PTT Exploration & Production PLC · SET:PTTEP
PTT Exploration & Production — Q1 2004 Earnings Presentation
58 slides from PTT Exploration & Production's earnings presentation, May 19, 2004
Slide 1: Analyst Meeting May 19, 2004
(‘) Analyst Meeting May 19, 2004 Pil Exploration & Production Pic. WANN, pttep.Conn
Slide 2: Disclaimer
Disclaimer The information, statements, forecasts and projections contained herein reflect the Company’s current views with respect to future events and financial performance. These views are based on assumptions subject to various risks. No assurance is given that future events will occur, or that
Slide 3: Highlights
Highlights I. Overview & Updates II. Projects & Investment Opportunities III. Financial Highlights IV. Supplement www.pttep.com 1
Slide 4: PTTEP Overview
PTTEP Overview Sole Thai Exploration & Production Company State Enterprise with PTT as major shareholder (64.11%) Top ten listed company in Thailand with Market Capitalization of approx. US$ 4 billion High growth company with competitive advantage in gas market Proved Reserves of 964 MMBOE - as of J
Slide 5: 2004 Targets
2004 Targets Sales volume of approx. 129,000 BOE/D (VS. previous target of 107,000 BOE/D) Signing of Arthit GSA (Jan. 23’04) Maximize value of the recently acquired S1 Initiate B6/27 oil production Study & secure gas market for Sham field in Oman & JDA 3
Slide 6: Strategic Direction
Strategic Direction Maximize values of existing projects - Synergy - Improve Operational Efficiency Seek growth - Capitalize on Thai Gas Market Niche - Seek International Opportunities in Petroleum - Rich Areas Enhance organization capability - Human - Process - Governance 4
Slide 7: Increasing Product Price
Increasing Product Price US$/BBL US$/MMBTU 35- 33- SFO 3.5 % DUBAI 31- 29- 27- 25- PTTEP 23- Avg. Product Price 21- 19- 17- 15- Oct JAN04 Mar Jul Dec Apr Oct May Sep Nov b Aug Fe Mar Apr Mar Apr Jun Sep Nov Dec Mar May Feb Aug Feb May Jul Apr Jun Jul Sep Oct Jun JAN01 Nov Dec JAN03 Feb Aug JAN02 Q1
Slide 8: Less Volatile Gas Price
Less Volatile Gas Price Product Mix: Gas 74%, Liquid 26% (2003) Gas 68%, Liquid 32% (2004 Forecast) Gas price: Long-term contract Adjusted regularly every 3 months, 6 months, etc. US$/MMBTU Fixed formula, based on Fuel Oil, Inflation, FX etc. 3.5 - - 3.5 3.13 3- PTTEP -3 Avg. Gas Price* 2.5 - - 2.5
Slide 9: Strong Sales Volume for Existing Projects
Strong Sales Volume for Existing Projects 000’ BOED 200 1 0 .6 % 193 Others CA G R 178 JDA 160 152 (2008 Est.) Actual 129 133 Arthit 120 107 (2H 2006) Yetagun 80 Yadana S1 40 Pailin 0 Bongkot 2003 2004 2005 2006 2007 2008 Additional B6/27 Oman Algeria SW Vietnam Target Blk.9-2&16-1 Upside G4/43, G9/
Slide 10: Strong Gas Market Growth
Strong Gas Market Growth (May 2004) MMCFD H.V. 1000 BTU Demand growth increases to 8% from 6% previously Gas Demand 5,000 (CAGR 8%) 4,000 Demand cap Room for Future Gas Supply by P/L limit fr o m Swing y 3,000 Suppl JDA Arthit 2,000 Special Contract & Make Up DCQs 1,000 0 2003 2004 2005 2006 2007 20
Slide 11: Upside to Reserves Base
Upside to Reserves Base (As of January 1, 2004) Liquid 16% Overseas 38% 153 MMBOE 371 MMBOE 593 MMBOE 811 MMBOE Gas 84% Thailand 62% Total Proved Reserves = 964 MMBOE - Customer: PTT 98%, EGAT 2% - Upside: B6/27, Oman, Algeria, L22/43, M-7 & M-9, SW Vietnam, G4/43, G9/43, L53 & 54/43, Blk. 9-2 & 16-
Slide 12: Low Cost Operator
