Q3 2017 PTT Exploration and Production PCL Earnings Call

Nov 02, 2017 AM EDT
PTTEP.BK - PTT Exploration and Production PCL
Q3 2017 PTT Exploration and Production PCL Earnings Call
Nov 02, 2017 / 09:00AM GMT 

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Corporate Participants
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   *  Chanamas Sasnanand
      PTT Exploration and Production Public Company Limited - VP of Capital and IR

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Conference Call Participants
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   *  Abhishek Nigam
      Nomura Securities Co. Ltd., Research Division - Associate
   *  Mayank Maheshwari
      Morgan Stanley, Research Division - Research Analyst

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Presentation
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Operator   [1]
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 Hello, I think we can start now. Today we have Khun Chanamas, VP of Capital and Investor Relations here and also the IR team.

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 Chanamas Sasnanand,  PTT Exploration and Production Public Company Limited - VP of Capital and IR   [2]
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 Okay. I hope you already get presentation -- the conference call presentation in front of you at the momentum. This quarter, I will walk you through the presentation. (inaudible) has personal leave at this moment. I will be the person who is going to walk you through the conference (inaudible) today.

 Why don't we begin -- start with the Page 2. It is a summary of the financial results. As you will be aware that our net profit this quarter is reported as loss, as USD 264 million. Mainly this is caused by the impairment loss on Canadian Oil Sands, the project that which has been announced last -- a couple of weeks ago. And the impairment loss, its impact about USD 558 million. This is mainly the reason that why our bottom line we report loss this quarter. However, as we always communicate that the impaired loss is considered as a non-recurring item. So therefore, we would like to -- so it's not going to be an impact on any cash or any operating cash flow to the company.

 So I would like to highlight here that we would like to focus the net profit from operations, what we so call as a recurring net profit. When you look at on the table that recurring net income for this quarter is USD 218 million, which is increasing from the last quarter more than 30%. And I would like to walk you through line-by-line on the table, starting with the sales, the total revenue.

 You'll see that on the third quarter, the total revenue is reported at USD 1 billion, which is higher than the last period at about 10%. And this majority will be because of the sales revenue has been increasing aligned with the sales volume, has been increasing by 6% if you compare to the last quarter. For this quarter the sales volume reported as 298,000 barrels of oil equivalent per day and with the higher net sales prices that make up the total revenue higher, more than 10% for this quarter. I will report some more details on the volume and price on the next page. But let me touch on the total expense first.

 So in the line total expense, the third quarter has recorded USD 1.4 billion, which is higher than last quarter quite significantly, above 70%, but mainly is from impairment loss on the Canadian Oil Sands, which is half of it already. So if I go to line-by-line on the major expense, let's start with operating expense, which we booked this quarter is USD 162 million, up by 6%, which is more in line with the production volumes that have been increasing for this quarter as well. So that more or less the operating expense is more correlated, highly correlated to the volumes contribution for this quarter.

 On the exploration expense side, I think a lot of people will have a question why it is so low for this quarter. Mainly the reason is because of the -- we already have done all the drilling activities in the first half of this year. So the rest of the year will be more on the analyzed data side, so it does not have costs, like a drilling activity. So we can foresee that for the second half the exploration expense will not be that high when compared to the first half of this year. For the DD&A, you will see that it's increased by 8% and it's mainly due to the increase in the production volumes.

 We already touched on the impairment loss that we have booked USD 558 million, and as we mentioned on the second announcement that after the reassessment of the industry and the commercial feasibility study of the project, and we decided that we have to revise the schedule, including the project development plan, which is going to be [effect] to the FID of the project, there will be delay on a couple of years. So this is the basis, one of the key triggers that the company has to test the impairment, and as a result that we need to book the impairment loss for this quarter. So the book value of the oil sands at the moment [will be] roughly about USD 40 million in our book at the moment.

