7. Capital Structure

As of December 31, 2011, PTTEP’s capital structure consisted of US
Dollar 3,873 million interest-bearing liabilities and US Dollar 6,312
million shareholders’ equities. The liability to shareholders’ equities
ratio was 0.61 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 2011, the Company’s registered paid-up capital was increased by Baht
2.54 million (2.54 million shares at the par value of 1 Baht per share),
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, 2011, the Company’s registered
paid-up capital was at Baht 3,320 million (3,320 million ordinary shares
at the par value of 1 Baht per share).

7.1.2 Bonds and Short-Term Commercial Papers

  (1) Bonds

On April 5, 2011, PTTEP Canada International Finance Limited (PTTEP CIF)
issued an unsecured and unsubordinated debenture to foreign
institutional investors for the total amount of US Dollar 700 million
with a coupon rate of 5.692%. The debenture is fully guaranteed by PTTEP
with the tenor of 10 years and has been rated BBB+ by Standard and
Poor's and Baa1 by Moody's. The net proceed from the debenture was used
for general corporate purposes. The Board of Directors and the general
Shareholders' meeting in the year 2007 and 2009 have approved the
Company's issuing and offering of debentures, whose approved amount
remaining was Baht 24,400 million in December 31, 2011.

(2) Short-Term Commercial Papers

The PTTEP Short-Term Financing Program (“PF”) has been launched to offer
short-term commercial papers to high net-worth individual and
institutional investors. The total of Bill of Exchange (B/Es) in 2010
was Baht 6,000 million. Bill of Exchange (B/Es) are to be issued with a
total revolving credit of up to Baht 50,000 million which was approved
by the Resolution of the Board of Directors’ meeting in February 2009
and in November 2010. As of December 31, 2011, there is no outstanding
B/Es.

Details of Baht Bonds and Short-Term Commercial Papers as of December
31, 2011 are as follows:

+----------------+------------------+----------------+-----------------+
| Debt Security  | Issue Size       | Rate per annum | Maturity        |
+----------------+------------------+----------------+-----------------+
| Unsecured      | Baht 2,500       | Fixed 4.625%   | 15 years, due   |
| unsubordinated | million          | per annum,     | in 2018         |
| Baht Bond      |                  | semi-annually  |                 |
| issued in 2003 | (2.5 million     |                |                 |
|                | Units at a face  |                |                 |
|                | value of Baht    |                |                 |
|                | 1,000 per unit)  |                |                 |
|                | [1]              |                |                 |
+----------------+------------------+----------------+-----------------+
| Unsecured,     | Baht 3,500       | Fixed 3.91%    | 5 years, due in |
| unsubordinated | million          | per annum,     | 2012            |
| Baht Bond      |                  | semi-annually  |                 |
| issued June    | (3.5 million     |                |                 |
| 2007 -Baht     | Units at a face  |                |                 |
| 12,500 million | value of Baht    |                |                 |
| issued in      | 1,000 per unit)  |                |                 |
| total          | [2]              |                |                 |
|                |                  |                |                 |
| * Baht 6,000   |                  |                |                 |
| million (6     |                  |                |                 |
| million units  |                  |                |                 |
| at a face      |                  |                |                 |
| value of Baht  |                  |                |                 |
| 1,000 per      |                  |                |                 |
| unit) was      |                  |                |                 |
| redeemed in    |                  |                |                 |
| 2010           |                  |                |                 |
+----------------+------------------+----------------+-----------------+
|                | Baht 3,000       | Fixed 5.13%    | 15 years, due   |
|                | million          | per annum,     | in 2022         |
|                |                  | semi-annually  |                 |
|                | (3 million units |                | Issuer has an   |
|                | at a face value  |                | option for      |
|                | of Baht 1,000    |                | early           |
|                | per unit)        |                | redemption in   |
|                |                  |                | 2012            |
+----------------+------------------+----------------+-----------------+