Low Cost Operator 2002 2003 1Q’2004 z Lifting Cost 1.95 1.63 1.98 (US$/BOE) z Unit Cost of Production 2.41 2.21 2.45 (US$/BOE) z F&D Cost (3 year avg.) 4.18 2.03 n.a (US$/BOE) Lifting Cost = (Field operation expense + Project G&A) / Sales Unit Cost of Production = (Lifting + HO G&A – Financial Charg
Slide 13: Highlights
Highlights I. Overview & Updates II. Projects & Investment Opportunities III. Financial Highlights IV. Supplement www.pttep.com 11
Slide 14: PTTEP Production Asset
PTTEP Production Asset PTTEP’s Operator Production Bongkot 44.44 % PTTEP Pailin (B12/27) 45 % Unocal Unocal III 5% Unocal S1 (Sirikit) 100 % PTTEP PTTEP1 100 % PTTEP E5 (Nam Phong) 20 % Esso Yadana 25.50 % TOTAL Yetagun 19.32 % PC* (* PC is an abbreviation of Petronas Carigali) Investment Medco Ener
Slide 15: PTTEP Exploration & Development Asset
PTTEP Exploration & Development Asset PTTEP’s Operator Exploration & Development Arthit 80% PTTEP JDA (B17, C19) 50% PTTEP/Petronas B6/27* 100% PTTEP L22/43 100% PTTEP L53 & 54/43 100% PTTEP G9/43 100% PTTEP G4/43 15% Chevron (* Re-start of production) 13
Slide 16: PTTEP Exploration & Development Asset
PTTEP Exploration & Development Asset PTTEP’s Operator Exploration & Development Block 44 (Oman) 100% PTTEP Block 9-2 25% PTTEP/Joint Block 16-1 28.5% PTTEP/Joint Block M-7 & M-9 100% PTTEP Block B & 48/95 8.5% Unocal Block 52/97 7% Unocal Block 433a & 416b 35%* Petrovietnam * (Subject to approval f
Slide 17: S1: Perfect Fit with Strategic Direction
S1: Perfect Fit with Strategic Direction N • PTTEP’s share increased from 25% S1 to 100% • Q1’04 sales volume Oil: 18,025 BBL/D Pratu Tao Gas: 38 MMCFD Nong Tum Wat Taen Sirikit West Thap Raet LPG: 282 Ton/D Sirikit East Nmm East Pru Krathiam Drilling Campaign for 2004 2 Appraisal wells Sirikit Fiel
Slide 18: Success of S1 Acquisition
Success of S1 Acquisition Interest Q1’04 Financial Results of S1 75% 100% • Sales volume (BOE/D) 20,818 27,452 • Sales revenue (MM. Baht) 1,710 2,280 • Avg. selling price (US$/BOE) 23.29 Acquisition Cost (MM.Baht) 7,638 (for S1 (75% interest) & B6/27 (100% interest)) EBITDA (MM. Baht) 1,645 Net prof
Slide 19: Arthit: Key Driver for Growth
Arthit : Key Driver for Growth • PTTEP as Operator with 80% share • Gas Sales Agreement signed on Jan. 23, 2004 • Drilling Campaign of 8 exploration & development wells in 2004 • Drilling Campaign of 58 appraisal & development wells for 2005 - 2006 • Plan for first gas production at 330 MMSCFD in 2H
Slide 20: Block M-7 & M-9
Block : M-7 & M-9 z PTTEP holds 100% interest z First operatorship in Myanmar z Two discovery wells with flow rate of 18 MMSCFD in Block M-7 & 25 MMSCFD in Block M-9 z Drilling Campaign for 2005 2 exploration wells z Future energy source for Thailand 18
Slide 21: Investment Opportunities
Investment Opportunities Asia Pacific z Thailand z Myanmar z Vietnam Middle East z Malaysia North Africa z Oman z Indonesia z Algeria No. 1 in Thailand, core market A lot of opportunities to expand in neighboring countries 19
Slide 22: Highlights
Highlights I. Overview & Updates II. Projects & Investment Opportunities III. Financial Highlights IV. Supplement www.pttep.com 20
Slide 23: Strong Financial Position
Strong Financial Position YoY Q1’04 Q1’03 Change z Avg. sales volume (BOE/ D) 129,187 98,008 31,179 z Avg. sales price (US$/BOE) 21.76 20.70 1.06 z Debt 18,051 21,561 3,510 z Debt / Equity 0.37 0.53 (-0.16) z Net Debt / Equity 0.03 0.02 0.01 z EBITDA 7,931 5,688 2,243 z Earning per share (Baht) 5.18
Slide 24: Income Statements
