PTTEP Reports 27% Increase in 3Q Earnings, Expecting Sales Volume to Grow in 2021

PTT Exploration and Production Public Company Limited (PTTEP) has announced its 3Q21 consolidated financial statement through the Stock Exchange of Thailand as follows;

PTTEP reported a net profit in 3Q21 at 292 million dollars, increased 27% from a net profit of 230 million dollars in 3Q20. The increase was primarily from an increase in revenue from sales, offset with loss on foreign exchange and loss on financial instruments (3Q20: recognized gain), together with an increase in exploration expenses.

 

The profit from normal operation in 3Q21 was 335 million dollars, an increase of 140 million dollars when compared with a profit in 3Q20 of 195 million dollars was due to an increase in revenue from sales of 516 million dollars, mainly from revenue from petroleum sales with 21% increase in average sales volume and 14% increase in average selling price. On the other hand, expenses increased primarily from an increase in income taxes of 186 million dollars mainly from higher profit from projects in Thailand and Oman Block 61 Project which partially was a gradual recognition of non-cash expenses from deferred tax assets.

In addition, depreciation, depletion and amortization increased by 91 million dollars primarily from the acquisition of Oman Block 61 Project and S1 Project due to additional completed assets. Exploration expenses increased by 42 million dollars from exploration well write-off and operating expenses increased of 39 million dollars primarily from the acquisition of Oman Block 61 Project and Malaysia Project higher maintenance activities.

 

The loss from non-recurring items in 3Q21 was 43 million dollars, a change of 78 million dollars compared with a profit in 3Q20 of 35 million dollars was primarily from a change in loss on foreign exchange of 46 million dollars since the Group recognized loss of 36 million dollars in this quarter due to the depreciation of Thai Baht against USD (3Q20: recognized gain of 10 million dollars).

Additionally, there was a change in loss on financial instruments of 32 million dollars since the Group recognized loss of 5 million dollars in this quarter which mainly came from loss on oil price hedging instruments due to an upward trend of forward oil price, offset with gain on foreign exchange forward contracts since Thai Baht was depreciated against USD.

However, 3Q20 recognized gain of 27 million dollars, primarily from foreign exchange forward contracts due to the depreciation of Thai Baht against USD.

 

The company stated that Dubai crude price in 3Q21 increased to an average of 71.68 USD per barrel, slightly higher than 2Q21 at an average price of 66.9 USD per barrel. The increase in prices was from the recovery of global demand that outweighed supply increase resulting in global crude oil inventories to fall below the 5-year average.

On the demand side, economic stimulus packages by governments, lockdown easing and travel seasons in the U.S. and Europe, together with all-time high gas prices that prompted consumers to switch from using gas into oil, had led to demand recovery in 3Q21. However, COVID-19 Delta variant spread in Asia where vaccination rate was moderate, urging many countries including China to enforce lockdown measures resulting in lower regional crude demand.

 

PTTEP expects the average sales volume for the full year of 2021 to be approximately 417,000 barrels of oil equivalent per day. The sales volume growth in 2021, compared to the previous year, was mainly driven from the start-up of Malaysia Block H Project and the acquisition of 20% interest in Oman Block 61 Project, which the transaction was completed on March 23, 2021.