PTT Exploration and Production PCL : PTTEP announces the second quarter operating results

• Recorded unreviewed consolidated net profit of USD 560 million, an increase of 55% from the same quarter of 2013
• Interim dividend payment for the first half-year operations at 3 baht per share
• Increased average petroleum sales volume to 315,810 barrels of oil equivalent per day; 78% from the operations in Thailand, 14% from South East Asia, 6% from Australasia and 2% from Africa and the Middle East
• Successful acquisition of Hess Corporation in Thailand and investment of 25% stake in Barreirinhas AP 1 Project in Brazil
• Key achievements include Best CEO and Best CFO, Best Public Company 2014 Resources Industry Award, ISO 14001 certification for PTTEP AA and the acceptance to join the Private Sector Collective Action Coalition Against Corruption

PTT Exploration and Production Public Company Limited or PTTEP represented by     Mr. Tevin Vongvanich, President and CEO revealed the operating results of the second quarter of 2014 as the details below;

Recorded unreviewed consolidated net profit of USD 560 million, an increase of 55% year-on-year

PTTEP and its subsidiaries recorded unreviewed consolidated net profit of USD 560 million (equivalent to 18,187 million baht) in the second quarter of 2014, an increase of USD 198 million or 55% in comparison with USD 362 million (equivalent to 10,686 million baht) posted in the second quarter of 2013. The consolidated net profit comprises of recurring net profit of USD 537 million, and non-recurring net profit of USD 23 million.

In the 2nd quarter, the total revenue of PTTEP and its subsidiaries was reported at USD 2,107 million (equivalent to 68,352 million baht) compared to the same period of last year at USD 1,851 million (equivalent to 55,326 million baht).  An increase of USD 256 million or 14% was mainly resulted from the higher average petroleum sales volume to 315,810 barrels of oil equivalent per day (BOED) compared to the second quarter of 2013. The growth of average sales volume mostly generated from Montara field, Contract 4, Sinphuhorm and Zawtika Projects, plus an increase in average petroleum sales price which rose to USD 67.70 per barrel of oil equivalent (BOE) from USD 65.16 BOE in the second quarter of last year.

"This year, we expect to increase the average sales volume to 320,000 BOED or no less than 10% growth from last year. Around 75% of which will come from the operations in Thailand and 25% from the overseas assets. From now on, the contribution from overseas operations will increase progressively" Tevin added.

Interim dividend payment for the first six months operation at 3 baht per share

The Board of Directors approved the payment of an Interim Dividend from consolidated performance of PTTEP and its subsidiaries for the first half of 2014 (January 1, 2014 to June 30, 2014) to the shareholders at 3 baht per share. The date for closing of the company's share registration for the right to receive the dividend is scheduled on August 8,2014, followed by a dividend payment on August 22, 2014.

The progress of PTTEP's operations in the second quarter of 2014

PTTEP currently invests in 43 projects in 11 countries as follows;

Projects in Thailand:    There are 18 projects which contributed to the average petroleum sales volume of 245,000 BOED, accounting for 78% of the company's total sales volume. The increased sales volume was mainly attributed to the acquisition in the subsidiaries of Hess Corporation in Thailand in April. As a result, PTTEP has increased its shareholding in Contract 4 Project located in the Gulf of Thailand by 15% and Sinphuhorm Project located in the North East of the country by 35%.

For exploration project, B6/27 Project completed the drilling of NKW-N01 exploration well with no hydrocarbon discovered result. Currently, PTTEP is analyzing the result of NKW-N01 exploration well and also studying petroleum geology.

Projects in South East Asia:    PTTEP invests in 15 projects in Myanmar, Vietnam and Indonesia with the total average sales volume of 45,000 BOED, representing for 14% of the company's total sales volume.  Average sales volume in the second quarter rose from the first quarter of this year mainly due to the full quarter of commercial production of Yadana and Yetagun Projects in Myanmar. In addition, Zawtika Project which started delivering gas to Myanmar Oil and Gas Enterprise (MOGE) for domestic consumption in the first quarter of 2014, increased the average sales volume to 55 million cubic feet per day (MMSCFD) in the second quarter. Onshore pipeline and facilities for export gas to Thailand are under construction and expected to start delivering gas of 240 MMSCFD in the third quarter of this year. The company is preparing the construction of four wellhead platforms and drilling campaign for 10 appraisal wells expected to commence during 2014-2015, aiming at increasing petroleum reserves and maintain the long-term production.

