The rising demand for crude oil that can more easily produce transportation fuels when refined has some Australian and Malaysian producers boasting cargoes valued at close to $70 a barrel, a hefty premium to global benchmarks. (Reuters Photo/Todd Korol)
Thai PTTEP Turns a Q3 Profit, Sees Crude Prices Rising in Q4
BY :KHETTIYA JITTAPONG AND MANUNPHATTR DHANANANPHORN
OCTOBER 28, 2016
Bangkok. Thailand's largest oil and gas explorer, PTT Exploration and Production Pcl, posted on Thursday (27/10) a net profit in the third quarter versus a loss a year ago mainly due to an absence of an impairment loss and gains from oil hedging.
PTTEP, like energy firms elsewhere, has seen earnings flounder in the past two years after declines in global oil prices.
Net profit stood at $156 million for July-September, versus a loss of $1.28 billion a year earlier when it booked an impairment loss on assets of $1.39 billion.
That compared with the average 5.36 billion baht ($153 million) profit forecast by 11 analysts polled by Reuters.
Profit from normal operations was at $75 million, down 72 percent from a year earlier, while it booked a gain of $23 million gain from oil hedging and tax savings from the appreciation of the baht against the US dollar, it said in a statement.
PTTEP, the upstream exploration business of PTT Pcl , Thailand's top energy firm, expected crude prices to rise in the fourth quarter with benchmark Dubai oil prices to "fluctuate in range of $45-55 a barrel", it said.
Dubai crude prices averaged $43.17 a barrel in the third quarter, it said.
The company's third-quarter revenue fell 24 percent on year to $1.11 billion, with average sales volume down 3 percent to 311,386 barrel of oil equivalent per day (BOED), mainly due to a decline in output from the Zawtika field in Myanmar.
Average selling prices fell 19 percent from a year earlier to $36.32 per barrel, PTTEP said, adding it has set a 2016 sales volume target of 322,000 BOED, similar to last year's.
The company has focused on cost cutting and its cost per unit has dropped 23 percent in the first nine months to $29.98 per barrel, better than its cost-reduction target of 10 percent, CEO Somporn Vongvuthipornchai said in the statement.
PTTEP has cash on hand of $3.72 billion, enabling it to be ready for new investment opportunities to boost its production and expand investment in exploration projects including the recent acquisition of the Sarawak SK410B project in Malaysia.
So far this year, PTTEP shares have risen 44 percent, outperforming a 16 percent rise on the main Thai index.