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PTTEP reports unreviewed net profit slump of 44% in Q1

PTT Exploration and Production reported a drop of 44 per cent in its unreviewed net profit for the first quarter to US$380 million (Bt12.44 billion), with a foreign-exchange loss and higher depreciation and production costs the main contributing factors.

"However, the company still has a healthy cash flow," president and chief executive officer Tevin Vongvanich said in PTTEP's filing to the Stock Exchange of Thailand.

The decrease in net profit comprised non-recurring items of $106 million from the impact of foreign exchange and a recurring $194 million from depreciation as well as the PTTEP Australasia Project's excess drilling costs for the H5 development well.

PTTEP reported $1.83 billion in consolidated revenue for the first quarter, down 4 per cent on the same period last year, owing to a $41-million reduction in foreign-exchange-gain items.

A decrease in average petroleum sales prices, which dropped to $64.92 from $67.03 per barrel of oil equivalent in the first quarter last year, resulted in a $13-million sales reduction.

Average sales volume climbed to 298,621 barrels of oil equivalent per day from 291,476 year on year.

Apart from projects in Thailand, elsewhere in Southeast Asia, Australia, Africa and Middle East, PTTEP restructured its shareholding in the Canadian oil-sands project in the first quarter.

The company also entered a 25-per-cent interest in a petroleum exploration project in Brazil as well as acquiring stakes in subsidiaries of Hess Corporation in Thailand.

"These transactions are in line with the company's strategy that seeks any assets that involve operation in a bid to boost sales, production, and reserves immediately," Tevin said.

World oil prices are still fluctuating this quarter. The unrest in Ukraine is likely to be a key negative factor, resulting in oil prices fluctuating for the remainder of the year.

The average price of crude oil in Dubai was $104.14 per barrel in the first quarter.

"A mix of several negative factors, including uncertainty of global economies and currency fluctuation, might affect energy costs," Tevin said.

"The company has closely monitored the movement of both global economies and world oil prices so that it can adjust its operation and investment plans to be in line with its strategy plan."

He said the company had reviewed its business plan in securing energy and production development more efficiently in response to higher demand for energy both locally and globally. Moreover, it would also speed up feasibility studies in new investment projects related to energy continuously.

"The company aims to reduce its costs for this year by $15 million. Of that, about $7 billion can be reduced in the first quarter," Tevin said.


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