• Recurring net profit at USD 116 million increasing from the previous quarter as unit cost reduced by more than 10%
  • Average sales volume at 329,858 BOED in line with the target to maintain production level
  • Strong financial position with cash on hand of USD 3.7 billion

Somporn Vongvuthipornchai, President and Chief Executive Officer of PTT Exploration and Production Public Company Limited (PTTEP) revealed that PTTEP and its subsidiaries booked recurring net profit of USD 116 million in the first quarter of this year, increasing by 103 million from the fourth quarter of 2015. The increase was driven by unit cost, which has trailed lower by over 10% in this quarter due partly to improved cost management. In addition, the company recorded gains from non-recurring items of USD 41 million primarily as a result of tax savings caused by Baht appreciation against the US dollar. Consequently the company reported unreviewed consolidated net profit of USD 157 million and maintains the strong financial position with operating cash flow of USD 818 million and cash on hand of USD 3.7 billion.

In the first quarter of 2015, the company's average sales volume stood at 329,858 barrels of oil equivalent per day (BOED), on track to achieve the target to maintain stable volume in 2016. The average sales price, however, fell to USD 35.08 per barrel of oil equivalent (BOE) from USD 39.18 per BOE in the fourth quarter of last year in correlation with declining global crude oil prices. The impact of lower sales price was well offset by improved cost performance with unit cost for the quarter reduced to USD 28.50 per BOE in comparison to 35.18 USD/BOE in the fourth quarter of 2015. Besides better cost management and improved operational efficiency achieved through the SAVE to be SAFE program, the unit cost, which has come down substantially, was also a reflection of generally lower operational and maintenance activities in the first quarter. This unit cost may therefore become higher in the later quarters as more maintenance and investment activities take place.

Somporn said 'As low crude oil prices directly impact pricing of our liquid products and cause the decline in our natural gas prices which we expect to see throughout the year, the company has devised the strategy under the principles of RESET REFOCUS RENEW to cope with this ever challenging situation.'

Details of the RESET REFOCUS RENEW strategy are as the followings,
RESET the cost structure to maintain competitiveness in the industry with an emphasis on building and instilling cost-conscious DNA in every employee as well as optimizing work processes to build excellence in cost management and become competitive with the leading companies in the industry while keeping safety at utmost importance
REFOCUS investment plan towards areas of high expertise with the primary areas of focus in Thailand and Southeast Asia as well as accelerate the development of high potential overseas projects, such as the Mozambique LNG, to maximize value creation.
RENEW long-term strategy for sustainable growth including creating synergy with PTT in LNG business to meet the country's growing energy demand in the future and investigating investment opportunities in new areas with low cost structure such as alternative energy

'We are confident that our strategy will enhance our capability and competitiveness to grow sustainably despite the pressure of currently low crude prices' Somporn added.

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.com
 Rudklao Suwankiri Tel. +66 (0) 2537 5410 E-mail: rudklaos@pttep.com

2015 PTTEP Operation Update

PTTEP currently invests in 38 projects in 11 countries. The progress of key project highlights is as follows;

Thailand:

Most projects are in the producing phase such as the Bongkot Project, the Arthit Project, the S1 Project and the Contract 4 Project. During the quarter, production operations were carried out continuously to maintain the production plateau.

Southeast Asia :

Zawtika Project has completed the construction of four wellhead platforms and is in the process of preparing production wells for Phase 1B. Myanmar M3 Project is currently assessing the prospects for commerciality and the resource potential in the remaining area. Myanmar PSC G & EP2 Projecthas got the approval from the government of Myanmar to extend the exploration period to conduct geological studies and assess petroleum potential. Myanmar MD-7 and MD-8 Project has been granted the extension period from the government of Myanmar. The project is conducting 3D seismic survey. Myanmar MOGE 3 Project is preparing for 2D and 3D seismic survey.

Australasia:

Montara fieldinPTTEP Australasia Projectmaintains production level at 18,146 barrels per day as planned.

America Continent:

Mariana Oil Sands project in Canadais re-assessing the investment strategy going forward to reduce costs and mitigate development risks in response to the low oil price environment. Barreirinhas AP 1 Projectis conducting 3D seismic. Brazil BM-ES-23 Project in Brazil is currently in the process of extending the exploration period.

Africa & Middle East:

Algeria 433a & 416b Project started crude oil sales in the fourth quarter of 2015 and is currently producing at the rate of 15,165 barrels per day. Algeria Hassi Bir Rekaiz Project has completed the drilling campaign of six appraisal well as planned and is on the process of drilling one last appraisal well of the campaign. Mozambique Rovuma Offshore Area 1 Project is currently in the process of negotiation for project finance, as well as progress in other areas of development plan, such as securing long-term LNG sales agreements.

PTT Exploration & Production pcl issued this content on 28 April 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 29 April 2016 09:36:40 UTC

Original Document: http://www.pttep.com/en/News-n-Media/Media Corner/Press Releases/Q1operatingresult.aspx