PTTEP Sees a 24% Revenue Increase in 2nd Quarter

PTT Exploration and Production Public Company Limited and its subsidiaries posted total revenues for the second quarter 2004 at 11,609 million baht, an increase of 2,276 million baht or 24% when compared with 9,333 million baht in the same quarter of last year. The increase resulted mainly from sales revenue which rose by 2,670 million baht or 32% due to higher sales volume.

Mr. Maroot Mrigadat, President of PTT Exploration and Production Company Limited (PTTEP) attributed the increase in the total revenues to the sales volume of crude oil from S1 Project which PTTEP acquired from Thai Shell Exploration and Production Co. Ltd. (Thai Shell) early this year, and the higher sales volume of gas and condensate from Bongkot Project which helped push the total sales to 133,101 barrels of oil equivalent per day (BOED) compared with the sales of 108,380 BOED in the same quarter of last year. Another factor was the product price which went up on average to US$ 22.86 per barrel of oil equivalent from US$ 20.13 per barrel of oil equivalent in the same period of last year.

PTTEP's net profit for the second quarter of this year was 3,277 million baht, a decrease of 273 million baht compared with 3,550 million baht in the same quarter of last year due mainly to the weakness of the Thai baht against the US dollar which fell to 41.03 baht at June 30, 2004 compared with 39.55 baht at March 31, 2004.

"Although the Thai baht depreciation had a negative impact on the net profit, the value of PTTEP's reserves which were not booked in the account was assessed in US dollar rose." said Mr. Maroot

Higher costs of depletion, depreciation and amortization, as well as royalties were the culprits in the increased expenses of PTTEP. Production cost also went up partly because of the S1 project which PTTEP is now the Operator with 100% interest. As a result, the Company's expenses rose to 5,347 million baht, an increase of 2,027 million baht from the expenses of 3,320 million baht incurred during the same quarter last year.

As of June 30, 2004, the Company's total consolidated assets stood at 97,417 million baht, an increase of 4,841 million baht from December 31, 2003. Total liabilities were 49,423 million baht, an increase of 2,521 million baht due mainly to provision for decommissioning costs of Thai Shell.

As for future plan, Mr. Maroot said that "In early August, PTTEP signed Production Sharing Contract (PSC) to invest in offshore petroleum exploration blocks M-3 and M-4 in Union of Myanmar as the Operator with 100% interest. In the first 4 years, PTTEP will conduct geological and geophysical, seismic surveys and the drilling of at least 1 exploration well. If the result is satisfactory, PTTEP can extend the exploration period for another 2 years. The six-year exploration activities would cost about 23 million dollars. This investment is in line with the Company's strategy to enhance overseas business with the aim to strengthen the long-term petroleum reserves of the country."

"For domestic projects, an additional drilling program will be conducted at S1 project to boost its production. The Company also plans to test the oil production in B6/27 project by resumption the Nang Nuan oil field in the Gulf of Thailand in the near future." said Mr. Maroot.