TRIS Rating Affirms Company & Senior Debt Ratings of “PTTEP” at “AAA”and Subordinated Capital Debt at “AA”, with “Stable” Outlook

TRIS Rating Co., Ltd. has confirmed the company rating of PTT Exploration and Production PLC (PTTEP) and the ratings of PTTEP’s senior debentures at “AAA”. TRIS Rating has also confirmed the rating of “AA” for PTTEP’s subordinated capital debentures with “stable” outlook. The rating confirmation follows PTTEP’s announcement that its offer for Cove Energy PLC (Cove) is unconditional as to acceptances and its capital increase plan. The ratings reflect the company’s leading position in the petroleum exploration and production (E&P) industry in Thailand, solid asset base, the support received as the E&P arm of the Thai government, and healthy financial profile. The ratings also take into consideration the execution risk connected with its overseas operations. The “stable” outlook reflects TRIS Rating’s expectation that PTTEP will be able to maintain its operating performance amid volatile and challenging environments. With the company’s financial discipline and conservative financial policies, PTTEP’s is expected to pursue its growth strategy without weakening its financial strengths.

TRIS Rating reported that on 31 July 2012, PTTEP announced that 91.4% of Cove shareholders had accepted to PTTEP’s offer at 240 pence per share. The total acquisition cost for 100% acquisition is expected in a range between GBP1.2-GBP1.4 billion (equivalent to US$1.9-US$2.3 billion), including capital gain tax and other transaction-related fees.

TRIS Rating said, Cove is a listed company trading on the Alternative Investment Market of the London Stock Exchange. The primary asset of Cove is an 8.5% interest in Mozambique Rovuma Offshore Area 1, with estimated gas resources of up to 60 trillion cubic feet (tcf.), according to the 11 June 2012 announcement of a gas discovery at the Atum exploration well. This project is in the exploration phase and is expected to produce liquefied natural gas (LNG) in 2018.

This acquisition will initially be financed by a bridge loan of GBP950 million and PTTEP’s cash on hand. PTTEP plans to raise Bt98,000 million (equivalent to US$3,000 million) in new capital in the fourth quarter of 2012. The capital increase is subject to PTTEP shareholder approval, at a meeting to be held on 24 August 2012. However, PTTEP’s major shareholder, PTT PLC (PTT), has committed to support PTTEP’s capital increase plan and maintain its majority stake in PTTEP of no less than 64.75%.

With its recapitalization plan, PTTEP’s capital structure will improve. The debt-to-capitalization ratio, which will be approximately 44% should the Cove acquisition take place, will fall to approximately 30% by the end of 2012, after the capital increase.

The acquisition of Cove is consistent with PTTEP’s strategy of leveraging the LNG value chain of the PTT Group. The acquisition will also support PTTEP’s plan to expand reserves in East Africa.

PTTEP’s current capital expenditure plan is totaling of US$11,914 million during 2012 to 2016. This level of capital investment will only support a sales target of 330,000 barrels of oil equivalent per day (boed) during 2013-2016, from a current volume of 263,441 boed in the second quarter of 2012. The acquisition of Cove is part of PTTEP’s aggressive target to increase its sales volume to 900,000 boed by 2020, said TRIS Rating. — End

Company Rating: Affirmed at AAA Issue Ratings: PTTEP135A: Bt5,000 million senior debentures due 2013 Affirmed at AAA PTTEP145A: Bt11,700 million senior debentures due 2014 Affirmed at AAA PTEP183A: Bt2,500 million senior debentures due 2018 Affirmed at AAA PTTEP195A: Bt5,000 million senior debentures due 2019 Affirmed at AAA PTTEP12PA: Bt5,000 million subordinated capital debentures Affirmed at AA Rating Outlook: Stable TRIS Rating Co., Ltd./www.trisrating.com Contact: [email protected], Tel: 0-2231-3011 ext 500/Silom Complex Building, 24th Floor, 191 Silom Road, Bangkok 10500, Thailand Copyright 2012, TRIS Rating Co., Ltd. All rights reserved. Any unauthorized use, disclosure, copying, republication, further transmission, dissemination, redistribution or storing for subsequent use for any purpose, in whole or in part, in any form or manner or by any means whatsoever, by any person, of the credit rating reports or information is prohibited. The credit rating is not a statement of fact or a recommendation to buy, sell or hold any debt instruments. It is an expression of opinion regarding credit risks for that instrument or particular company. The opinion expressed in the credit rating does not represent investment or other advice and should therefore not be construed as such. Any rating and information contained in any report written or published by TRIS Rating has been prepared without taking into account any recipient’s particular financial needs, circumstances, knowledge and objectives. Therefore, a recipient should assess the appropriateness of such information before making an investment decision based on this information. Information used for the rating has been obtained by TRIS Rating from the company and other sources believed to be reliable. Therefore, TRIS Rating does not guarantee the accuracy, adequacy, or completeness of any such information and will accept no liability for any loss or damage arising from any inaccuracy, inadequacy or incompleteness. Also, TRIS Rating is not responsible for any errors or omissions, the result obtained from, or any actions taken in reliance upon such information. All methodologies used can be found at http://www.trisrating.com/en/rating_information/rating_criteria.html.