PTTEP acquiring 33.8% stake in Apico amid Asian expansion
SET-listed oil and gas drilling firm PTT Exploration and Production Plc (PTTEP) is acquiring a 33.8% stake in Apico LLC, a local oil and gas explorer and producer, in a transaction worth US$64 million.
PTTEP sent a letter to the Stock Exchange of Thailand reporting that a subsidiary, PTTEP SP Ltd, signed a share purchase agreement with two sellers, Tatex Thailand LLC and Tatex Thailand II LLC.
The transaction is expected to conclude by June.
Apico holds a 35% participating interest in the EU1 and E5N petroleum blocks for the onshore Sinphuhorm project and a 100% participating interest in the L15/43 and L27/43 petroleum blocks.
All projects are located in the Northeast.
PTTEP is currently the operator with a 55% interest in the Sinphuhorm project. After the completion of the transaction, PTTEP’s stake both direct and indirect in this project will increase to 66.8%.
In 2018, the Sinphuhorm project had an average sales volume of natural gas of 79 million cubic feet per day (12,927 barrels of oil equivalent per day) and an average condensate sales volume of 246 barrels per day.
Phongsthorn Thavisin, PTTEP’s president and chief executive, said the acquisition fits PTTEP’s growth strategy to expand its investment in Thailand and Southeast Asia, where PTTEP has expertise to increase petroleum reserves and generate return on investment to the company, as well as provide a reliable energy supply for the country.
“The acquisition deal marks a fast expansion for new oil and gas resources and both new investment and asset acquisition are potential enough since global oil prices are becoming more stable in 2019,” Mr Phongsthorn said.
He said Southeast Asia and the Middle East are the main regions for new oil and gas resources in line with PTTEP’s policy.
Meanwhile, PTTEP is also accelerating the exploration and development of existing oil and gas blocks on hand.
When global oil prices decline and become stabler, these factors prompt many exploration and production companies to expand their businesses and acquire and change their ownership.
Last year, PTTEP took part in an auction for oil and gas resources in the United Arab Emirates and Malaysia, and it is looking for business opportunities in Oman after failed bids in the past.
PTTEP is awaiting a clearer policy from the Indonesian government on oil and gas auctions, with several concessions due to expire over the next two years.
PTTEP expects global oil prices in 2019 to average $70 per barrel, up from $60 in 2018.
The company predicts average oil and gas sales volume in 2019 to stand at 309-318 kilobarrels of oil equivalent per day and to maintain production unit cost per barrel at an average of $32.