PTTEP announces improved operating results for the third quarter of 2020 compared to the previous quarter with the net profit of USD 230 million (equivalent to THB 7,202 million) primarily due to higher sales volume and higher average selling price.
Mr. Phongsthorn Thavisin, Chief Executive Officer of PTT Exploration and Production Public Company Limited (PTTEP), disclosed that the company generated a total revenue of USD 1,305 million (equivalent to THB 40,887 million) in the third quarter of 2020, increasing by 19% compared to USD 1,095 million (equivalent to THB 34,954 million) in the second quarter. The key factor was from improvement in sales volume to 344,317 barrels of oil equivalent per day (BOED), a 5% growth from 327,004 BOED in the previous quarter. This was supported by higher gas nomination from projects located in the Gulf of Thailand, especially the Bongkot project and the Contract 4 project. Meanwhile, the average selling price in the third quarter adjusted upward by 11% to USD 38.77 per barrel of oil equivalent (BOE) in comparison to USD 34.97 per BOE of the second quarter as the global crude oil price escalation.
With the aforementioned factors, PTTEP reported net profit of USD 230 million (equivalent to THB 7,202 million) in the third quarter, an increment of 72% from USD 134 million (equivalent to THB 4,323 million) in the previous quarter. The company managed to maintain the unit cost at USD 30 per BOE with Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) margin at 71%, aligned with the company’s target.
For the first nine months of 2020, PTTEP earned a total revenue of USD 4,082 million (equivalent to THB 128,369 million), a decrease of 11% from USD 4,572 million (equivalent to THB 143,115 million) in the same period last year. The net profit was booked at USD 639 million (equivalent to THB 20,137 million), a decrease of 46% from USD 1,185 million (equivalent to THB 37,182 million), caused by low average selling price in line with global crude oil price.
Mr. Phongsthorn said “The performance of the third quarter was better than the previous one. This was a result of rising demand for energy after several countries start to relax the enforcement of city lockdown measures to curb COVID-19 pandemic. Meanwhile, members of the Organization of the Petroleum Exporting Countries Plus (OPEC Plus) still adhere to its policy on petroleum production cut. Spot LNG price, in late September, has climbed above USD 5 per MMBTU, encouraging lower LNG import which we witnessed higher gas nomination from projects in the Gulf of Thailand. This is expected to potentially increase the sales volume in the last quarter of this year. However, PTTEP shall stay abreast of the situation in order to get prepared in terms of both proactive and reactive plans in correspondence to situations.”
Progress in Key Operations
Mr. Phongsthorn added that during the third quarter, PTTEP started drilling an appraisal well to assess petroleum potential of Block Sarawak SK410B, Malaysia after the exploration activities last year found PTTEP’s largest commercial discovery of natural gas, which was also recorded as the world’s 7th largest petroleum discovery in 2019. The result of the appraisal campaign will be obtained this year prior to making a final investment decision (FID) in 2022. In addition, PTTEP has acquired additional participating interests of 24.5% in the Algeria Hassi Bir Rekaiz project from CNOOC Limited, one of the joint venture partners. The investment value will be evaluated from CNOOC’s total spending during the development phase until the approval from the Algeria government, which is now in process. Once the transaction is completed, the company will have a total share of 49%. First oil production is expected to come on stream in 2021 with the start-up volume of 10,000-13,000 barrels per day (BPD), and will be ramped up to 50,000-60,000 BPD in 2025 as targeted.
For the progress of Block G1/61 (Erawan) and Block G2/61 (Bongkot) operational transitions, PTTEP has planned for drilling activities, construction of wellhead platforms, interfield pipelines, and relevant preparations to ensure gas production in pursuance of the Production Sharing Contract (PSC). Regarding Block G1/61, PTTEP remains in the negotiation process with the existing operator for the site access so as to install production platforms and submarine pipelines as planned.
PTTEP has estimated the average sales volume this year at 350,000 BOED, slightly decreasing from what has been targeted in the middle of the year.