 For the income tax expense, eventually for this quarter, you will see that it has decreased at about 15%, which is normally -- it should be in line with the production volume, high revenue, it should be high income tax. But because we have a non-recurring item, what we call like a deferred tax that when the [Baht] appreciated over the period, we will have recognized that we have -- it's safe to tap on the deferred tax, if you remember that we have the tax that's related to the gain/loss on FX on the functional currency. That is more or less the reason why our income tax expense is not correlated to the production or to the sales revenue for this quarter.

 Let's go to the -- that -- overall that make the non-recurring net income still very strong. That's why our sales volume -- increasing in sales volume, price is still slightly increasing. That's why our recurring net income is up by 30% from last quarter. But if you look at non-recurring on the last bottom of the table. It reads off like 482 -- a loss of USD 482 million, mainly from impairment about USD 558 million. The rest will be related to the deferred taxes -- the [deferred tax effect] that we said that it comes from the Baht appreciation, about USD 80 million. And also there was a little bit loss on the financial instruments, including the FX and the oil price hedging, but it's not insignificant for this quarter, roughly about less than USD 5 million. So all together, it comprised broadly non-recurring that has made loss of USD 482 million. That's why our net profit this quarter, we report loss.

 If you have no further questions on the Page 2, I would like to flip on to Page 3, which has (inaudible) some more details about sales volume and selling price. I would like to focus on the Q-o-Q first, the gas price. Let's start with the sales volume first. You will see that as I mentioned earlier, the third quarter, the sales volume is reported almost 298,000 BOE per day; that's increasing more than 6% from last quarter. The main reason is because of all of the -- we have [foreseen] that the situation of the low nom has been eased, the PTTEP start -- I am sorry -- PTT, who is the buyer of our gas is starting to call the gas as planned. So there was no more issue on the MTJDA side. So the MTJDA can supply gas to the buyer as planned. And also the Montara that has been increasing the volume for this quarter as well. What I mean is have additional load from the Montara itself. So that make it up like the third quarter has been up -- have been increasing more than 6% from last quarter.

 For the gas price, you will see that this quarter has been gradually increasing form last quarter. So the gas price recorded [$5.7 per MMBTU], which is in line with the increase in the oil price lately. Liquid price is more or less benchmarking to the oil price in the market. So come up with a weighted average product price at [$38.78 per BOE], which is slightly increasing from the last period, just only up 1% or 2%.

 If you look at the right-hand on volume mix, you will see more or less that we are still a gas-based company, where both volume and revenue, gas has been contributed more than 60% to 70% of our product. And this still a fair number to be throughout the year as well.

 Flipping on to the Page 4 is on the unit cost -- on the cost side. This is more or less to break down the P&L, in terms of the P&L. Starting with the total unit cost, that was at $28.5 per BOE and that's lower from the last quarter by 2%. And that's mainly from the lower exploration expense and the G&A per unit. That's more or less that main reason why the unit costs have been dropping by 2%.

 If you look in for more details for each line, I would like to start with the DD&A. For this quarter, the DD&A reported at $15 per BOE, slightly increased from last quarter. This is more or less in line with the production volume, especially in the Montara side that we have additional load for Montara. So we expect the D&A will be increasing as well.

 In term of finance cost per unit, you will see that it's not really changed, it has been dropping by 5% not because of the -- we have -- because of the volume itself, the increasing production volume. So the cost per unit has been lower. The royalty is not instantly going to change. The more significant change is on G&A and exploration expense. On the G&A side, it is more or less dropping by 7%, it's more or less on the production volume that has been -- the sales volume that has been increasing. So that's why per unit is bringing down the cost per unit.

 Exploration expense, we have already touched on that. I have already explained that. That's why it is lower, because of the lower activities in exploration, because the first half, we already done all the drilling activity.