+----------------+------------------+----------------+-----------------+
| Debt Security  | Issue Size       | Rate per annum | Maturity        |
+----------------+------------------+----------------+-----------------+
| Unsecured,     | Baht 18,300      | Fixed 3.25%    | 3 years, due in |
| unsubordinated | million          | per annum,     | 2012            |
| Baht Bond      |                  | quarterly      |                 |
| issued May     | (18.3 million    |                |                 |
| 2009 -Baht     | Units at a face  |                |                 |
| 40,000 million | value of Baht    |                |                 |
| issued in      | 1,000 per unit)  |                |                 |
| total          | [3]              |                |                 |
+----------------+------------------+----------------+-----------------+
|                | Baht 5,000       | Years 1-2:     | 4 years, due in |
|                | million          | 3.00% per      | 2013            |
|                |                  | annum          |                 |
|                | (5 million units |                |                 |
|                | at a face value  | Years 3-4:     |                 |
|                | of Baht 1,000    | Fixed 4.00%    |                 |
|                | per unit) [4]    |                |                 |
|                |                  | or THB FIX +   |                 |
|                |                  | 1.25% with     |                 |
|                |                  |                |                 |
|                |                  | Cap of 6.0%    |                 |
|                |                  | and Floor of   |                 |
|                |                  | 3.25%,         |                 |
|                |                  | semi-annually  |                 |
+----------------+------------------+----------------+-----------------+
|                | Baht 11,700      | Fixed 4.00%    | 5 years, due in |
|                | million          | per annum,     | 2014            |
|                |                  | quarterly      |                 |
|                | (11.7 million    |                |                 |
|                | units at a face  |                |                 |
|                | value of Baht    |                |                 |
|                | 1,000 per unit)  |                |                 |
|                | [5]              |                |                 |
+----------------+------------------+----------------+-----------------+
|                | Baht 5,000       | Fixed 4.80%    | 10 years, due   |
|                | million          | per annum,     | in 2019         |
|                |                  | semi-annually  |                 |
|                | (5 million units |                |                 |
|                | at a face value  |                |                 |
|                | of Baht 1,000    |                |                 |
|                | per unit) [6]    |                |                 |
+----------------+------------------+----------------+-----------------+
| Bills of       | Baht 500 million | 2.080%         | 29 days, due in |
| Exchange       |                  |                | February 23,    |
|                |                  |                | 2011            |
+----------------+------------------+----------------+-----------------+
| Bills of       | Baht 500 million | 2.085%         | 29 days, due in |
| Exchange       |                  |                | February 23,    |
|                |                  |                | 2011            |
+----------------+------------------+----------------+-----------------+
| Bills of       | Baht 1,000       | 2.210%         | 27 days, due in |
| Exchange       | million          |                | March 22, 2011  |
+----------------+------------------+----------------+-----------------+
| Bills of       | Baht 1,000       | 2.410%         | 35 days, due in |
| Exchange       | million          |                | April 26, 2011  |
+----------------+------------------+----------------+-----------------+
| Bills of       | Baht 1,000       | 2.620%         | 28 days, due in |
| Exchange       | million          |                | May 24, 2011    |
+----------------+------------------+----------------+-----------------+
| Bills of       | Baht 1,000       | 2.725%         | 28 days, due in |
| Exchange       | million          |                | June 21, 2011   |
+----------------+------------------+----------------+-----------------+
| Bills of       | Baht 1,000       | 2.929%         | 35 days, due in |
| Exchange       | million          |                | July 26, 2011   |
+----------------+------------------+----------------+-----------------+

Details of US Dollar Bonds as of December 31, 2011 are as follows:

  ----------------- ----------------- ----------------- -----------------
  Debt Security     Issue Size        Rate per annum    Maturity

  Unsecured,        US Dollar 500     Fixed 4.152% per  5 years, due in
  unsubordinated US million [7]       annum,            2015
  Dollar Bond                         semi-annually     
  issued July 2010                                      

  Unsecured,        US Dollar 200     Fixed 4.152% per  5 years, due in
  unsubordinated US million [8]       annum,            2015
  Dollar Bond                         semi-annually     
  issued August                                         
  2010                                                  

  Unsecured,        US Dollar 700     Fixed 5.692% per  10 years, due in
  unsubordinated US million [9]       annum,            2021
  Dollar Bond                         semi-annually     
  issued April 2011                                     
  ----------------- ----------------- ----------------- -----------------

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[10] 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              |
|      |              |             |              |                 |
|      | (Unit)       | (Year)      | (Baht)       | No. of Common   |
|      |              |             |              | Stock           |
|      |              |             |              |                 |
|      |              |             |              | (Unit : 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 |              |             |              |                 |
+------+--------------+-------------+--------------+-----------------+

*Note: 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.

The Employee Stock Option Program (ESOP) was expired in 2011 and the
last exercise date was July 31, 2011. Since 2002, the total of exercised
Warrants was 12 million units and the total number of shares exercised
was 59.99 million shares.

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 wholly owned subsidiary of 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 at February 16, 2012, as publicized on the website of the Stock
Exchange of Thailand, the Company’s ordinary shares held by Thai NVDR
were 63,209,035 shares, which represent 1.904% of the total issued and
paid-up capital of the Company of 3,319,985,400 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.

7.2 Shareholders

7.2.1 Top 10 major shareholders

Top 10 major shareholders of the Company as of 16 February 2012 are as
below.

