Thai PTTEP turns a Q3 profit, sees crude prices rising in Q4

A view of a PTT Pcl energy firm logo is seen at the firm's commercial EV (Electric Vehicle) charging station, in Bangkok, Thailand August 15, 2016. REUTERS/Jorge Silva

BANGKOK: Thailand’s largest oil and gas explorer, PTT Exploration and Production Pcl, posted on Thursday 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 US$156mil (RM654.2mil) for July-September, versus a loss of US$1.28bil (RM5.37bil) a year earlier when it booked an impairment loss on assets of US$1.39bil (RM5.83bil).

That compared with the average 5.36 billion baht (RM640.66mil) profit forecast by 11 analysts polled by Reuters.

Profit from normal operations was at US$75mil (RM314.6mil), down 72% from a year earlier, while it booked a gain of US$23mil (RM96.5mil) 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 US$45-55 a barrel”, it said.

Dubai crude prices averaged US$43.17 a barrel in the third quarter, it said.

The company’s third-quarter revenue fell 24% on year to US$1.11bil, with average sales volume down 3% 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% from a year earlier to US$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% in the first nine months to US$29.98 per barrel, better than its cost-reduction target of 10%, CEO Somporn Vongvuthipornchai said in the statement.

PTTEP has cash on hand of US$3.72bil (RM15.6mil), 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%, outperforming a 16% rise on the main Thai index. - Reuters