 The operating expenses have been dropping by 1%, because normally the operating expense and lifting cost per unit normally have to be correlated to each other. I mean if the lifting costs have been dropped or increased by some percentage, operating expense normally will be highly correlated to lifting cost. But if you look at for this quarter, you may see the lifting cost per unit has been lower more than 5%, from 4.39% to 4.19%, mainly due to the increase in the production volume that bring down the cost per unit lower, for the cost per unit. But for the operating expense, you will see that it is not dropping by 5% as lifting cost. It's dropping only for 1%. That -- one of the reason is because of the -- it's offset by the stock adjustment from the oil projects like [IE] for Montara that have a stock variation adjustment. That's why the operating expenses have been dropping only for 1%. The drilling ratio, as I mentioned, that this quarter we haven't done any drilling, so is a 0 ratio at the moment.

 If you flip to the next page, I think this more or less summarize the key ratio that's reflecting our income -- our personal income of the income statement. You will see that our -- I would like you to focus on the financial ratio. You will see the EBITDA margin, we still can maintain at 70%, although we have the impairment loss for this quarter. That indicate that the impairment loss is a non-recurring item, then that does not affect any cash or cash flow. That's why our EBITDA margin is still very strong at 70%.

 If you flip to the Page 6, it's more on the balance sheet. I think most of you will not have any questions on the balance sheet itself, because we still maintain a very healthy balance sheet.

 In term of debt-to-equity, it is still low, as low as 0.25x, which is still in the framework that we have a financial policy to keep the debt-to-equity ratio not higher than 0.5x. So we still have a very low gearing ratio. And if you look at a net debt-to-equity, which is net in cash, you will see that we have cash more than debt at the moment. So that our net debt-to-equity is negative 0.1x.

 If you flip over to the next page, it's about the cash flow of this quarter. You will see that we have no problem on the cash balance. We still have a very strong cash at USD 4 billion and we keep always -- we normally say that this USD 4 billion will be -- supported our investment and any M&A that we're quite very happy for the moment.

 For the cash flow side, if I walk you through some of the box, you will see that our operating cash flow is still very strong at USD 1.6 billion. That's because of our performance in term of volume and price. So our operating cash flow is positive USD 1.6 billion, while we spent in the CapEx about USD 1 billion. So we reported free cash flow at positive USD 600 million. We do have some finance activities. We have a dividend payment for the last period, for the third quarter. We do have interest payments. So all together in finance activities we have paid out at about USD 572 million. That

 [make it out] that our cash generated for this quarter is about USD 30 million. And if you combine that with [giving out] cash, about USD 4 billion -- the ending balance is still more than USD 4 billion, as I say that, that's got to be reserved for any M&A that we have.

 The last page will give you the financial outlook. What we foresee that for the remaining of the year, we are still comfortable at the sales volume at 300 KBOED. The gas price will be a little bit adjusted from last quarter that we believe that in 2017 the gas price will be about USD 5.5. We have adjusted to USD 5.6 to be aligned with the increasing oil price at the moment. The unit cost, we still maintain at USD 29, although this quarter is quite low at USD 28, but apparently if you compare to activities that's going to happen in fourth quarter, we believe that the whole year unit cost still stood at USD 29.

 EBITDA margin, as I say, that for the core operating profit we still believe that we still have a very strong volumes coming in the fourth quarter, the gas price, the oil price, still ramping up. So our core operating will be very strong, and you will we see the EBITDA margin we think we can maintain at 70%.

 And that will be all for the summary of the financial results for this quarter. And hopefully everything -- it was -- meet your expectations for this quarter. I will open up for any Q&A if you may have.

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Questions and Answers
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 Mayank Maheshwari,  Morgan Stanley, Research Division - Research Analyst   [1]
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 This is Mayank. Ma'am, so a few questions actually. The first one was more related to your CapEx -- organic CapEx for the 9 months, obviously trending way below your previous guidance. What's your view on this, so how you think about the fourth quarter now?

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 Chanamas Sasnanand,  PTT Exploration and Production Public Company Limited - VP of Capital and IR   [2]
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 Okay. We believe that what we have guided you in the beginning of the year, we normally -- the utilization of the whole investment should be about 80%.

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 Mayank Maheshwari,  Morgan Stanley, Research Division - Research Analyst   [3]
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 Okay. So you think you will be able to meet that 80% of the numbers, because we are running closer to -- a bit lower than that even at the current run rate?

