News & Media

• Core performances met target as a result of successful management of production at key projects and unit cost control.
• Revised the development plan of Mariana Oil Sands Project in Canada, resulting in impairment loss recognition with cash on hand unaffected.
• Reorganization undertaken to accommodate future business challenges.

Somporn Vongvuthipornchai, Chief Executive Officer of PTT Exploration and Production Public Company Limited (PTTEP) reported that PTTEP’s first nine-month core performances were delivered as planned. Through managing production volume and maintaining low unit cost amid rising global oil prices, the company’s recurring net profit stood at USD 596 million (equivalent to 20,431 million baht). However, revision was made to the development plan of Mariana Oil Sands Project in Canada to reflect the current industry situation, resulting in the company recognizing an impairment loss on the asset. The impairment loss recognition was carried out in accordance with accounting standards but does not impact the company’s cash on hand.

The first nine months this year saw the company generating sales revenue of USD 3,079 million (equivalent to 105,503 million baht), a slight decrease from the same period last year due to average sales volume reduced by 8% to 294,539 barrels of oil equivalent per day (BOED). The reduction was primarily from longer maintenance shutdown activities, lower production from the Malaysia-Thailand Joint Development Area (MTJDA) project, lower gas nomination from buyer in the first half of the year and decreased sales volume following the sale of PTTEP Oman Company Limited in the previous year. However, average sales price increased from USD 36.00 per barrels of oil equivalent (BOE) to USD 38.29 BOE in parallel with higher global oil price. PTTEP also minimized these impacts by increasing production of condensate and crude from other projects in the Gulf of Thailand and Australia as well as decreasing unit cost by 5% from the first nine months last year to USD 28.36 per BOE. As a result, PTTEP recorded USD 305 million net profit (equivalent to 11,138 million baht) which derived from USD 596 million recurring net profit (equivalent to 20,431 million baht) and USD 291 million loss from non-recurring items (equivalent to 9,293 million baht). The loss from non-recurring items included USD 558 million impairment loss recognition of Mariana Oil Sands Project (equivalent to 18,505 million baht) offset with tax benefits related to Baht appreciation.

The third quarter performance recorded USD 218 million recurring net profit (equivalent to 7,278 million baht) comparing to USD 167 million (equivalent to 5,716 million baht) in last quarter. The increase was driven by improving sales volume of 298,139 BOED, up from 281,435 BOED, lowered unit cost of USD 28.50 per BOE from USD 29.08 per BOE and slight rise in average sales price. However, the company posted USD 264 million net loss (equivalent to 8,682 million baht) in this quarter mainly from USD 482 million loss from non-recurring items (equivalent to 15,960 million baht) due to an impairment loss recognition of Mariana Oil Sands Project.

Nevertheless, PTTEP’s financial position remains healthy with 71% EBITDA margin and total assets as of 30 September 2017 amounting to USD 18,616 million (equivalent to 621,204 million baht), of which USD 4,055 million was cash on hand and short-term investments (equivalent to 135,315 million baht). Total shareholders’ equity was at USD 11,229 million (equivalent to 374,705 million baht) and interest-bearing debt at USD 2,889 million (equivalent to 96,415 million baht).

“Despite positive signals in global oil prices, PTTEP continues to closely monitor situations affecting oil price so that necessary adjustment can be made to our investment plan to reflect current industry situation and to preserve company’s profit,” said Somporn.

The core performances for the first nine months remain strong with high liquidity of approximately four billion dollars cash on hand available to support investment decisions on our key projects especially the Mozambique Rovuma Offshore Area 1, the Algeria Hassi Bir Rekaiz, and the Vietnam Block B & 48/95 and Block 52/97. Letter of Agreement on the Wellhead Gas Price and Transportation Tariff for the two Vietnam projects have been signed in September 2017, which will accelerate the Final Investment Decision next year.

“PTTEP continues to look for investment opportunities in both upstream business and LNG value chain as well as accelerating the drilling and exploration activities to increase petroleum reserves and production volume in the short and long term. Regarding the expiring concessions in the Gulf of Thailand, we are ready to join the bidding and are confident of our competitive capabilities,” said Somporn.

Reorganization to accommodate future business challenges
PTTEP board of committees agreed upon reorganization which included an establishment of a Business and Organization Transformation Group and appointed Mr. Somporn Vongvuthipornchai as Chief Executive Officer and Mr. Phongsthorn Thavisin as President for Exploration and Production, effective November 1, 2017.

“The reorganization is undertaken not only to enhance effectiveness in the company management and operation but also responding to changing industry environment for the company’s sustainable growth,” Somporn said.

For more information, please contact Media Management Section
Tongchit Pongorapin   Tel. +66 (0) 2537 4587          
Korbua Dumrongmonkolkul    Tel. +66 (0) 2537 7142
E-mail: PTTEPCorpCom@pttep.com