7. Capital Structure

As of December 31, 2009, PTTEP’s capital structure consisted of Baht
71,770 million interest-bearing liabilities and Baht 143,001 million
shareholders’ equities. The liabilities to shareholders’ equities ratio
was 0.50 times. Details of the capital structure are as follows:

7.1 Securities

7.1.1 Capital Stock

PTTEP currently has a registered share of Baht 3,322 million consisting
of 3,322 million ordinary shares at the par value of 1 Baht per share.

In 2009, the Company’s registered paid-up capital was increased by Baht
5.48 million (5.48 million shares at Baht 1 each), from the exercise of
warrants to purchase the Company’s common shares by the management and
employees according to the 2002-2006 Employee Stock Ownership Plan or
ESOP (please refer to details of warrants in section 7.1.3). Therefore,
at December 31, 2009, the Company’s registered paid-up capital was at
Baht 3,312.56 million (3,312.56 million ordinary shares, at a par value
of Baht 1).

7.1.2 Bonds and Short-Term Commercial Papers

PTTEP maintains the company’s Short-term Financing Program (“PF”) which
involves the company’s monthly issuance of Bills of Exchange (B/Es) via
Public Offering to institutional and high net-worth investors. B/Es are
to be issued monthly on a revolving basis with a total revolving credit
of up to Baht 30,000 million which was approved by the Resolution of the
Board of Directors’ meeting in February 2009. As of December 31, 2009
the outstanding face value of B/Es was Baht 1,000 million with the
weighted average discounted rate of 1.162%.

On May 29, 2009, PTTEP issued and offered the 40,000 million unsecured,
unsubordinated Baht Debentures which comprised 4 tranches. Two tranches
were sold to retail investors: 3 years in the amount of Baht 18,300
million at 3.25% per annum and 5 years in the amount of Baht 11,700
Million at 4.00% per annum. The other two tranches were sold to
institutional investors: 4 years in an amount of Baht 5,000 million with
an interest rate fixed at 3.00% per annum for the first two years;
thereafter, investor can switch to either fixed rate at 4.00% per annum
or floating rate at 6MTHBFIX + 1.25% (CAP 6.00% and Floor 3.25%) per
annum for the last two years, and 10 years in the amount of Baht 5,000
million at 4.80% per annum. The debentures are rated at AAA by TRIS
Rating which is the highest rating possible.

As of 31^(st) December 2009, PTTEP has Baht 58,500 million (face value)
in Baht Bonds outstanding and Baht 1,000 million (Face value) in B/Es
outstanding; therefore, PTTEP has total debt to equity ratio was 0.50
times, and the long term debt (including current portion of long-term
loan) to equity ratio was 0.49 times.

Details of bonds and Bills of Exchange (B/Es) as of December 31, 2009
are as follows:

+------------+-------------+-----------+----------+-------------------+
| Debt       | Issue Size  | Rate per  | Maturity | Other Details     |
| Security   |             | annum     |          |                   |
+------------+-------------+-----------+----------+-------------------+
| An         | Baht 2,500  | 4.625%    | 15       | PTTEP was the     |
| unsecured  | million     | per       | years,   | issuer. Swapped   |
| unsu       |             | annum,    | due in   | into USD 60.83    |
| bordinated | (2.5        | semi      | March    | million at an     |
| Baht Bond  | million     | -annually | 27, 2018 | interest rate of  |
| issued in  | units at a  |           |          | 3.85% per annum   |
| 2003*      | face value  |           |          | in 2005, then     |
|            | of Baht     |           |          | unwinded swap to  |
|            | 1,000 per   |           |          | Baht 2,500 MM at  |
|            | unit.)      |           |          | 3.30% per annum   |
|            |             |           |          | in 2007           |
+------------+-------------+-----------+----------+-------------------+
| Unsecured, | Baht 3,500  | 4.88% per | 3 years, | PTTEP was the     |
| unsu       | million     | annum,    | due 2010 | issuer.           |
| bordinated |             | semi      |          |                   |
| Baht Bond  | (3.5        | -annually |          |                   |
| issued     | million     |           |          |                   |
| February   | units at a  |           |          |                   |
| 2007       | face value  |           |          |                   |
|            | of Baht     |           |          |                   |
|            | 1,000 per   |           |          |                   |
|            | unit.)      |           |          |                   |
+------------+-------------+-----------+----------+-------------------+
| Unsecured, | Baht 6,000  | 3.60% per | 3 years, | PTTEP was the     |
| unsu       | million     | annum,    | due in   | issuer.           |
| bordinated |             | semi      | 2010     |                   |
| Baht Bond  | (6 million  | -annually |          | Swapped into      |
| issued     | units at a  |           |          | interest from     |
| June 2007  | face value  |           |          | fixed 3.60% to    |
| -Baht      | of Baht     |           |          | floating 6MFDR* + |
| 12,500     | 1,000 per   |           |          | 0.99% in          |
| million    | unit.)      |           |          | September 2007    |
| issued in  |             |           |          |                   |
| total      |             |           |          |                   |
+------------+-------------+-----------+----------+-------------------+
|            | Baht 3,500  | 3.91% per | 5 years, | PTTEP was the     |
|            | million     | annum,    | due in   | issuer.           |
|            |             | semi      | 2012     |                   |
|            | (3.5        | -annually |          |                   |
|            | million     |           |          |                   |
|            | units at a  |           |          |                   |
|            | face value  |           |          |                   |
|            | of Baht     |           |          |                   |
|            | 1,000 per   |           |          |                   |
|            | unit.)      |           |          |                   |
+------------+-------------+-----------+----------+-------------------+
|            | Baht 3,000  | 5.13% per | 15       | PTTEP was the     |
|            | million     | annum,    | years,   | issuer.           |
|            |             | semi      | due in   |                   |
|            | (3 million  | -annually | 2022.    |                   |
|            | units at a  |           | Issuer   |                   |
|            | face value  |           | has an   |                   |
|            | of Baht     |           | option   |                   |
|            | 1,000 per   |           | for      |                   |
|            | unit.)      |           | early    |                   |
|            |             |           | re       |                   |
|            |             |           | demption |                   |
|            |             |           | in 2012  |                   |
+------------+-------------+-----------+----------+-------------------+
| Unsecured, | Baht 18,300 | 3.25% per | 3 years, | PTTEP was the     |
| unsu       | million     | annum,    | due in   | issuer            |
| bordinated |             | quarterly | 2012     |                   |
| Baht Bond  | (18.3       |           |          |                   |
| issued May | million     |           |          |                   |
| 2009 -Baht | units at a  |           |          |                   |
| 40,000     | face value  |           |          |                   |
| million    | of Baht     |           |          |                   |
| issued in  | 1,000 per   |           |          |                   |
| total      | unit.)      |           |          |                   |
+------------+-------------+-----------+----------+-------------------+
|            | Baht 5,000  | Years     | 4 years, | PTTEP was the     |
|            | million     | 1-2:      | due in   | issuer            |
|            |             | 3.00% per | 2013     |                   |
|            | (5 million  | annum     |          |                   |
|            | units at a  |           |          |                   |
|            | face value  | Years     |          |                   |
|            | of Baht     | 3-4:      |          |                   |
|            | 1,000 per   | Fixed     |          |                   |
|            | unit.)      | 4.00%     |          |                   |
|            |             |           |          |                   |
|            |             | or THB    |          |                   |
|            |             | FIX +     |          |                   |
|            |             | 1.25%     |          |                   |
|            |             | with      |          |                   |
|            |             |           |          |                   |
|            |             | Cap of    |          |                   |
|            |             | 6.0% and  |          |                   |
|            |             | Floor of  |          |                   |
|            |             | 3.25%,    |          |                   |
|            |             | semi      |          |                   |
|            |             | -annually |          |                   |
+------------+-------------+-----------+----------+-------------------+
|            | Baht 11,700 | 4.00% per | 5 years, | PTTEP was the     |
|            | million     | annum,    | due in   | issuer            |
|            |             | quarterly | 2014     |                   |
|            | (11.7       |           |          |                   |
|            | million     |           |          |                   |
|            | units at a  |           |          |                   |
|            | face value  |           |          |                   |
|            | of Baht     |           |          |                   |
|            | 1,000 per   |           |          |                   |
|            | unit.)      |           |          |                   |
+------------+-------------+-----------+----------+-------------------+
|            | Baht 5,000  | 4.80% per | 10       | PTTEP was the     |
|            | million     | annum,    | years,   | issuer            |
|            |             | semi      | due in   |                   |
|            | (5 million  | -annually | 2019     |                   |
|            | units at a  |           |          |                   |
|            | face value  |           |          |                   |
|            | of Baht     |           |          |                   |
|            | 1,000 per   |           |          |                   |
|            | unit.)      |           |          |                   |
+------------+-------------+-----------+----------+-------------------+
| Bills of   | Baht 1,000  | 1.162%    | 35 days, | PTTEP was the     |
| Exchange   | million     |           | due in   | issuer.           |
|            |             |           | January  |                   |
|            |             |           | 26, 2010 |                   |
+------------+-------------+-----------+----------+-------------------+