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 Chanamas Sasnanand,  PTT Exploration and Production Public Company Limited - VP of Capital and IR   [4]
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 Yes. I think we believe that (inaudible) than we are going to have for the rest of the year, we believe that about 80% will be a fair number for you to use in the model.

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 Mayank Maheshwari,  Morgan Stanley, Research Division - Research Analyst   [5]
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 Okay. Because most of the exploration activity is mostly (inaudible) assuming that this will be primarily focused on keeping the results flattish on existing [fleets].

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 Chanamas Sasnanand,  PTT Exploration and Production Public Company Limited - VP of Capital and IR   [6]
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 Yes, it's correct.

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 Mayank Maheshwari,  Morgan Stanley, Research Division - Research Analyst   [7]
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 Okay. And the second thing ma'am was in terms of -- you made a comment regarding your gas offtake on PTT. Can you give us a bit more details of how is the offtake now versus your DCQ on domestic as well --

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 Chanamas Sasnanand,  PTT Exploration and Production Public Company Limited - VP of Capital and IR   [8]
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 I think right now, currently the PTT have called up the gas at DCQ at the moment. In the first half we foresee that they have called up lower (inaudible) use a lot of the -- [carry] gas from some of our projects. But for the second half there was a positive trend and since the -- I think that the first half has a lot of spot LNG that PTT have already offtake. They have to use up all of that. For the second half all that offtake is already declining and we foresee that that's the reason why PTT have started to call up gas from the Gulf of Thailand as planned.

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 Mayank Maheshwari,  Morgan Stanley, Research Division - Research Analyst   [9]
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 Ma'am, I think the final thing was more related to -- I think you talked about in your MD&A regarding the reorganization as such within the company, in terms of responsibilities. So can you talk a bit about that?

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 Chanamas Sasnanand,  PTT Exploration and Production Public Company Limited - VP of Capital and IR   [10]
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 Yes. Actually, firstly, I think the Board of Directors have decided to revise the -- to improve the organization. There was a couple of main reasons. One is to cope up with the -- to have like a -- the President will be more focusing on the E&P (inaudible). So he will look every project in the E&P. And then CEO can be more concentrated in the strategy and will be more or less concentrated on the new business. So that's why the new organization, we have added another 1 unit, the new unit called the Business Transformation, and that's a unit will be devoted and have a mandate to find new business, to cope up with the changing in the E&P environment at the moment. So it's quite obvious that [Phongsthorn] who will be our President, will be more focusing on the operation in terms of exploration and production, try to increase or maintain production in Gulf of Thailand, try to push on the predevelopment project, look on the exploration, more concentrated in that way. And then (inaudible) who is going to be our CEO will be more concentrated in the (inaudible) and the new business. And that's more comply with our 3R strategy. If you remember that we said we'll focus at renew. So the reset will be handled by President, and refocus and renew will be handled by CEO.

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 Abhishek Nigam,  Nomura Securities Co. Ltd., Research Division - Associate   [11]
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 This is Abhishek from Nomura. Can I -- is there any guidance on 2018 volumes and gas prices?

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 Chanamas Sasnanand,  PTT Exploration and Production Public Company Limited - VP of Capital and IR   [12]
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 Okay. Based on our -- because right now we are in the budget process and I think we could announce the -- the 5-year plan by the end of the year. But, however, look at the situation at the moment and look at the existing portfolio at the moment, we still believe that 2018, we still aim for sustained production at the same level of 2017, although, normally, if we do not have any M&A -- this is based on that we don't have any project coming in.

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 Abhishek Nigam,  Nomura Securities Co. Ltd., Research Division - Associate   [13]
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 Okay. So at least 300,000 barrels per day and probably slightly more as well?

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 Chanamas Sasnanand,  PTT Exploration and Production Public Company Limited - VP of Capital and IR   [14]
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 We try to sustain at 300,000. If you look at our figures previously that we announced for 5 year, you will see that we've got to have a little bit dropping in 2018, compared to 2017. But with the aim of initiatives that we try to put in some several projects, like [SPA] and Montara, and as well as the Gulf of Thailand itself, we try to maintain the level at 300,000.

