- Delivered target sales volume of 319,521 BOED and successfully sustained its production level
- Performed with resilience amidst the oil price crisis through strong financial discipline
- Proposed dividend payment at 3.25 per share
PTT Exploration and Production Public Company Limited (PTTEP) announces robust 2016 operating results by turning into profit of USD 372 million despite volatility in global oil prices where the price reached its bottom at USD 23 per barrel during the year. This performance was achieved through professionalism across disciplines, from operations, finance to cost and efficiency management. The company’s continued efforts to reset its cost base as a mean to cope with the lasting situation around price volatility were pursued without any compromise to safety standard and its responsibility to environment and society. As at the end of 2016, the company has cash on hand of USD 4 billion, ready to fund its investment plans and invest in new business opportunities for growth. Besides, the Company also proposed dividend payment at 3.25 per share for the 2016 operations.
Mr. Somporn Vongvuthipornchai, President and Chief Executive Officer, said the Company and its subsidiaries reported unaudited consolidated net profit of 2016 at USD 372 million (equivalent to BHT 12,860 million), compared to net loss of USD 854 million (equivalent to BHT 31,590 million) in the previous year. In 2015, the company recorded impairment loss on assets of USD 1,385 million primarily as a result of the oil price slump; while this year there is an impairment charge of USD 47 million following revision to production plans to reflect lower resource potential of the selected assets.
PTTEP’s sales revenue in 2016 totaled USD 4,339 million (equivalent to BHT 152,745 million), a decrease from USD 5,614 million in 2015 primarily caused by lower average selling price which fell to USD 35.91 per barrel of oil equivalent (BOE) from USD 45.29 per BOE in the previous year. Meanwhile, the average petroleum sales volume slightly dropped from 322,167 barrels of oil equivalent per day (BOED) in 2015 to 319,521 BOED in 2016 partly due to the divestment in the Oman 44 Project in the second half of 2016. On the cost side, the company was successful at capturing cost reductions through the SPEND SMART to Business Sustainability campaign. Together with the initiatives in bond buyback and capital restructuring, 2016 unit cost was brought down to USD 30.46 per BOE, a 20% reduction from 2015.
At the end of 2016, the Company’s total asset values were at USD 18,891 million (equivalent to BHT 676,890 million) with cash on hand of USD 4,022 million (equivalent to BHT 144,096 million), total liabilities of USD 7,505 million (equivalent to BHT 268,906 million) which included interest-bearing debt of USD 2,832 million and total equity of USD 11,386 million (equivalent to 407,984 million).
Referring to the aforementioned operating performance, the Company’s Board of Directors proposed the payment of dividend for the 2016 operation at THB 3.25 per share. The Company paid the interim dividend for the first six months operating results at THB 0.75 per share, while the remaining dividend will be paid at THB 2.50 per share. The closing date of the Company’s registration for the right to receive the dividend is scheduled on February 10, 2017, followed by a dividend payment on April 10, 2017.
For business plan in 2017, Mr. Somporn said that, the company will continue to focus on maintaining the production level especially from its core operations in Thailand, with average sales volume for the year targeted at 312,000 BOED and unit cost maintained in the USD 30-31 per BOE range. Whilst, PTTEP views that crude oil prices in the first half of 2017 will likely be in the USD 50-60 per barrel range, supported by the agreement on production cut by the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC countries. Volatility is however expected to continue especially in the latter half of 2017 with key catalysts include next phase of OPEC movements, US energy policy under the new president and other political factors. Strategy to enhance its reserves and grow its production would be driven by sanctioning pre-development projects in the pipeline including Ubon field under Contract 4, the Mozambique Rovuma Offshore Area 1 Project and the Algeria Hassi Bir Rekaiz Project as well as progressing its exploration projects and M&A in Thailand and Southeast Asia.
Mr. Somporn also commented on the energy outlook that “Although some may speculate a long-term decline in fossil fuel demand, it will remain a major source of global energy supply with natural gas, as a clean and transitional energy to a lower carbon future, playing an increasingly important role. Considering PTTEP’s portfolio with natural gas accounting for over 60% of our production and our current strategy to expand jointly with PTT in the LNG business, I am confident that our business direction corresponds well with global energy trend and Thailand’s energy supply plan.”
“With our expertise and experience in the exploration and production business and unwavering dedication of our employees, we have come a great distance in resetting our cost base and improving our operational efficiency. This, together with strict financial discipline and good corporate governance, has helped the company to strive in the face of tremendous oil price challenge. And as the national oil and gas exploration and production company, we are well-equipped and committed to providing reliable energy supply for the security of Thailand.” added Mr. Somporn.