* 6MFDR – The average of the average 6 months fixed deposit of 4 banks
(Bangkok Bank Limited, Kasikorn Bank, Krung Thai Bank, and Siam
Commercial Bank) which appears on the Bank of Thailand website.

7.1.3 Warrants

On April 30, 2002, the PTTEP’s General Shareholders’ Meeting consented
to the 5-year (2002-2006) Employee Stock Ownership Plan to issue and to
offer 10,000,000 units of warrants to purchase the Company’s common
shares. Details of the warrants to be allocated each year were to be
approved by the Shareholders on a yearly basis.

On April 28, 2004, PTTEP’s General Shareholders’ Meeting consented to
the reallocation of 2.4 million shares which was previously registered
and reserved for the exercise of right under the warrant issued to
management and employee in 1998, but had expired (none of the warrants
were exercised), to be reserved for the exercise of right under the
newly issued warrants in 2004, 2005, and 2006.

On April 12, 2006 PTTEP amended its par value from 5 Baht to 1 Baht per
share in accordance with the 2006 General Shareholders Meeting’s
resolution. The change of its par value affected the exercise ratio of
the warrants from 1:1 to be 1:5 including the exercise price from Baht
111, Baht 117, Baht 183, Baht 278 and Baht 456 to be Baht 22.20, Baht
23.40, Baht 36.60, Baht 55.60, and Baht 91.20 respectively. The details
of the allocation of each warrant which were approved by the General
Shareholders’ Meeting are as follows:

+------+--------------+-------------+--------------+-----------------+
| Year | No. of       | Year to     | Exercise     | No. of warrant  |
|      | warrants     | Maturity    | Price        | to              |
|      |              |             |              |                 |
|      |              |             | (Baht)       | No. of common   |
|      |              |             |              | stock           |
+------+--------------+-------------+--------------+-----------------+
| 2    | 2,000,000    | 5           | 22.20        | 1 : 5           |
| 002∗ |              |             |              |                 |
+------+--------------+-------------+--------------+-----------------+
| 2003 | 2,000,000    | 5           | 23.40        | 1 : 5           |
+------+--------------+-------------+--------------+-----------------+
| 2004 | 2,800,000    | 5           | 36.60        | 1 : 5           |
+------+--------------+-------------+--------------+-----------------+
| 2005 | 2,800,000    | 5           | 55.60        | 1 : 5           |
+------+--------------+-------------+--------------+-----------------+
| 2006 | 2,800,000    | 5           | 91.20        | 1 : 5           |
+------+--------------+-------------+--------------+-----------------+
| T    | 12,400,000   |             |              |                 |
| otal |              |             |              |                 |
+------+--------------+-------------+--------------+-----------------+

∗In 2002, the PTTEP’s General Shareholders’ Meeting resolved to issue
and offer the warrants to its directors, management and employee. In
2003 – 2006 the General Shareholders’ Meeting resolved to issue and
offer the warrants to its management and employee.

Starting from the year 2003 to the end of 2009, a total of 10,512,140
units of warrants had been exercised.