+-----+------------------------------------------+----------+---------+
| R   | Top 10 Major Shareholders                | Number   | % of    |
| ank |                                          | of       | total   |
|     |                                          | Shares   | shares  |
+=====+==========================================+==========+=========+
| 1   | PTT PUBLIC COMPANY LIMITED               | 2,167    | 65.286  |
| .   |                                          | ,500,700 |         |
+-----+------------------------------------------+----------+---------+
| 2   | BNP PARIBAS SECURITIES SERVICES          | 74       | 2.249   |
| .   | LUXEMBOURG                               | ,665,545 |         |
+-----+------------------------------------------+----------+---------+
| 3   | STATE STREET BANK AND TRUST COMPANY      | 68       | 2.058   |
| .   |                                          | ,310,851 |         |
+-----+------------------------------------------+----------+---------+
| 4   | THAI NVDR CO.,LTD.                       | 63       | 1.904   |
| .   |                                          | ,209,035 |         |
+-----+------------------------------------------+----------+---------+
| 5   | HSBC (SINGAPORE) NOMINEES PTE LTD        | 62       | 1.881   |
| .   |                                          | ,454,564 |         |
+-----+------------------------------------------+----------+---------+
| 6   | THE BANK OF NEW YORK (NOMINEES) LIMITED  | 52       | 1.581   |
| .   |                                          | ,493,608 |         |
+-----+------------------------------------------+----------+---------+
| 7   | CHASE NOMINEES LIMITED 42                | 47       | 1.436   |
| .   |                                          | ,662,028 |         |
+-----+------------------------------------------+----------+---------+
| 8   | STATE STREET BANK EUROPE LIMITED         | 44       | 1.330   |
| .   |                                          | ,163,935 |         |
+-----+------------------------------------------+----------+---------+
| 9   | NORTRUST NOMITEES LIMITED-NT0 SEC        | 43       | 1.318   |
| .   | LENDING THAILAND                         | ,744,252 |         |
+-----+------------------------------------------+----------+---------+
| 1   | BNP PARIBAS SECURITIES SERVICES, LONDON  | 38       | 1.173   |
| 0.  | BRANCH                                   | ,952,100 |         |
+-----+------------------------------------------+----------+---------+
|     | Total Shares of Top 10 Major             | 2,663    | 80.216  |
|     | Shareholders                             | ,156,618 |         |
+-----+------------------------------------------+----------+---------+
|     | Issued and Paid-Up Shares as of 16       | 3,319    | 100     |
|     | February 2012                            | ,985,400 |         |
+-----+------------------------------------------+----------+---------+

7.2.2 NVDR holder who owned more than 0.50% of the paid-up shares of the
Company*

+-----+------------------------------------------+----------+---------+
| R   | NVDR holder                              | Number   | % of    |
| ank |                                          | of NVDR  | Total   |
|     | (as of 16 February 2012)                 | Issues   | Outs    |
|     |                                          |          | tanding |
|     |                                          |          | Shares  |
|     |                                          |          | in      |
|     |                                          |          | Und     |
|     |                                          |          | erlying |
|     |                                          |          | Stock   |
+=====+==========================================+==========+=========+
| 1.  | STATE STREET BANK AND TRUST COMPANY      | 18       | 0.55    |
|     |                                          | ,223,600 |         |
+-----+------------------------------------------+----------+---------+
|     | Total NVDR                               | 18       | 0.55    |
|     |                                          | ,223,600 |         |
+-----+------------------------------------------+----------+---------+

* Since 18 January 2010, Thai NVDR Co., Ltd. has changed its rule on
disclosure of name of NVDR holder to disclose the names of NVDR holders
having over 0.50 percent of the paid-up capital of underlying security.

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

PTT, a major shareholder, takes part in determining company’s policy and
its operations but under the Board approval. As of 1 January 2012, there
are 6 out of 15 directors who are assuming the director and executive of
PTT.

7.3 Dividend Policy

Normally, it is the policy of the Company’s Board of Directors to
recommend 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.

[1] Swapped into USD 60.82 million at an interest rate of 3.85% per
annum in 2005, then unwinded swap to Baht 2,500 MM at 3.30% per annum in
2007. In 2011, PTTEP swapped the bond into USD 82.92 million at an
interest rate of 3.30% per annum.

[2] Swapped into USD 115.78 million at an interest rate of 1.73% per
annum in 2011.

[3] Swapped into USD 603.36 million at an interest rate of 1.45% per
annum in 2011.

[4] Swapped into USD 165.89 million at an interest rate of 2.01% per
annum in 2011.

[5] Swapped into USD 389.50 million at an interest rate of 2.67% per
annum in 2011.

[6] Swapped into USD 161.81 million at an interest rate of 4.93% per
annum in 2011.

[7] PTTEP Australia International Finance Pty Ltd (PTTEP AIF) was the
issuer, fully guaranteed by PTTEP

[8] PTTEP Australia International Finance Pty Ltd (PTTEP AIF) was the
issuer, fully guaranteed by PTTEP

[9] PTTEP Canada International Finance Limited (PTTEP CIF) was the
issuer, fully guaranteed by PTTEP

[10] On June 16, 1998, PTTEP’s General Shareholders’ Meeting approved
the issuance and offering of 1.2 million units of warrants to purchase
PTTEP’s common shares to management and employees of the Company. The
warrants had a 5 year life, and the exercise price of Baht 300. On
August 30, 2000, PTTEP’s Extraordinary General Shareholders’ Meeting
resolved to change the par value of the Company’s common shares from
Baht 10 to Baht 5, and as a result, the exercise price of the warrants
became Baht 150 each. On June 15, 2003, the warrants issued in 1998 were
expired.