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 Abhishek Nigam,  Nomura Securities Co. Ltd., Research Division - Associate   [15]
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 Okay. So basically -- earlier you were saying maybe 2018 could drop slightly, but now you're saying at least 300,000 will be maintained, right?

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 Chanamas Sasnanand,  PTT Exploration and Production Public Company Limited - VP of Capital and IR   [16]
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 Yeah, we try to at the moment. It's subject to the budget process at the moment that some of our business units -- we have evaluated the return of each initiative as well. But this is our intention to try to sustain the production level.

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 Abhishek Nigam,  Nomura Securities Co. Ltd., Research Division - Associate   [17]
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 Yes. And can you give us a sense of where could the gas price be, assuming oil prices at, say, $60 per barrel in 2018, where will the gas price be, on an average?

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 Chanamas Sasnanand,  PTT Exploration and Production Public Company Limited - VP of Capital and IR   [18]
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 We expect that the gas price will be gradually ramping up at the moment. So most of the projects will have an increase in the gas price, because that's going to have a [left arm] on the oil price that has been increasing lately (inaudible). So you will see that the quarters are improved to [5.7] and this is going to maintain through the rest of the year. Going to be a little bit adjusted from Myanmar project, but not that significant. But 2018 will be a little bit increasing from the fourth quarter.

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 Abhishek Nigam,  Nomura Securities Co. Ltd., Research Division - Associate   [19]
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 Okay. So the next big leg of pricing comes in somewhere around March when you reset for most of the period, right?

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 Chanamas Sasnanand,  PTT Exploration and Production Public Company Limited - VP of Capital and IR   [20]
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 The fourth quarter, we already -- yes, this quarter will be reflected, yes. Most of the projects would be reset in October. And that's going to be used for the whole year, next year.

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 Abhishek Nigam,  Nomura Securities Co. Ltd., Research Division - Associate   [21]
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 Okay. Is it safe to assume something like, say, 6 next year, or is that...

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 Chanamas Sasnanand,  PTT Exploration and Production Public Company Limited - VP of Capital and IR   [22]
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 Yeah, it's fair to say that if the -- if assumption of the oil price is not that fluctuated.

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 Abhishek Nigam,  Nomura Securities Co. Ltd., Research Division - Associate   [23]
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 Okay. And can I check with you on the Mozambique project, so is it -- how does the impairment testing work? Does it happen in the fourth quarter every year or is it like done on a case to case basis?

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 Chanamas Sasnanand,  PTT Exploration and Production Public Company Limited - VP of Capital and IR   [24]
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 There are 2 ways to look that the impairment test. One is, if there is no trigger on the impairment test, we don't have to test quarterly. And secondly, if the project has a goodwill, is mandatory that you have to test the impairment every year.

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 Abhishek Nigam,  Nomura Securities Co. Ltd., Research Division - Associate   [25]
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 Sorry, if project has a good view, as in?

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 Chanamas Sasnanand,  PTT Exploration and Production Public Company Limited - VP of Capital and IR   [26]
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 Yes. If the project has a goodwill, same as Mozambique has a goodwill, so we need to do impairment -- to do the test annually, unless there is any change or have any trigger, we will go to assess the test according to the accounting standards. Likewise, like oil sands, because we have changed the development plan, that's why we have to do the impairment test before fourth quarter.

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 Abhishek Nigam,  Nomura Securities Co. Ltd., Research Division - Associate   [27]
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 Before the fourth quarter, okay. So I'm just trying to understand, if say, just assume that sometime next year you try to go ahead with Mozambique FID, will that require at that point of time an impairment testing or can you delay it till fourth quarter next year or how does it work?

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 Chanamas Sasnanand,  PTT Exploration and Production Public Company Limited - VP of Capital and IR   [28]
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 Yes, we have to do it, because once you would like to FID, you have to run the -- to see that any -- any feasibility commercially wise to sanction a project or not, so you have to evaluate the whole value of the project again before sanctioning the project.