Other projects are Myanmar M3 which is under the preparation of six appraisal wells, and Myanmar PSC G & EP 2 which is in the process of geological study and preparation for four exploration wells.

Projects in Australasia: PTTEP operates PTTEP Australasia in Australia, which comprises of 16 petroleum blocks.

Montara field is under the production phase with the average sales volume of 20,000 BOED, accounting for 6% of PTTEP's total sales volume. The sales volume increased from 12,000 BOED recorded in the first quarter of 2014 thanks mainly to the increased production volume to 25,000 barrels per day.

AC/P4 block has just completed drilling of Dillon South-1 exploration well with no hydrocarbon discovery, resulting in triggering a write-off in the second quarter of 2014. In regard to the Cash Maple field, the company has commenced drilling of Maple-East well since late June.

Projects in North and South America: PTTEP has two projects; one in Canada and another in Brazil, which are under the exploration phase. For the project in Canada, PTTEP completed the asset swap under the Partnership Unit Redemption Agreement (PURA) with Statoil Canada Limited (SCL) to restructure the ownership of the five areas of the Canada Oil Sands KKD Project.  As a result, PTTEP Canada Limited (PTTEPCA) now owns and operates 100% of Thornbury, Hangingstone and South Leismer areas. PTTEPCA also received from SCL the sum of USD 419 million. Later, the Canada Oil Sands KKD Project has been renamed to Marina Oil Sands Project.

In April this year, PTTEP announced its investment in Barreirinhas  AP 1 Project which comprises of blocks BAR-M-215, BAR-M-217, BAR-M-252 and BAR-M-254 in Brazil. The agreement is subject to the approval of Brazil's National Agency of Petroleum, Natural Gas and Biofuels (the ANP). PTTEP's subsidiary will hold a 25% stake in the project.

Projects in Africa and the Middle East:PTTEP invests in seven projects in Oman, Algeria, Mozambique and Kenya.

The Oman 44 produced at the average sales volume of 6,000 BOED, accounting for 2% of total sales volume.

Projects under development is Algeria 433a & 416b which is the construction of production and process facilities as well as pipeline infrastructure. The project is anticipated to commence the production within 2014 with production rate of 20,000 barrels per day. 

Project under exploration phase is Mozambique Rovuma Offshore Area 1. The project is scheduled to start drilling and appraisal campaign of eight wells for further appraisal.  As of the second quarter this year, PTTEP was successful in drilling Tubarao Tigre-1 well with natural gas discovery. The company is continuously developing Front-End Engineering Design (FEED) of the Liquefied Natural Gas (LNG) Project. It is expected to start producing and delivering LNG in late 2018 or 2019. Another project is Kenya L10A which completed drilling campaign of Sunbird-1 well with no commercial discovery. PTTEP expects to write off of this well in the third quarter of 2014. However, the findings will be valuable for future geological studies.

Key achievements in the second quarter 

With the good corporate governance and business ethics, in this quarter, PTTEP received recognition awards and leading standards as the below details;

• Best CEO and best CFO from the "IAA Awards for Listed Companies 2013" hosted by the Investment Analysts Association (IAA). IAA considered the awards from the management excellence consistency, good corporate governance and business ethics and industry knowledge
• Best Public Company 2014: Resources Industry Award from Money & Banking magazine. The award has been presented to the listed companies in the Stock Exchange of Thailand with excellent performance and efficient management. The company has been recognized with the award for seven consecutive year.
• Certification to ISO 14001 Environmental Management System achieved by PTTEP Australasia (PTTEP AA), PTTEP's subsidiary in Australia. This certification specifically relates to the environmental management at Montara, Darwin and the Perth office. The achievement is a remarkable milestone for ISO 14001 certifications in international operating assets. The plan is in place to further achieve such certifications in other international assets in the near future.
• The acceptance from the Thai Institute of Directors to join the Private Sector Collective Action Coalition Against Corruption, which confirms the company's intention to run the business with good corporate governance and business ethics as well as to fight against corruption in any form.

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