PTTEP financial status remains solid

Dividend for second-half of 2015 paid at BHT 2 per share

  • Recurring net profit at USD 718 million in 2015 with operating cash flow of more than USD 2,800 million, adequate for investments to maintain production levels
  • Average sales volume of 322,167 BOED in 2015, achieving 3% growth as planned
  • Strong financial position with approximately USD 3,200 million cash on hand, well prepared to navigate through current oil price volatility

Somporn Vongvuthipornchai, President and Chief Executive Officer of PTT Exploration and Production Public Company Limited (PTTEP), said that the company's operating performance remains on track, having achieved sales volume growth as planned. Recurring net profit was recorded at USD 718 million; while operating cash flow totaled over USD 2,800 million. The outcomes of cost reduction initiatives and strict discipline to investment prioritization, whereby the company selectively invest in projects that can be justified economically under the currently low oil price environment, contributed greatly to this financial performance. We successfully reduced operating and capital expenditures by 30% and, as a result, brought down the unit cost by 11% from 2014 level. The company also used oil price hedging instruments to alleviate the impact of oil price volatility, which resulted in hedging gain of USD 120 million in 2015. Cash on hand is currently approximately USD 3,200 million providing enough liquidity to manage with oil price fluctuation and allow the consideration of merger and acquisition (M&A) which creates value and matches strategic plans.

Meanwhile, continuing volatility in global crude prices and the depreciation in Thai Baht against U.S. dollar in 2015 led the company to book impairment loss of USD 1,385 million as well as deferred tax liabilities and other tax expenses caused by differing currencies the company uses as the functional currency (USD) and in tax filing (Thai Baht). These items are booked per the accounting standard and mostly have no impact on the company's cash flow. Consequently, the company posted net loss of USD 854 million in 2015, against net profit of USD 677 million in 2014.

PTTEP in 2015 recorded consolidated revenue of USD 5,654 million in comparison with USD 7,834 million in 2014. The revenue decrease was due to the average sales price, which dropped in 2015 to USD 45.29 per barrel of oil equivalent (BOE), from USD 63.71 per BOE in 2014, following the continued fall in oil prices. This is despite sales volume increase, driven by full-year recognition of production from the Zawtika project and the production startup of the Bir Seba field, the Algeria 433a and 416b project in the fourth quarter of 2015.

In 2015, total expense before impairment charge was USD 4,642 million, lower than USD 5,087 million recorded in 2014. Following progresses the company has made on the SAVE to be SAFE cost reduction program, PTTEP was successful at reducing its capital and operating expenditures and driving down the unit cost from USD 43.45 per BOE in 2014 to USD 38.88 per BOE in 2015. Unit cost reduction, which is seen across most cost categories including operating expenses, general and administrative expenses, exploration expenses and finance costs, was achieved through improved work and cost efficiency. This includes reducing drilling days especially in the Gulf of Thailand operations, as a result of which well cost was brought down by more than 20%. Other cost reduction activities also include logistics optimization (i.e. reducing number of vessels), better inventory management, renegotiation of major equipment rental and service contracts and strengthen capital structure through debt repayment of USD 1,100 million. Despite the cost reductions, the upholding of safety and environmental standard excellence remains the utmost importance.

At the end of the of 2015, total asset values of the company was recorded at USD 19,642 million, of which USD 3,260 million is cash and cash equivalents, the company's equity at USD 11,328 million and total interest bearing debt at USD 3,005 million. Referring to the aforementioned 2015 operating performance and financial status, PTTEP's Board of Directors on January 28, 2016 approved the payment of a dividend for the 2015 operating results to the shareholders at THB 3 apiece. The company has already paid an interim dividend for the first six months operating performance at THB 1 per share, while the remaining dividend will be paid at BHT 2 per share. The closing date of the company's share registration for the right to receive the dividend is scheduled on February 12, 2016, followed by a dividend payment on April 11, 2016.

'2016 will be another challenging year for PTTEP and the exploration and production industry as a whole. We, however, strongly believe that we can create value added for the company and reasonable returns to all stakeholders from our professionalism with the continued focus on efficiency enhancement and cost reduction while realizing the value of balance between profits and cash flow,' said Somporn.

January 28, 2016. For more information, please contact Media Management Section

Tongchit Pongorapin Tel. +66 (0) 2537 4587 E-mail: tongchitp@pttep.com Nalin Viboonchart Tel. +66 (0) 2537 4834 E-mail: nalinv@pttep.comRudklao Suwankiri Tel. +66 (0) 2537 5410 E-mail: rudklaos@pttep.com
Wipawee Panayadee Tel.02 537 4000 Ext. 2531 E-mail: wipaweep@pttep.com

2015 PTTEP Operation Update

PTTEP currently invests in 39 projects in 11 countries as follows;

Thailand:

Most projects are in production phase, such as the Bongkot Project, the Arthit Project, the S1 Project and the Contract 4 Project, continue to maintain production plateau.

Southeast Asia :

Zawtika Project completed construction of one wellhead platform under the Zawtika Phase 1B. Vietnam 16-1 project started up the first crude oil production from H5 area. Myanmar M3 project exploratory wells drilling were completed as planned with four out of five wells drilled showed no commercial potential, resulted in the expenditure write-off. The project is currently assessing the field's resource potential and its prospects for commerciality.

Australasia:

Montara fieldinPTTEP Australasia projectmaintain production volume, while Cash Maple field continue the assessment of potential for commerciality.

America Continent:

Mariana Oil Sands project in Canadais under study to reduce cost and mitigate risks. Environmental Impact Assessment (EIA) of Barreirinhas AP 1 project in Brazil has been approved and exploration activities are expected to begin in the first quarter of 2016. Brazil BM-ES-23 project in Brazil has discovered petroleum from exploration well while non-commercial discoveries have been booked well write-off.

Africa & Middle East:

Algeria 433a & 416b project commenced production with capability of approximately 20,000 BPD and started crude oil sales in the fourth quarter of 2015. Algeria Hassi Bir Rekaiz project entered the third exploration phase with five completed exploration and appraisal wells drilling. Mozambique Rovuma Offshore Area 1 project successfully drilled six appraisal wells. The contractor selection for the onshore LNG Engineering Procurement and Construction Contract has been awarded while contractor selection for offshore facilities installation and preparing for project finance. The Decree Law and endorsement from Mozambique's government has been approved.

PTT Exploration & Production pcl issued this content on 28 January 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 28 January 2016 08:19:12 UTC

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