Income Statements YoY Million Baht Q1'04 Q1'03 Change Revenues Sales 10,189 7,812 2,377 Pipeline transportation income 358 209 149 Gain on FX 105 110 (5) Interest income 42 59 (17) Other revenues 15 9 6 Share of profit from investment - 169 (169) Total Revenues 10,709 8,368 2,341 Expenses Production
Slide 25: Balance Sheets: Assets
Balance Sheets: Assets Million Baht As of Mar 04 As of Dec 03 Change Assets Cash & Cash Equivalents 16,396 19,063 (2,667) Short-term investments 3,337 2,396 941 Trade Receivables 4,980 4,060 920 Inventories 47 29 18 Material 1,174 837 337 Other Current Assets 715 813 (98) Total Current Assets 26,649
Slide 26: Balance Sheets: Liabilities & Equity
Balance Sheets: Liabilities & Equity Million Baht As of Mar04 As of Dec 03 Change Liabilities Account Payables 216 400 (184) Payable : Coventurer 150 87 63 Accrued expenses 2,491 2,243 248 Accrued interest payable 325 356 (31) Income tax payable 9,353 5,773 3,580 Other Current Liabilities 471 391 80
Slide 27: Cash Flow: Jan.-Mar. 2004
Cash Flow : Jan. – Mar. 2004 Unit : Million Baht Operation 8,064 Finance 5 Net Income & non- 6,263 cash adjustment Share issued 5 Changes in assets & liabilities 1,801 Investment (10,718) Cash In (Out) PP&E (3,077) PTTEPS acquisition (7,638) 8,069 Others (3) Ending Cash Beginning Cash Cash In (Out)
Slide 28: 5-Year Investment Plan
5-Year Investment Plan MM Baht Total CAPEX (2004-2008) 30,000 Baht = 70,400 MM 24,000 20,800 18,400 18,000 14,500 Actual 12,000 9,744 10,500 6,200 6,000 0 2003 2004 2005 2006 2007 2008 CAPEX Arthit 8,700 10,500 4,200 1,500 2,000 Excludes: Thai Shell Acquisition Cost of US$196 MM in 2004, L53/43 & L5
Slide 29: Conclusion
Conclusion Excellent asset base Solid financial performance Competitive advantage in gas market Bright future growth opportunities, i.e.. Arthit & JDA with sales volume target of 193,000 BOED in 2008 Develop and seek for new overseas projects i.e. Asia Pacific, Middle East, and Africa Fully committe
Slide 30: Supplement
Supplement I. Thai Energy Market Overview II. Projects Summary III. Outlook www.pttep.com 28
Slide 31: Upturn in Gas Consumption
Upturn in Gas Consumption MMSCFD @ 1000 BTU 3,000 2004 Jan-Apr 03 Jan-Apr 04 Growth 2,613 2,659 1.7 % 2,500 2003 Avg. 2,696 (growth 6.0%) 2002 Avg. 2,543 (growth 8.5%) 2001 Avg. 2,344 (growth 15.4%) 2000 Avg. 2,031 (growth 13.4%) 2,000 1,500 J F M A MJ J A S O N D Source: PTT & PTTEP 29
Slide 32: Upturn in Power Generation
Upturn in Power Generation GWH 11,500 2004 11,000 Jan-Apr 03 Jan-Apr 04 Growth 10,500 9,508 10,295 8.2 % 10,000 2003 Avg. 9,866 (growth 6.3%) 9,500 2002 Avg. 9,283 (growth 7.2%) 9,000 8,500 2001 Avg. 8,654 (growth 5.4%) 8,000 2000 Avg. 8,211 (growth 6.6%) 7,500 7,000 6,500 J F M A M J J A S O N D 30
Slide 33: Electricity Generation Forecast (GWh)
Electricity Generation Forecast (GWh) (2004-2012) GWh 300,000 250,000 200,000 150,000 100,000 CAGR 9% p.a. 50,000 CAGR 4% p.a. 0 1997a 1998a 1999a 2000a 2001a 2002a 2003a 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: PTTEP, as of September 2003 and May 2004 31
Slide 34: Supplement
Supplement I. Thai Energy Market Overview II. Projects Summary III. Outlook www.pttep.com 32
Slide 35: Bongkot: Navamindra Petroleum Area
Bongkot : Navamindra Petroleum Area z Operator with 44.4% share of largest gas field in Thailand z Q1’04 sales volume Gas: 578 MMSCFD Condensate: 17,190 BBL/D z Development Program for 2004: - Drilling 2 appraisal wells - Construction of 3 wellhead platforms 33
Slide 36: Pailin: Volume Growth
