Global Oil & Gas: Thailand’s PTTEP Q2 profit drops 50 percent

Thailand’s PTT Exploration and Production Pcl (PTTEP) reported on Thursday a 49 percent drop in net profit on higher expenses and a weaker baht.

PTTEP booked profits of 3.59 billion baht, or $113 million, for the second quarter ending in June versus $220 million during the same period a year ago, the company said in a statement. Earnings missed the Thomson Reuters I/B/E/S estimates of 11.5 billion baht ($345.86 million).

PTTEP booked expenses of $908 million, up 21 percent a year ago, due to foreign exchange losses and depreciation.

The baht has declined about 2.5 percent so far this year against the U.S. dollar.

Profits before taxes were $441.5 million, up 53 percent from a year earlier.

Revenue rose 30 percent to $1.34 billion from $1.03 billion from the same period a year ago driven by a 7 percent rise in sales volume and 23 percent rise in average selling price.

The earnings announcement comes during PTTEP’s strategy to “refocus” the company’s direction, it said in a statement.

PTTEP, the upstream arm of state-owned PTT Pcl, was focusing its investments in Southeast Asia and the Middle East, areas which it had experience and deemed to have low risk, it said.

Earlier this month, the oil explorer divested its interest in the Montara field in Australia, which would fetch up to $355 million as part of “portfolio rationalization.” In expects to sell 310,000 barrels of oil equivalent per day for 2018 at a unit cost between $30 to $32 per barrel with an earnings before interest, depreciation and amortization (EBITDA) margin of 70 percent to 75 percent.

“For the rest of the year, we will press ahead with the bidding for expiring Bongkot and Erawan concession,” Chief Executive Somporn Vongvuthipornchai said in a statement.

The auctions are slated to take place on Sept. 25 .

It also plans reach a final investment decision for its project in Mozambique in first half of 2019.

PTTEP expects benchmark Dubai crude prices in the second of half of the year to be between $65 to $75 per barrel due to tightening supply from U.S. sanctions on Venezuela and Iran, slowdown in U.S. production and an extended supply cut by the Organization of the Petroleum Exporting Countries, it said in a statement.

It expects liquefied natural gas prices to improve in the second half of the year to be between $7.30 and $9.60 per million British thermal units. source: Reuters; ($1 = 33.2500 baht; Reporting by Chayut Setboonsarng; Editing by Christian Schmollinger)