts, of which was a USD 52 million mark-to-market valuation of outstanding hedging positions that has no impact to the cash flow. 

For the third quarter of 2016, PTTEP reported a net profit of USD 156 million (equivalent to 5,446 million Baht), consisting of a recurring net profit of USD 75 million and a non-recurring income of USD 81 million. The non-recurring income mainly reflected gain on oil price hedging of USD 23 million, which partly consisted of the mark-to-market loss of outstanding hedging positions of USD 52 million at the end of the third quarter and tax savings from the appreciation of Thai Baht currency against US dollar currency.

Somporn said “PTTEP’s operating results in the nine-month of this year presented considerable improvement although the low oil prices situation still remain.  The result reflects the company’s ability to manage controllable factors mainly in production volume stabilization and “SAVE to be SAFE” cost reduction campaign.  In addition, we have now introduced the “SPEND SMART to Business Sustainability” campaign to strengthen our effort on further cost optimization initiatives which will lead to long-term competitive advantage and sustainable growth. 

Another solid achievement during the third quarter of 2016, reflecting the professionalism of our Board of Directors, Management and employees was that PTTEP being announced as a member of 2016 Dow Jones Sustainability indices (DJSI) for three consecutive years. This is also the first time the company is named the industry leader with the highest score among its peers in the World Oil and Gas Upstream & Integrated Industry. The success demonstrates PTTEP’s commitment to long-term sustainability in all three pillars; business, environment and society.”

For more information, please contact Media Management Section

Tongchit Pongorapin  Tel. +66 (0) 2537 4587          
Kamolwan Chintarat Tel. +66 (0) 2537 4000 ext. 2669
Nalin Viboonchart Tel. +66 (0) 2537 4834          
E-mail: PTTEPCorpCom@pttep.com
Facebook: http://www.facebook.com/pttepplc

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PTTEP Operation Update for the 3^rd quarter of 2016

            PTTEP currently invests 39 projects in 12 countries as follows;

Thailand: 

            The majority of projects in Thailand are in the producing phase, including the Bongkot Project, the S1 Project and the Contract 4 Project, and could continuously maintain stable production rates. 

Southeast Asia:

            The Zawtika Project has started the production operations from Phase 1B and plans to increase production capacity from the 7th producing platform in the fourth quarter of 2016, of which target to maintain the production plateau of the project.

            The Myanmar M3 Project is currently in consideration of appropriate development plan and assessing the prospects of commerciality and the resource potential in the remaining area.

            The Myanmar M 11 Project and The Myanmar MD-7 Project are in the process of assessing the field’s resource potential. For the Myanmar MD-7 Project, PTTEP is also in the process of seeking a joint partner to manage the risk of the project.

            The Myanmar MOGE 3 is in the preparation process for 2D and 3 D seismic survey which is scheduled in the fourth quarter of this year.

Australasia:

            The Montara Field in Australia was able to produce crude oil according to the production plan.

The American Continent:

            The Mariana Oil Sands Project in Canada submitted the development proposal for Thornbury Phase 1 to the government of Alberta in May 2015. However, the project is re-assessing the investment strategy going forward to reduce costs and mitigate development risks in response to the low oil price environment.

            The Barreirinhas AP1 Project in Brazil completed 3D seismic activities and is in the process of assessing the petroleum potential.          

Africa and the Middle East

            The Algeria 433a and 416b Project started up its first production in late 2015 and continues to maintain production volume as planned.

            The Oman 44 Project is in the divestment process of PTTEP Oman Company Limited (PTTEP OM), which is a subsidiary of PTTEP and holds 100% stake in the project. Whilst, PTTEP continues to explore for new investment opportunities in Oman. In this respect, PTTEP has signed Memorandum of Understanding (MoU) with Oman Oil Company Exploration and Production LLC (OOCEP), a subsidiary of Oman Oil Company, the national oil company of Oman, seeking co-investment opportunities in areas of mutual interest.

            The Algeria Hassi Bir Rekaiz Project is in the preparation of the project development plan to submit to the Algerian government.

            The Mozambique Rovuma Offshore Area 1 Project is currently in the process of finalizing key regulatory and commercial agreements with the government of Mozambique, securing long-term LNG sales agreements and progressing the project finance.