PTTEP sticks with dividend despite 6% profit slump for first half

The energy giant’s board of directors decided to keep the interim dividend payment at Bt1.75 per share. The record date for the right to receive the dividend is August 9, with payment on August 24, the company’s chief executive officer Somporn Vongvuthipornchai said yesterday.
Somporn said the company reported first-half operating results with recurring net income of US$ 640 million, increasing by 69 per cent from US$378 in the same period of 2017. 
However, PTTEP recorded losses from non-recurring items of US$ 104 million, largely driven by losses and tax expenses owing to the depreciation of the baht against the US dollar and oil price hedging losses, which mostly have no impact to company’s cash flow. 
Total revenue was generated for the period was US$ 2.56 billion, rising 21 per cent from US$2.12 billion a year ago. The improved revenue was primarily attributed to recovered average selling price of US$ 45.51 per barrel of oil equivalent (BOE), representing a 20 per cent increase compared to US$38.04 per BOE in the first half of 2017. The average sales volume showed a slight increase to 297,999 barrels of oil equivalent per day (BOED) from 292,709 BOED in the first half of last year.
 The six-month unit cost adjusted upward by 7 per cent from US$ 28.29 per BOE a year ago to US$30.37 per BOE due to higher royalty expenses and depreciation, depletion and amortisation expenses (DD&A) as a result of larger completed assets recognition - essentially from the S1 project and the Contract 4 project. However, PTTEP said it is confident that unit cost this year will be US$30-31 as targeted.
Somporn said that 3Rs strategy (reset-refocus-renew) remains the company’s key direction this year. In the first half of this year, under the Refocus strategy, the company made significant achievements, particularly the acquisition in the Bongkot stake from Shell affiliates. This has increased PTTEP’s stake in the Bongkot field to 66.6667 per cent, with the increment of average sales volume approximately 35,000 BOED.
“We always open for opportunities and be resilient to adjust our investment plan so that we can cope with the changes in the industry landscape,” he said. “Recently, we were successful in acquiring additional shares in the Bongkot field and, in July, announced the divestment of the Montara field. For the rest of the year, we will press ahead with the bidding for expiring Bongkot and Erawan concessions. These reflect our business direction in focusing on the investments in our strategic areas - Southeast Asia and the Middle East – which have low risk and we also have experience.”
Other business progress include the approval of development plans of the Algeria Hassi Bir Rekaiz project. The Mozambique Rovuma Offshore Area 1 project has also made significant progress such as the preparation for construction of onshore LNG liquefaction plant and the finalisation of other LNG sale and purchase agreements (SPAs), which are key conditions to support the final investment decision (FID) of the project, planned in the first half of 2019, Somporn said.