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Introduction & Market Context
PTT Exploration (OTC:PEXNY) and Production PCL (PTTEP) presented its second quarter 2025 financial results on July 29, 2025, revealing significant challenges despite ongoing strategic initiatives. The company’s stock rose 5% following the presentation, closing at $4.60, suggesting investors found some positive elements amid declining profitability metrics.
PTTEP continues to navigate a complex energy landscape, with crude oil prices projected at $65-75 per barrel for FY2025 and LNG prices expected to average $12-14 per MMBTU. The company highlighted several market factors affecting its performance, including global economic conditions, U.S. tariffs, geopolitical tensions, OPEC+ oil production policy, and non-OPEC+ production levels.
Quarterly Performance Highlights
PTTEP reported a net profit of $408 million for Q2 2025, representing a substantial 38% year-over-year decline from $653 million in Q2 2024 and a 16% quarter-over-quarter decrease from $488 million in Q1 2025. This downward trend in profitability comes despite the company maintaining a strong EBITDA margin of 72%.
As shown in the following financial results chart:
Sales volume remained relatively stable, with the company’s weighted average selling price at $44.01 per barrel of oil equivalent (BOE) for Q2 2025. The revenue mix continues to be dominated by oil at 56%, with liquid products accounting for the remaining 44%.
The detailed breakdown of volume and price metrics reveals:
A concerning trend for PTTEP is the steady increase in unit costs, which rose to $31.1 per BOE in Q2 2025, up from $30.77 in Q1 2025 and $29.58 in 2024. This cost pressure appears to be a significant factor in the company’s declining profitability.
The unit cost breakdown shows the following components:
Despite profitability challenges, PTTEP maintains a solid financial position with $3.48 billion in cash as of June 2025, though this represents a decrease from $3.94 billion at the end of 2024. The company’s interest-bearing debt to equity ratio remains stable at 0.24, with an average cost of debt at 3.94% per annum and an average time to maturity of 12.6 years.
The cash flow and financial position metrics are illustrated here:
Strategic Initiatives
PTTEP continues to focus on ensuring Thailand’s energy security while pursuing international growth opportunities. The company’s strategy addresses the anticipated decline of existing fields post-2030 through various initiatives, including maintaining existing gas production, driving extensions for supply continuity, accelerating new gas supply from potential sources, and optimizing existing assets.
The company’s energy security strategy is outlined in this comprehensive overview:
A significant strategic move during the quarter was PTTEP’s acquisition of a 50% participating interest in Block A-18 MTJDA for $450 million. This investment aligns with the company’s energy security goals by contributing 300 MMSCFD of gas supply to Thailand and increasing its resource base by approximately 2 TCF.
The details of this strategic acquisition are presented here:
PTTEP is also advancing several other major projects across its global portfolio. These include increasing the daily contract quantity (DCQ) for Arthit from 280 to 330 MMSCFD effective June 2025, extending the Exploration and Production Sharing Agreement (EPSA) for Oman Block 53 until 2050, and being awarded the Reggane II block in Algeria’s 2024 Bid Round in partnership with Eni.
The company’s major project developments across multiple regions are summarized in this slide:
Financial Outlook
Looking ahead, PTTEP projects sales volume for Q3 2025 at approximately 505 KBOED and 505-510 KBOED for the full year 2025. Gas prices are expected to remain stable at around $5.8 per MMBTU for both Q3 and FY 2025. The company anticipates unit costs of approximately $30 per BOE and expects to maintain a strong EBITDA margin of 70-75%.
PTTEP’s financial outlook and credit ratings are detailed here:
The company has announced its dividend payment schedule for the first half of 2025, with an XD date of August 8, 2025, a record date of August 13, 2025, and a payment date of August 22, 2025. PTTEP plans to distribute 57% of its net profit as dividends in 2025, representing an annualized yield of approximately 8%.
Forward-Looking Statements
PTTEP’s strategy continues to focus on three key pillars: driving value, decarbonizing operations, and diversifying its portfolio. The company aims to ensure Thailand’s energy security while expanding its international presence, particularly in gas projects and LNG opportunities.
Cost efficiency remains a priority, with the Gulf of Thailand (GoT) SAVE program targeting improvements in drilling efficiency and wellhead platform reuse. The company aspires to improve drilling days per well by 10% and achieve 100% wellhead platform reuse.
Despite the challenging financial results in Q2 2025, PTTEP maintains a positive long-term outlook supported by its strategic acquisitions, project developments, and focus on operational efficiency. However, the rising unit costs and declining profitability will require careful management to ensure sustainable growth in an increasingly competitive and volatile energy market.
Full presentation:
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