PTT Exploration and Production Public Company Limited (SET: PTTEP) reported a net profit of 376 MMUSD for the first quarter of 2026, marking a 23% decline from the 488 MMUSD recorded in the same period last year.
This bottom-line decrease occurred despite a strong showing in normal operations, where profit actually increased by 138 MMUSD year-on-year. The primary catalyst behind the profit slump was a 250 MMUSD surge in non-operating losses, primarily attributed to oil price hedging contracts. These losses were largely accounting-based, resulting from mark-to-market valuations as forward oil prices trended upward.
On the revenue and production front, PTTEP saw its average sales volume jump by 14% to 553,369 barrels of oil equivalent per day (BOED), up from 484,218 BOED in 1Q25. This substantial growth was bolstered by higher crude oil sales from the G1/61 project and the full-quarter recognition of new assets acquired in 2025, including the MTJDA A18, Algeria Touat, and Malaysia SK408 projects. The average selling price also saw a modest increase of 1% to 46.02 USD/BOE, tracking the rise in market prices for crude oil and condensate.
The company also demonstrated effective expense management, successfully reducing its unit cost by 9% to 27.97 USD/BOE. This improvement was driven by lower operating expenses from maintenance activities in the Gulf of Thailand and a reduction in depreciation following a downward revision of estimated decommissioning costs.
Externally, the first quarter was shaped by the average Dubai crude price, which rose significantly to 87.87 USD/barrel from 76.94 USD/barrel a year earlier. Escalating geopolitical tensions in the Middle East, particularly involving the U.S., Israel, and Iran, along with concerns over the potential closure of the Strait of Hormuz, tightened global supply and spiked the geopolitical risk premium. Despite this volatility, PTTEP maintained a robust financial position with an interest-bearing debt-to-equity ratio of 0.24 times.