Pailin : Volume Growth z PTTEP’s share is 45% z Higher DCQ VS. Reduced Gas Price - Oct.’03: DCQ from 330 to 353 MMSCFD - Completion of 3rd pipeline: DCQ from 353 to 368 MMSCFD z Q1’04 sales volume Gas: 356 MMSCFD Condensate: 13,001 BBL/D z Development Program for 2004: - Drilling 44 development well
Slide 37: Blocks S1, L22/43 and B6/27
Blocks S1, L22/43 and B6/27 N S1 & L 22/43 B6/27 Pratu Tao Nong Tum Wat Taen Sirikit West Thap Raet Sirikit East Nmm East Pru Krathiam Sirikit Field Block L22/43 Total Areas: S1 1,328 sq.km. B6/27 1,303 sq.km. L 22/43 3,632 sq.km. 35
Slide 38: S1: Rising Stake
S1: Rising Stake z US$ 196 MM acquisition cost for S1 (75%) & B6/27 (100%) z Increase crude oil reserve portfolio of PTTEP (from 13% to 16%) z Additional experienced human resources (about 300 persons), operational disciplines 36
Slide 39: S1 5-Year Investment Plan
S1 5-Year Investment Plan MM Baht Total CAPEX (2004-2008) Baht = 3,900 MM 2,000 1,500 1,400 1,400 1,000 500 400 400 300 0 2004 2005 2006 2007 2008 Excluded Thai Shell Acquisition Cost of US$ 196 MM in 2004 37
Slide 40: S1 Sales Volume Profile
S1 Sales Volume Profile 000’ BOED 40 30 28 26 25 20 19 16 10 0 2004 2005 2006 2007 2008 38
Slide 41: Yadana: Strong & Steady Supply
Yadana : Strong & Steady Supply z PTTEP’s share is 25.5% z Q1’04 sales volume Gas: 538 MMCFD z Development of Sien Field for domestic market YADANA BADAMYAR M5 SEIN M6 39
Slide 42: Yetagun: Rising Supply
Yetagun : Rising Supply z PTTEP’s share increased from 14.2% to 19.3% z Q1’ 04 sales volume Gas: 237 MMSCFD Condensate: 4,396 BBL/D z Development Program for 2004: - Drilling 4 development wells - Facilities have been upgraded to accommodate DCQ increase to 400 MMCFD 40
Slide 43: Arthit: 2004-2006 Work Plan
Arthit : 2004 - 2006 Work Plan Construction Phase 1 AWP5 • 1 Production Platform AFP AWP1 APP AWP2 AQP • 1 Quarter Platform AWP4 • 5 Wellhead Platforms PT 2” to AWP3 4 T3 E rd P aw 17 • 4 Inter Field Sealines ipe an 3k r D 8" O . lin m e m hit 31 k Art om Fr m 42” 18 k • 1 Condensate Sealine 42 ” Bo
Slide 44: Arthit: Gas Sales Agreement
Arthit : Gas Sales Agreement GSA : Long term contract (30 years + 10 years) Price adjusted once a year in Oct. Fixed formula, based on Singapore Fuel Oil Inflation FX etc. DCQ : 330 MMSCFD (optional to 500 MMSCFD) 42
Slide 45: JDA (B17 & C19)
JDA (B17 & C19) Concession Map z Joint operatorship with Muda-1 Muda-4 Muda-3 Petronas Carigali (50 : 50) Muda-2 Tapi 1 Amarit-1 Basic engineering study in Q4’04 Jengka-1 17-B-1 Mali-1 z BLOCK 17 z Approaching buyer for BLOCK 18 BLOCK 19 opportunities in Malaysia / Thailand around 2007 / 2008 z Basi
Slide 46: Oman: New Territory
Oman : New Territory z PTTEP holds 100% interest in Block 44. 2004 Activities: z G&G studies & evaluation z Conduct 3D seismic processing & well proposal z Drilling preparation z Shams Gas Field re-evaluation z Drilling Campaign for 2004: - 1 exploration well 44
Slide 47: Vietnam: Block 9-2 & 16-1
Vietnam : Block 9-2 & 16-1 z Investment in Vietnam 25% interest in Block 9-2 28.5% interest in Block 16-1 z Block 9-2 - 1 Oil discovery well - 3 Non-commercial wells z Block 16-1 - 4 Non-commercial wells 45
Slide 48: Algeria: Exploration Block 433a & 416b
Algeria : Exploration Block 433a & 416b • PTTEP holds 35% interest* * (Subject to PSC addendum approval by the Algeria Government) • 6,472 Sq. km.; near Touggourt in the southeast of Algeria 2004 Activities: • 2D seismic survey of 312 km. • Drilling Campaign for 2004: - 1st exploration well in Dec.