7.1.4 Number of shares and shareholders voting rights will be affected
by NVDR issuance

An NVDR or Non-Voting Depository Receipt is a trading instrument issued
by the Thai NVDR Company Limited, a subsidiary wholly owned by the Stock
Exchange of Thailand (SET). NVDRs are automatically regarded as listed
securities in the SET. The objective of issuing NVDRs is not only to
stimulate trading activities in the Thai stock market, but also to help
eliminate foreign investment barriers, such as the foreign investment
limits and the impediments faced by institutional investors who
previously could not trade in the existing Thai Trust Fund. Investors
will receive all financial benefits; i.e., dividends, right issues or
warrants, just as if they had invested in the Company’s common shares.
The only difference between investing in an NVDR and the Company’s
shares is the voting right. Additionally, although the NVDR is designed
mainly to ease foreign investment barriers, the SET does not prohibit
Thai investors from investing this instrument.

As reported on the SET website as of January 29, 2010, the Company’s
common shares of NVDRs issued and outstanding amounted to 44,821,896
shares or 1.35% of total registered paid-up shares, which amounted to
3,312,560,700 shares. The NVDR holders will not participate and vote in
shareholder’s meeting, except in the case where a listed company wishes
to delist its shares from the SET.

7.1.5 The agreement between the group of major shareholders which
affects securities issuance/offering or the operation of business

None

7.2 Shareholders

7.2.1 Top 10 major shareholders

Top 10 major shareholders of the Company as of 18 August 2009 are as
below. (The date which the Company closed shares registration book for
the right to receive the 2009 interim dividend.)

+---+-------+---------------------------------------+----------+--------+---+---+
|   | Ra    | Top 10 Major Shareholders             | Number   | % of   |   |   |
|   | nking |                                       | of       | total  |   |   |
|   |       | (as of 18 August 2009)                | Shares   | shares |   |   |
+===+=======+=======================================+==========+========+===+===+
|   | 1.    | PTT Public Company Limited            | 2,167    | 65.462 |   |   |
|   |       |                                       | ,500,700 |        |   |   |
+---+-------+---------------------------------------+----------+--------+---+---+
|   | 2.    | NORTRUST NOMINEES LTD.                | 91       | 2.768  |   |   |
|   |       |                                       | ,640,113 |        |   |   |
+---+-------+---------------------------------------+----------+--------+---+---+
|   | 3.    | STATE STREET BANK AND TRUST COMPANY   | 66       | 2.008  |   |   |
|   |       |                                       | ,475,869 |        |   |   |
+---+-------+---------------------------------------+----------+--------+---+---+
|   | 4.    | THE BANK OF NEW YORK (NOMINEES)       | 58       | 1.766  |   |   |
|   |       | LIMITED                               | ,487,114 |        |   |   |
+---+-------+---------------------------------------+----------+--------+---+---+
|   | 5.    | THAI NDVR COMPANY LIMITED∗            | 47       | 1.431  |   |   |
|   |       |                                       | ,371,269 |        |   |   |
+---+-------+---------------------------------------+----------+--------+---+---+
|   | 6.    | STATE STREET BANK AND TRUST COMPANY   | 37       | 1.146  |   |   |
|   |       | FOR LONDON                            | ,945,300 |        |   |   |
+---+-------+---------------------------------------+----------+--------+---+---+
|   | 7.    | BNP PARIBAS SECURITIES SERVICES       | 36       | 1.101  |   |   |
|   |       | LUXEMBOURG                            | ,460,245 |        |   |   |
+---+-------+---------------------------------------+----------+--------+---+---+
|   | 8.    | HSBC (SINGAPORE) NOMINEES PTE LTD     | 28       | 0.850  |   |   |
|   |       |                                       | ,144,180 |        |   |   |
+---+-------+---------------------------------------+----------+--------+---+---+
|   | 9.    | SOCIAL SECURITY OFFICE (2 CASE)       | 27       | 0.837  |   |   |
|   |       |                                       | ,697,820 |        |   |   |
+---+-------+---------------------------------------+----------+--------+---+---+
|   | 10.   | BNP PARIBAS SECURITIES SERVICES,      | 23       | 0.696  |   |   |
|   |       | LONDON BRANCH                         | ,048,200 |        |   |   |
+---+-------+---------------------------------------+----------+--------+---+---+
|   |       | Total Shares of Top 10 Major          | 2,584    | 78.065 |   |   |
|   |       | Shareholders                          | ,770,810 |        |   |   |
+---+-------+---------------------------------------+----------+--------+---+---+
|   |       | Issued and Paid-Up Shares as of 18    | 3,311    | 100    |   |   |
|   |       | August 2009                           | ,079,900 |        |   |   |
+---+-------+---------------------------------------+----------+--------+---+---+
|   |       |                                       |          |        |   |   |
+---+-------+---------------------------------------+----------+--------+---+---+