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 Abhishek Nigam,  Nomura Securities Co. Ltd., Research Division - Associate   [29]
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 Okay. Can you just remind me, of the total goodwill on the balance sheet, how much will be attributable to the Mozambique project?

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 Chanamas Sasnanand,  PTT Exploration and Production Public Company Limited - VP of Capital and IR   [30]
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 Yes, the team will be shipping at the moment, will let you know.

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 Abhishek Nigam,  Nomura Securities Co. Ltd., Research Division - Associate   [31]
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 No worries. If I look at your fourth quarter volumes, 3Q was a good increase and then 4Q it's going up again. Is that driven by the MTJDA or is there something else that's driving it, from 3Q to 4Q --

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 Chanamas Sasnanand,  PTT Exploration and Production Public Company Limited - VP of Capital and IR   [32]
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 I think the fourth quarter will be more like a demand of gas. It's seasonal that normally in the fourth quarter there was a demand -- increasing in demand of gas and then because of the -- as I explained to Mayank that the -- we foresee that PTT have increasing their demand on the gas in Gulf of Thailand because of the spot LNG that they have imported lately, have [been refining] at the moment.

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 Abhishek Nigam,  Nomura Securities Co. Ltd., Research Division - Associate   [33]
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 Okay. And will it be possible to provide just a status update on the pre-development project if you have it now?

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 Chanamas Sasnanand,  PTT Exploration and Production Public Company Limited - VP of Capital and IR   [34]
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 Yeah, I do, but actually I would like to have our CEO do that. But just to touch a little bit on that I think the Mozambique (inaudible) still target at flat, which is Mozambique, we still target to FID soon, by next year, and Algeria Hassi Bir to hit up -- probably can sanction the project by next year. Another 1 project that will be coming up will be Southwest Vietnam, which we never mentioned to you all, because we have only 7% interest in Southwest Vietnam. It's a gas field, we hold it very long time ago. Usually Chevron is the operator, and now Chevron sold it to Petrovietnam. That one has a very quick progress at the moment, because of the gas price have been negotiated and concluded by the -- among the joint ventures. And hopefully that we can sanction the project by next year as well. So these are not a new development of our exploration project called Southwest Vietnam, in the Block 48 and Block 52, that's going to be the new additional 3 FID projects.

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 Abhishek Nigam,  Nomura Securities Co. Ltd., Research Division - Associate   [35]
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 Okay. And on the Mozambique project, so exactly where are we now, because I think Anadarko said there is a contractual agreement that they have finalized. But beyond that how much -- what additional steps are required for FID?

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 Chanamas Sasnanand,  PTT Exploration and Production Public Company Limited - VP of Capital and IR   [36]
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 I think there was 2 key main activities that need to complete before FID, and one is need each other as well. One is to complete the SPA to the level that the lender, because we got to do project finance. So they would have some substantial SPA to qualify, to make the lender happy to lend us the money. So there were 2 key things; the SPA have to complete at least about [8 million ton] in order to certify the project finance. And the second is about -- to conclude the project finance and then we have to go -- we are ready to go for the sanctioned project.

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 Abhishek Nigam,  Nomura Securities Co. Ltd., Research Division - Associate   [37]
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 So 8 million tons of SPA has to be completed for FID, right?

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 Chanamas Sasnanand,  PTT Exploration and Production Public Company Limited - VP of Capital and IR   [38]
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 Yes.

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 Abhishek Nigam,  Nomura Securities Co. Ltd., Research Division - Associate   [39]
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 And -- because from what I remember there was a substantial amount of, I think HOA, but not SPA, right, or am I --

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 Chanamas Sasnanand,  PTT Exploration and Production Public Company Limited - VP of Capital and IR   [40]
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 I think we have almost like 80%, but we complete the 8 million tons on the HOA. But the thing that HOA need turn to be the SPA. And -- but right now we have a lot of significant progress on the PTT side. You may be aware of, the PTT have offtake about [2.6] that almost 25% to 30% of 8 million tons already. And normally in a LNG business, they need some, what you call it, foundation buyer that have fully committed on some of the long-term LNG and then follow-on will be coming soon. So after we conclude the PTT, hopefully that the marketing chief of Anadarko will be approaching to the next potential buyer and that should be concluded quite quickly.