Slide 49: Shareholding Synergy
Shareholding Synergy Medco is backed by strong credit worthy shareholders with financial, operational and local / political knowledge, experience and resources to ensure the successful execution of its business strategy. 47
Slide 50: Medco Overview
Medco Overview Strategic assets spread across Indonesia E&P focused company, supported by onshore and offshore drilling operations Largest independent E&P company in Indonesia - only publicly listed E&P company on Jakarta Exchange - Proved Reserves (as of Dec. 31, 2003) Exploration & Drilling Me
Slide 51: Medco: Assets Across the Country
Medco: Assets Across the Country Medco’s exploration assets include: ♦ 6 producing areas ♦ 7 exploration blocks Major assets are: ♦ Rimau for oil reserves ♦ Senoro –Toili and Lematang for gas reserves ♦ Kampar / Extension for oil reserves Sumatra Recent major Kalimantan acquisitions include: ♦ Tuban
Slide 52: Medco
Medco Operation Highlights 2003 2002 % - Oil / BOPD 66,820 85,480 -22 - Gas Sales / MMCFD 87.9 67.6 30 - Offshore Rig Utilization / % 78 70 11.4 - Onshore Rig Utilization / % 57 61 -6.6 - Methanol Production / MT 265,451 223,364 18.8 - Methanol Sales / MT 262,000 232,576 12.6 - Crude Price, US$/barr
Slide 53: Medco: Updates
Medco : Updates • Net profit decreased from US$ 82.6 MM. to US$ 53.4 MM. due to oil production (mostly from Kaji/Semoga field, Rimau Block & South Sumatra) declined from 85,480 to 66,820 BOE/D & interest expense from the Company’s Bonds. • Changed of Company’s logo to reflect the same identity in al
Slide 54: Medco: 2004 Plan
Medco : 2004 Plan • Exploration : 6 exploration, 1 development drilling and 300 sq.km. seismic planned • Oil Production : expected additional oil production from the latest fields in Tuban and Langsa • Gas Production : new contracts on gas sales. • Drillling Services : 2 new rigs added in 2003 will
Slide 55: Supplement
Supplement I. Thai Energy Market Overview II. Projects Summary III. Outlook www.pttep.com 53
Slide 56: Outlook
Outlook Capitalize on growing use of natural gas in Thailand Enhance & retain strong financial position Looking for production & reserves growth opportunities locally and abroad 54
Slide 57: Strengthening Corporate Governance
Strengthening Corporate Governance CG Campaign 2003 – 2005 CG Booklets issued to all employees/ management CG Hotline set up to encourage reporting on CG issues SET Award 2003 “Best Corporate Governance Report” (1 of 15 listed companies) 55
Slide 58: Contact Investor Relations
Contact Investor Relations: z Tel. 66 (0) 2537-4512 , 66 (0) 2537-4611 z Fax 66 (0) 2537-4874 z E-mail: ir@pttep.com z Address: PTT Exploration & Production Plc. PTTEP Office Building 555 Vibhavadi-Rangsit Road Chatuchak, Bangkok 10900 Thailand 56
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