Page 1

PTT Exploration and Production Public Company Limited Management Discussion and Analysis ( MD & A ) for the first quarter of 2021 Executive Summary PTTEP In the first quarter of 2021 , crude oil price had increased to the 60 USD / barrel level from growing confidence on demand recovery as that lockdowns and international travel restrictions are expected to be relaxed given more vaccines are being administered globally and economic stimulus measures are being launched in many countries . Recovery in crude oil demand is expected in Q2 / 2021 and speed up further in Q3 / 2021 , while crude oil supply would still be under control by OPEC + who has maintained strong commitment towards its compliance and production cut agreement . Nevertheless , oil prices remain under pressure from concerns over COVID - 19 new variants outbreak and the delay in vaccine roll out that may force countries to re - implement lockdown measures . PTTEP continues to operate under the EXPAND - EXECUTE strategy with achievements in Q1 / 2021 including the successful appraisal drilling result in Sarawak SK410B that indicated a larger gas reservoir than previously estimate confirming company's largest discovery ; and new petroleum discoveries in Sarawak SK417 and Sarawak SK405B projects located in offshore Sarawak , Malaysia with plans for additional well drilling to further evaluate upside potential . For the Block H Project , we , together with joint venter partners , had announced the first gas production for delivering to PETRONAS Floating Liquefied Natural Gas - 2 ( PFLNG2 ) . The production will ramp up to 270 MMSCFD as targeted . With regards to the recently announced acquisition of 20 % interest in Block 61 in Sultanate of Oman , the conditions precedent to Completion prescribed in the Sale and Purchase Agreement ( SPA ) was completed . Additional sales volume from this newly acquired asset will be recognized since 23 March 2021. These achievements as aforementioned will not only provide the immediate revenue stream , production , and reserves , but also strengthen PTTEP's position in Southeast Asia and the Middle East , paving a strong path for future expansion in these regions . In terms of operations transition for G1 / 61 Project ( Erawan field ) , there is no clarity on site access for wellhead platforms and sealines installation at this stage as the negotiation between the current concessionaire and the government has yet to come to an agreement . This has started to affect our plan for gas production under the new PSC . The impact is currently being evaluated with remediation plan to compensate potential volume shortfall from other projects . We continuously and closely coordinate with the government to find minimal impact solution , putting the first priority on Thailand's energy security . For G2 / 61 Project ( Bongkot field ) , we have good progress in transition as planned . In Q1 / 2021 , PTTEP reported net income of 376 MMUSD , increased from 81 MMUSD reported in the previous quarter . This is mainly driven by higher selling prices following rising trend of global crude oil prices . Moreover , PTTEP was able to reduce unit cost from 31.09 USD / barrel of oil equivalent ( BOE ) to 27.96 USD / BOE . Besides , in this quarter , there was a recognition of extraordinary net income , Gain from a bargain purchase , arising from the acquisition of Oman Block 61 project partially offset with loss from oil price hedging . PTTEP , therefore , reported cash flow from operations of 803 MMUSD with the EBITDA margin at 74 % . As of Q1 / 2021 , PTTEP reported total assets of 23,302 MMUSD , of which 1,795 MMUSD was cash and short - term investments , while total liabilities were reported at 11,151 MMUSD , of which 3,895 MMUSD was interest - bearing debt . Total shareholders ' equity ended at 12,151 MMUSD with debt - to - equity ratio at 0.32 , reflecting strong and healthy financial structure . Table of key financial results Q4 2020 Q 1 2021 Q 1 2020 % Inc. ( Dec. ) % ( Unit : Million US Dollar ) Total Revenue QoQ In c . ΥΟΥ 1,348 1,779 1,771 32 0 Sales Revenue 1,292 1,391 1,482 8 ( 6 ) EBITDA 829 1,041 1,082 26 ( 4 ) Profit ( loss ) for the period 81 376 275 364 37 Basic earnings ( loss ) per share ( Unit : US Dollar ) 0.02 0.09 0.07 374 35 Profit ( loss ) from normal operation 168 282 290 68 ( 3 ) Profit ( loss ) from non - recurring items ( 87 ) 94 ( 15 ) 208 > 100 * Exclude partial write - off of exploration and evaluation assets of the exploration project in Brazil Executive Summary Economic Outlook Financial Performance Operational Highlights Company Strategy Business Outlook Page | 1