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 Abhishek Nigam,  Nomura Securities Co. Ltd., Research Division - Associate   [41]
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 So SPA right now is what, 80% done or is it like 50% from...

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 Chanamas Sasnanand,  PTT Exploration and Production Public Company Limited - VP of Capital and IR   [42]
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 HOA -- for the Heads of Agreement, they have done for 8 million ton, but we need to turn HOA to the SPA. And at this stage there was -- no SPA have been signed yet, only for PTT that have very significant progress, because the board of PTT already grant approvals on the SPA, but they need to get approval from the government level.

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 Abhishek Nigam,  Nomura Securities Co. Ltd., Research Division - Associate   [43]
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 Okay, got it. Okay, can I check with you -- sorry on -- this is really the last question that I have now. How does that the stronger Thai Baht impact you and particularly in the tax rate?

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 Chanamas Sasnanand,  PTT Exploration and Production Public Company Limited - VP of Capital and IR   [44]
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 Okay. As we (inaudible) that every variation of THB 1 (inaudible) increase or decrease THB 1 against U.S. dollar that's going to impact (inaudible) roughly about USD 90 million, about USD 90 million to USD 100 million. So if Thai Baht is appreciated we've got tax savings.

 If Thai Baht depreciation it's going we are going to get a tax spend.

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 Abhishek Nigam,  Nomura Securities Co. Ltd., Research Division - Associate   [45]
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 Okay. So if THB appreciates the (inaudible). Got it. I think that's all that I have. Thank you so much.

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 Chanamas Sasnanand,  PTT Exploration and Production Public Company Limited - VP of Capital and IR   [46]
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 If there is any other question?

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 Mayank Maheshwari,  Morgan Stanley, Research Division - Research Analyst   [47]
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 Just to follow up (inaudible) In terms of our outlook on OpEx, do you think you have more room to reduce the OpEx incrementally on a per barrel basis, excluding DD&A?

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 Chanamas Sasnanand,  PTT Exploration and Production Public Company Limited - VP of Capital and IR   [48]
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 In the utilization of OpEx?

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 Mayank Maheshwari,  Morgan Stanley, Research Division - Research Analyst   [49]
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 No, in terms of on a per barrel basis, do you think there is [more room] for you going ahead in terms of lowering your (inaudible) those may be old ones, which are expiring and you are planning new ones, anything like that?

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 Chanamas Sasnanand,  PTT Exploration and Production Public Company Limited - VP of Capital and IR   [50]
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 I think rig rate is a CapEx, right.

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 Mayank Maheshwari,  Morgan Stanley, Research Division - Research Analyst   [51]
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 I was more looking more from a (inaudible).

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 Chanamas Sasnanand,  PTT Exploration and Production Public Company Limited - VP of Capital and IR   [52]
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 In (inaudible) I think the (inaudible) in the future is quite challenging for the company to (inaudible) comparing to the previous, we could step up to 30% to 40%. And at the moment oil price have been increasing, so we do not expect that we are going to have any improvement, significant on the [cost] side. That's why we say that (inaudible) to maintain the cost -- unit cost at [USD 29]. So is there any questions? Okay, if there is no more questions -- by the way there is 1 information that we're going to have the Analyst Meeting on November (inaudible) and then -- November 6, and then we are going to have (inaudible) in the website, including the webcast. You can follow up Analyst Meeting that covers the all (inaudible) talking about the strategy and the way forward on FID. And (inaudible) our team gets the goodwill for Mozambique already. Let me answer here, it's roughly about -- roughly USD 500 million, plus or minus. It's about USD 570 million, for Mozambique -- USD 570 million. You can look at the -- in the financial statement. Okay, thank you.




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