SET-listed PTT Exploration and Production Plc (PTTEP) has posted a surge in net profit of US$388 million in the first nine months of the year.
The rise has been attributed to smart spending on projects and cost-cutting measures that have helped the company to make a profit at a time of low global oil prices.
President and chief executive Somporn Vongvuthipornchai said the profit in the first nine months was a reversal from the net loss of $986 million in the same period of 2015, when an impairment loss of $1.39 billion was recorded.
The SET-listed company is also in a strong financial position with $3.7 billion cash on hand, ready for new investment opportunities to boost future production.
The healthy financial position will enable the company to pursue investment opportunities, with particular focus on production assets or those nearing the development or production stage in Southeast Asia as well as to expand investment in exploration projects, such as the recent acquisition of Sarawak's SK410B project, situated in an area of high potential in Malaysia.
"During the nine-month period, operating cash flow remained healthy at $1.73 billion, adequate to fund capital expenditure in order to maintain the production level," said Mr Somporn.
For the first nine months, PTTEP reported a total revenue of $3.28 billion, down from the same period of 2015 due to lower average selling prices as a result of the slump in global crude prices.
The average selling price was $36 per barrel of oil equivalent, down from $47.47 per BOE in the previous year.
However, petroleum sales volume stood at 320,600 BOE per day, which remains on track with the plan to maintain 2016 sales volume on par with 2015.
Regarding cost-cutting measures, the company slashed costs per unit by 23% in the first nine months from $38.88 per BOE to $29.98, surpassing the cost-cutting target of 10%.
For the third quarter of 2016 alone, PTTEP reported a net profit of $156 million compared with a net loss of $1.28 billion in the same period last year.
"PTTEP's operating results in the first nine months of this year saw a considerable improvement although oil prices are still low. The result reflects the company's ability to manage controllable factors mainly in production volume stabilisation and the 'Save to be Safe' cost reduction campaign," said Mr Somporn.
PTTEP has said it will not be cutting staff numbers even though global oil prices have remained low for about two years. Keeping the employees will help the company with its plans to increase sales volume, it said.
The company is developing oil and gas blocks that are due to start operation in the next 10 years. PTTEP operations cover 39 projects in 12 countries.
PTTEP shares closed yesterday on the Stock Exchange of Thailand at 83 baht, up 50 satang, in trade worth 589 million baht.