  ∗Top 10 Shareholders through Thai NVDR Company Limited are as
  follows:-

+-------+-----------------------------------------+-------+----------+
| Ra    | Top 10 Shareholders                     | N     | % of     |
| nking |                                         | umber | total    |
|       | (as of 18 August 2009)                  | of    | shares   |
|       |                                         | S     |          |
|       |                                         | hares |          |
+=======+=========================================+=======+==========+
| 1     | STATE STREET BANK AND TRUST COMPANY     | 6,69  | 0.20     |
|       |                                         | 0,000 |          |
+-------+-----------------------------------------+-------+----------+
| 2     | NORTRUST NOMINEES LIMITED-NORTHERN      | 2,94  | 0.09     |
|       | TRUST GUERNSEY CLIENTS                  | 8,000 |          |
+-------+-----------------------------------------+-------+----------+
| 3     | RAIFFEISEN ZENTRALBANK OSTERREICH AG    | 2,43  | 0.07     |
|       |                                         | 1,800 |          |
+-------+-----------------------------------------+-------+----------+
| 4     | THE BNY NOMINEES LTD A/C BANK OF NEW    | 2,31  | 0.07     |
|       | YORK EUROPE LTD-CLIENT                  | 2,708 |          |
+-------+-----------------------------------------+-------+----------+
| 5     | HSBC (SINGAPORE) NOMINEES PTE LTD       | 2,08  | 0.06     |
|       |                                         | 9,490 |          |
+-------+-----------------------------------------+-------+----------+
| 6     | DEUTSCHE WERTPAPIERSERVICE BANK AG      | 1,91  | 0.06     |
|       |                                         | 1,700 |          |
+-------+-----------------------------------------+-------+----------+
| 7     | N.C.B.TRUST LIMITED-STICHTING PGGM      | 1,64  | 0.05     |
|       | DEPOSITORY                              | 5,200 |          |
+-------+-----------------------------------------+-------+----------+
| 8     | MERRILL LYNCH,PIERCE,FENNER & SMITH     | 1,61  | 0.05     |
|       | INC.                                    | 5,000 |          |
+-------+-----------------------------------------+-------+----------+
| 9     | CREDIT SUISSE                           | 1,48  | 0.04     |
|       |                                         | 6,500 |          |
+-------+-----------------------------------------+-------+----------+
| 10    | JP MORGAN SECURITIES LTD.               | 1,46  | 0.04     |
|       |                                         | 0,200 |          |
+-------+-----------------------------------------+-------+----------+
|       | Total Shares                            | 24,59 | 0.73     |
|       |                                         | 0,578 |          |
+-------+-----------------------------------------+-------+----------+

Note: Data from
http://www.set.or.th/set/nvdr/nvdrholder.do?symbol=PTTEP&language=en&country=US

7.2.2 Major shareholder who has significant influence on determining
company policy or the operation of business

PTT, as the major shareholder, has nominated any person and the
management who possesses the qualification in accordance with the
company criteria for election as a director or the President and Chief
Executive Officer. The nominating committee will consider and propose
the list of qualified persons to the board of directors or the
shareholder’s meeting for approval, see additional details in item
8.3.1.

7.3 Dividend Policy

Normally, it is the policy of the Company’s Board of Directors to
propose to the shareholders an annual dividend of not less than 30% of
net income. Interim dividend may also be considered from time to time.
The Company has no dividend policies for its subsidiaries.