· Average sales volume of 325,257 BOED delivered as planned
· Strong financial position maintained with USD 3.2 billion cash on hand
· Expands investment into high-potential exploration project in Malaysia
Somporn Vongvuthipornchai, President and Chief Executive Officer of PTT Exploration and Production Public Company Limited (PTTEP) revealed that amid the volatility of oil prices globally, PTTEP reported a net profit of USD 232 million for the first half of 2016. The result embodies the continuous emphasis on business improvements through maintaining production and delivering cost reduction initiatives under the SAVE to be SAFE program. Taking into account a robust financial profile with cash on hand of around USD 3.2 billion and operating cash flow of USD 1,038 million as of the first half of 2016, the company has not only declared a dividend payment at 0.75 Baht per share, but has also prepared for new investment opportunities as exemplified by our recent investment in the high-potential exploration project in Malaysia.
For the first six months of 2016, PTTEP reported total revenue of USD 2,203 million, a decrease from the same period of last year primarily due to average selling price which has fallen by 27% in correlation to the low crude oil price. Sales volume stood at 325,257 barrels of oil equivalent per day (BOED), an increase of 3% compared to that of last year. Moreover, the unit cost for the first half of 2016 decreased to USD 29.42 per BOE, representing more than 20% reduction from the 2015 average. This was due to a number of cost reduction and efficiency improvement activities, which includes lower drilling days and drilling cost as well as renegotiation of major equipment rental and service contracts.
This resulted in a recurring net profit of USD 270 million. However, the company recorded a non-recurring loss of USD 38 million, primarily driven by the USD 126 million loss from unrealized oil price hedging contracts, a majority of which was a mark-to-market valuation of outstanding hedging positions and did not impact the cash flow (Note: oil price hedging gain or loss of these outstanding positions will be realized as per actual oil prices on the settlement dates that will take place in the third and fourth quarters of 2016), and the tax savings that resulted from the appreciation in Thai Baht against US Dollar from 36.09 Baht per USD to 35.18 Baht per USD at the end of the second quarter of 2016.
Based on the company's performance and financial status in the first half, on July 28, 2016, the Board of Directors approved the payment of an Interim Dividend from consolidated performance of PTTEP and its subsidiaries for the first half of 2016 to the shareholders at THB 0.75 baht per share. The closing date of the company's share registration for the right to receive the dividend is scheduled on August 11, 2016, followed by a dividend payment on August 25, 2016.
Somporn said "The company's financial performance in the first half of 2016 reflects our commitment towards resiliency to cope with the oil price uncertainty. This includes optimizing cost structure and work processes to maintain competitiveness and expanding investment plans towards areas of high expertise and high petroleum potential, such as the recent investment in exploration Block SK410B in Malaysia, in alignment with PTTEP's strategy of "RESET REFOCUS RENEW". We believe that these approaches would help us to manage our business towards sustainable growth under the current oil price crisis and uncertain global events."