PTT Exploration and Production (PTTEP) PTTE.BK is looking to buy one or two oil and gas assets worldwide this year and an executive of Thailand's second-biggest listed firm said he was optimistic about sales volume and prices.
"We remain focused on high-quality assets and no matter whether we win or lose, our growth objective is more geared to foreign than domestic markets," Executive Vice-President Asdakorn Limpiti said in an interview for the Reuters Global Energy Summit in Bangkok.
Last week, the upstream flagship of energy giant PTT PTT.BK lost a bid with China's CNOOC and Sinopec, parent of Asia's top refiner Sinopec Corp among others, for a stake in Norwegian oil firm Statoil's offshore oilfield in Brazil.
Sinochem Corp won the bidding for the $3.07 billion stake, China's second major oil and gas deal in Latin America since March.
Asdakorn, who oversees strategy and business development, expected PTTEP to acquire assets in Brazil and other countries in South America, Africa and the Commonwealth of Independent States (CIS) to add to its core exploration locations in Myanmar, Indonesia and Australia.
"We've been working closely with Statoil about the potential to do business together, whether in Brazil or other places," he said, adding PTTEP's low net-debt-to-equity ratio of 0.46 meant it had enough financial leeway to pursue deals.
"Assets as big as 200 million barrels or more are hard to find these days, but I think we're looking for at least a reserve of 100 million barrels," he said, expecting results in the second quarter.
PTTEP, which ranks among Asia's top 10 explorers, is looking to raise 47 billion baht ($1.45 billion) in new funds this year, all in the domestic market, with the proceeds for business expansion and overseas acquisitions, Asdakorn said.
PTTEP, the sixth-largest listed oil and gas explorer by market value in Asia Pacific, is involved in 44 exploration and production projects in 13 countries. It recently won a bid for four petroleum blocks in Indonesia.
Nineteen analysts polled by Thomson Reuters I/B/E/S expected PTTEP's 2010 net profit to rise 65 percent to 36.5 billion baht. Revenue was seen up 15 percent from a year earlier.
"Higher sales volume and a strong price outlook, supported by a rise in oil prices, will help us see higher net profit and revenue in the second quarter," he said.
PTTEP beat market expectations last month when it posted an 82 percent surge in quarterly profit of 10.5 billion baht ($323 million) on higher petroleum sales and rising oil prices.
Average sales volume this year would beat its target of 253,796 barrels of oil equivalent per day (boepd), after first-quarter volume rose 18 percent, helped mainly by the commissioning of the Malaysian-Thai Joint Development Area in February.
New output from Vietnam 16-1 and delayed Australia Montara fields are on track to come online next year with two blocks in Algeria and Myanmar's M-9 gas field operational in 2012 and 2013 respectively, Asdakorn said.
Analysts said the possibility of M&A deals, increased exploration activities and the extension of production lifespans of existing fields would present upside potential for the company's production outlook.
PTTEP's long-term production target is expected to reach 900,000 boepd in 2020.
Domestic gas demand this year is projected to rise 10 percent from 3,597 million cubic feet per day (mmcfd) in 2009 because of the economic recovery plus hot weather and a low base effect. Demand in the January-March period was robust, up 15.7 percent at 3,832 mmcfd.
Shares in PTTEP, valued at $15 billion, rose 1.1 percent to 143.50 baht on Thursday, while the overall market .SETI was 1.3 percent higher at 0922 GMT.
The stock has fallen 2.4 percent this year versus a 0.6 percent gain in the benchmark index and a 0.8 percent drop in energy sub-index .SETEN.
"PTTEP looks cheap at 13.4 times 2010 P/E versus global E&P firms' 17.7 times," said BNP Paribas-Thanachart analyst Supanna Suwankird. "We don't expect any more bad news from Montara and operations look set to resume in 2012."