Thailand: PTTEP cuts 2017 budget by 30% for efficiency

Thailand: PTTEP cuts 2017 budget by 30% for efficiency

SET-listed PTT Exploration and Production Plc (PTTEP), the country's biggest
oil and gas explorer, has cut its 2017 investment budget by 30% to US$2.9
billion and is focusing on efficiency, says president and chief executive
Somporn Vongvuthipornchai.

Of the $2.9 billion, $1.64 billion is for capital expenditure (capex) and
1.26 billion is for operating expenditure, Mr Somporn said.

Investment in existing projects in Thailand and Southeast Asia, the
company's strategic investment locations, accounts for 88% of total capex,
he said. Projects in Thailand make up 64% of PTTEP's estimated 2017 capex.

The priority is to maintain production level at existing projects, which
include the Arthit, S1, Bongkot, Contract 4 and MTJDA projects.

Other projects in Southeast Asia account for 24%, which include maintaining
production level at the Zawtika and Yadana projects in Myanmar, as well as
exploration activities for the Myanmar MOGE 3 and Myanmar M11 projects.

Projects in other regions such as Australia, Africa and the Americas account
for 12% of its capex. The company will also continue its operational
activities in PTTEP's Australasia project and the pre-development of the
Mozambique Rovuma Offshore Area 1 project.

Estimated exploration expenditure for 2017 has been allocated $138 million,
mostly to be used for seismic acquisition, geological and geophysical
studies, and drilling and appraisal activities.

PTTEP has set its investment budget for the next five years (2017-21) at $15
billion.

The budget has already factored in the recent oil price recovery, which
began in late 2016.

Capex includes the pre-development of Contract 4 (Ubon) project, the
Mozambique Rovuma Offshore Area 1 project and the Algeria Hassi Bir Rekaiz
project.

PTTEP will maintain sales volume at an average of 312 kilobarrels of oil
equivalent per day, down slightly from the previous estimation of 331.

"The investment plan reflects our strategic direction of 3 Rs -- Reset,
Refocus, Renew -- with a priority on maintaining the production level to
effectively serve domestic energy demand, as well as accelerating the
development of existing projects in the pipeline," Mr Somporn said.

PTTEP is closely monitoring the oil price situation, and maintains
flexibility to readjust the investment plan should the need arise while
striving to uphold cost optimisation and efficiency improvement.

Since the collapse of global oil prices, which began in 2014, the company
has lowered its expenditures.

The company now has cash on hand of over $3 billion and is ready to cope
with oil price fluctuations.

PTTEP posted a net profit of $388 million in the first nine months of 2016,
reversing a net loss of $986 million in the same period of 2015.

PTTEP shares closed yesterday on the Stock Exchange of Thailand at 96 baht,
down 1.75 baht, in trade worth 1.38 billion baht.

--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---

Link to Original Article:
http://www.bangkokpost.com/business/news/1177893/pttep-cuts-2017-budget-by-3
0-for-efficiency
http://www.bangkokpost.com/business/news/1177893/pttep-cuts-2017-budget-by-3
0-for-efficiency

--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---

John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com