SET-listed PTT Exploration and Production Plc (PTTEP) has made further expenditure cuts in a bid to reduce production costs to below US$40 a barrel.
This is slightly below the previous average production cost of $42.22 a barrel set early this year, down from $43.60 last year, chief financial officer Penchan Charikasem said.
Following the collapse of oil prices, which have fallen by more than half, the company made large expenditure cuts to lower the average to $40.20 as of Sept 30.
"We're going to reduce the average to below $40 for next year," Ms Penchan said.
PTT Group last week forecast Dubai oil prices would stay within a range of $53-56 a barrel next year.
Since natural gas accounts for 70% of PTTEP's sales volume and liquid gas 30%, the average liquid weighted with gas was as high as $63.38 a barrel last year.
It was finally slashed to $47.22 at the end of September.
The company estimates its average sales price next year will stay within a range of $45-46 a barrel.
In May PTTEP made a first cut of $500 million, bringing down this year's capital expenditure budget to $2.5 billion.
Another $500 million has been trimmed this month, dropping the budget to $2 billion.
The company this year has improved its drilling performance, optimised well operations and logistics and renegotiated rig contracts by 20%.
The company has also cut its operating expenses by 10-15% from an average of $6.95 a barrel last year by optimising maintenance and inventory management.
For general administration, it has cut expenses by 20-25% from last year's $3.10 a barrel by streamlining the working process and tightening expenditure.
By the year-end, PTTEP's Bir Seba oil block in Algeria will have first oil, with average production of 20,000 barrels per day.
"However, reducing production costs does not mean compromising safety standards, which remain a high priority," Ms Penchan said.
PTTEP set the company's sales volume for the rest of this year at 335,000 barrels of oil equivalent per day, up 3% from 328,000 boed at the end of September.
It plans to raise the volume by 3% next year.
Other new oil and gas resources in the pipeline include the Ubon gas field in the Gulf of Thailand, Hassi Bir Rekaiz in Algeria and Mozambique’s Rovuma A1.
Ms Penchan said PTTEP would make a final decision on its Canadian oil-sand project.
The company paid Norway's Statoil ASA $2.3 billion in 2011 for a 40% stake in the project, but it has been delayed since oil prices collapsed.
However, it is still looking to acquire other oil and gas resources, as it has operating cash of $3 billion.
PTTEP shares closed yesterday on the SET at 72 baht, up 1.25 baht, in trade worth 311 million baht.