PTTEP Reports 2006 Results

Mr. Maroot Mrigadat, President of PTT Exploration and Production Public Company Limited or PTTEP revealed that PTTEP posted a profit of 28,047 million baht (unaudited) or 8.55 baht per share in 2006, an increase of 4,312 million baht or 18% from the profit of 23,735 million baht posted in 2005. The return on shareholder's equity was at 35.01%.

Giving the summary of the company's operating results for the year 2006, Mr. Maroot said that the total revenue was 91,723 million baht compared with 69,583 million baht posted a year earlier, representing an increase of 22,140 million baht or 32%. Attributing to the increase was the higher revenue from sales thanks to the product price of US $36.52 per barrel of oil equivalent (BOE) compared with US $29.37 BOE in 2005.

Sales volume also went up to 169,348 BOE compared with 153,531 BOE in 2005. Contributing to the increased sales were petroleum products from B8/32&9A Project, natural gas from Pailin, Bongkot, Yadana Projects and crude oil from S1 Project.

New Sales Target

PTTEP sets sales target for 2007 at 187,713 BOE, an increase of 9% from the sales volume of 2006. The company sets a budget of 74,512 million baht for petroleum exploration, development, and production in 34 projects. Of this, 48,407 million baht or 65% will be for investment in Thailand and 26,105 million baht or 35% will be used for investment in foreign countries.

The bulk of the local investment is used to develop projects in the Gulf of Thailand including Arthit Project where 16,100 million baht or 22% of the budget will be spent to build and install the production platform and four wellhead platforms as well as drilling 37 development wells so that production and delivery of natural gas at the rate of 330 million cubic feet of per day can start in the first quarter of 2008. North Arthit Project plans to use floating production storage and offloading or FPSO to produce gas and condensate at the rate of 120 million cubic feet per day starting in 2008.

Other projects that will receive additional investments include Bongkot where 6,000 million baht or 8% will be used to install three more wellhead platforms and to drill 16 development wells with the aims to maintain sales volume which is targeted at 595 million cubic feet per day of natural gas. On shore S1 Project will spend 7,800 million baht or 11% of the budget to drill 45 development wells and 4 exploration wells. PTTEP will spend 5,800 million baht or 8% at B8/32&9A to build 6 wellhead platforms, drill 84 development wells and 4 exploration wells with the aim to achieve sales volume of 54,141 barrels per day of crude oil. A sum of 3,600 million baht or 5% will be used to build 4 wellhead platforms and to drill 39 development wells at Pailin Project with the aim to attain sales of 405 million cubic feet per day of natural gas.

In foreign countries, PTTEP is planning to start production of natural gas at B-17 Project in the Thai-Malaysia Joint Development Area in the latter half of 2009. Initially, it will produce 270 million standard cubic feet of natural gas per day (mmscfd) and will later increase the volume to 470 mmscfd. To achieve these goals, the company will spend 9,100 million baht or 12% to drill 3 exploration wells and 4 appraisal wells this year. In other countries, the investment will be 4,760 million baht or 6% in the Union of Myanmar, 4,000 million baht or about 5% in Vietnam, and 3,400 million baht or almost 5% in Algeria.

The rest of PTTEP projects receive 10,000 million baht investment or about 13% of the total investment budget.

More gas found at Bongkot

In the attempt to maintain the production volume at Bongkot, PTTEP drilled 3 more exploration wells in October, namely: Ton Chan-1X, Ton Chan-2X and Ton Rang-2X. PTTEP found natural gas in all three wells at the thickness of 143 meters, 44 meters and 72 meters respectively. This will help prolong the life of the project. In 2007, PTTEP plans to drill 16 development wells and 6 exploration wells, and will install 3 wellhead platforms here.

Bongkot which PTTEP is the operator with 44.4445% interest currently produces 620 million standard cubic feet per day of natural gas and 17,688 barrels per day of condensate.

Progress at Arthit

Phase 1 construction work is progressing well at Arthit Project where 6 wellhead platforms, 5 gas pipelines and one condensate pipeline are now in place. The supporting jacket of the central processing platform and the accommodation platform as well as the flare tripod have been installed. The central processing platform itself is 69% complete. At 16,800 tons, it is the biggest and heaviest platform ever built in Southeast Asia. It uses foundation fieldbus system which is the most modern instrumentation and control system available. PTTEP plans to install the central processing platform in late 2007 with float-over installation method which will help reduce cost and time considerably. It will be the first time that the method is used in the Gulf of Thailand.

PTTEP has drilled 53 production wells and found high quality natural gas as expected. The company will drill 37 more wells before the end of the third quarter of 2007, bringing the total number of wells to 90 to meet the target set under the phase 1 development plan.

Apart from using the most modern technology to reduce production costs in the long run, Arthit Project is also adopting the method of multi-skill operations by training workers to have the skills of essential departments on offshore production platform. It is a way of developing the skills of PTTEP personnel.