PTTEP Posts 3Q Financial and Operating Results

PTTEP had a net profit of Baht 5,259 million for the 3rd quarter of this year. While the Montara incident expenditure was recorded, it was tax deductible and the compensation from the insurer is expected to be paid starting from next quarter. Also in the third quarter, the company made due preparations to deliver first natural gas from MTJDA-B17 by the end of the year.

Mr. Anon Sirisaengtaksin, the CEO of PTT Exploration and Production Public Company Limited or PTTEP, touching on the operating result for the 3rd quarter of 2009, said that the company and its subsidiaries posted a net profit of Baht 5,259 million, a decrease of Baht 7,725 million or 59% compared to the profit of Baht 12,984 million posted in the same period of last year. The returns on shareholders’ equity for this quarter were 15%.

For this quarter, the total revenue was Baht 30,769 million, a decrease of Baht 11,665 million or 27% compared to the revenue of 42,434 million posted in the same period of last year. The sales value of petroleum decreased by Baht 11,109 million, resulting from the lower average petroleum sales price in this quarter, which fell from US $54.52 per barrel of oil equivalent (BOE) in the same quarter of last year to US $39.90 per BOE due to lower world market prices. Other factors contributing to the revenue decrease were the average sales exchange rate for this quarter which rose to Baht 34.31 per USD from the same period of last year’s Baht 33.65 per USD because of the weaker Baht, and the sales volume in this quarter which fell to 234,601 barrels of oil equivalent per day (BOED) compared to the same period last year of 240,839 BOED. This was due to Arthit Project's maintenance shutdown and decrease of Pailin Project's nomination. However, there were increases in natural gas sales volume from the Arthit North Project and natural gas and crude oil sales volume from the Vietnam 9-2 and B8/32&9A projects in this quarter.

PTTEP and its subsidiaries incurred expenses amounting to Baht 22,420 million, an increase of Baht 3,787 million against Baht 18,633 million for the same period of last year. This increase was the net effect of the loss from crude oil and gas leak incident at Montara Field of the PTTEP Australasia Project. The expenditures mainly included costs for drilling a relief well, cleaning up, and costs in relation to other project activities which have been delayed. According to the accounting standard -- Provisions, Contingent Liabilities and Contingent Assets, the company is required to determine and recognize all expenditure which is related to the incident in the company’s financial statement immediately in the period when it occurred. PTTEP, therefore, has recorded the Montara’ incident expenditure of 5,174 million baht in the financial statement of the third quarter of 2009. However, it is tax deductible as taxable expenditure. PTTEP also has insurance policy to cover this incident. The Company is now on process of claiming with the insurer. It is expected to receive compensation from the insurer starting from next quarter.

One of the key progresses in the third quarter was the MTJDA B-17 Project, which PTTEP hold 50% interest, where major facilities have been successfully installed, including the central processing platform, living quarter platform, flare platform, wellhead platforms, bridges, intra-field pipelines, and floating storage and offloading unit (FSO). In addition, the production testing and commissioning work has been performed on wellhead platforms and the central processing platform as planned. Production start up from Muda and Jenka fields is planned for the end of 2009, with initial rate of 135 million standard cubic feet per day of natural gas. It represents another major achievement in expanding PTTEP’s portfolio in the region and securing long-term gas supply for the country.