SET Announcements

1. Book Value 11,461.53-14,155.29 16.32-17.28 2. Historical Market Value 11,602.33-12,920.36 13.38-14.90 3. Discount Cash flow 12,089.31-25,732.31 13.94-17.87 4. Market Multiples - PER 10,830.05-13,889.39 12.49-16.02 5. Market Multiples - P/BV 17,401.99-45,712.59 20.07-52.72 6. Market Multiples - EV/EBITDA (2,388.80)-4,200.24 (2.75)-4.84 Subordinated convertible debentures BCP plans to issue subordinated convertible debentures not exceeding 189,000 units or Baht 1,890 million with time to maturity 10 years and not more than 5% per year (semiannual) to PPT in order to finance PQI. The par value and exercise price range of convertible debenture are 10,000 Baht per unit and between 14-16 Baht per share that is equal to private placement price range of PTT respectively. The convertible debenture holder can convert convertible debenture in every quarter since 2006 onward. Normally, the convertible debenture is equal to bond and call option altogether. And a value of warrant at maturity date is current market price minus exercise price or zero based on which one is higher. For example, as of August 23, 2005, if BCP's share price is 14.20 Baht, the intrinsic value of call option is zero due to market price less than exercise price. The Financial Advisor applies Black-Scholes Model that is widely accepted way to evaluate warrants. The details are follows: Assumption: BCP's share price is 14.20 Baht per share as of August 23, 2005 Risk free rate is 5% based on yield of 10 year Thai Treasury bond as of August 23, 2005 Volatility of BCP's share return is 29.78% over past 1 year and 53.36% over past 3 years as of August 26, 2005 Warrant, which will be expired in next 10 years, can be calculated as follows: Over 1 year Over 3 year (Since August 23, 2004) (Since August 23, 2002) Volatility of return 29.78% 53.36% Warrant (Baht per Unit) 6.33 9.15 However, the Financial Advisor has an opinion that the volatility over past 1 year is more suitable for valuation of warrant than over 3 years because the Financial Advisor intends to avoid effect of financial restructure of BCP in 2004. The warrant value is 6.33 Baht per unit. For calculating only straight bond, the Financial Advisor has to split up warrant from convertible debenture. The calculation is in following table. Convertible Debenture 10,000.00 Baht Price of straight bond 5,943.35 Baht Warrant Price 4,219.06 Baht Yield of straight bond 12.51% The information in above table can be concluded that yield of straight bond which comes from convertible debenture is higher than yield of ordinary straight bond of comparable companies in energy sector that is 5% plus 120 to 150 basis points or 6.20% to 6.50%. However, BCP actually plans to issue straight equity that has an expected return on equity at 21.87% to PTT in first stage but BCP will issue convertible debenture instead in order to relieve effect of dilution effect to existing shareholders. Hence, the Financial Advisor concludes that the yield of BCP's convertible debenture, which is 12.10%, is not too higher if BCP plans to issue all straight equity to PTT. Besides, the convertible debenture is subordinated bond that has second priority than secured bond and not like the BCP-DR1 guaranteed by Ministry of Finance. 4. Summary of Financial Advisor opinions According to investing in Product Quality Improvement (PQI) or Hydrocracking Unit about $250-350 million, BCP plans to issue common stocks and subordinated convertible debentures to PTT and financial institutions approximately $150 million and borrow from commercial bank for balancing the project investment. For PTT transaction, BCP issues common stocks and subordinated convertible debentures to PPT not more than $120 million. The detail is follows: PTT Number of shares Price Range or Conversion price (Baht per Share) Common stock Less than 283,000,000 14.00-16.00 Subordinated convertible debentures Less than 135,000,000 14.00-16.00 PTT will buy BCP's common shares in regard to private placement with price range between 14.00 and 16.00 Baht per share. PTT proposes to buy common shares not more than 283 million shares or 4,528 million shares and to buy subordinated convertible debentures not more than 189,000 units or 1,890 million Baht. The conversion price is between 14 and 16 Baht per share. The price range that PTT will buy BCP shares is close to market price as August 26, 2005 because BCP plan to enhance benefit for PTT in order to compensate operating and financial risks from investing in PQI. Conversely, from the acquisition of BCP's share by PPT, BCP and PTT would earn synergy each other from enhancing an operating performance and reducing a business risk because PTT is oil company leader in Thailand which owns almost half of crude, finished oil products, and gas stations in Thailand. PTT is also expert in refinery and trading oils in Thailand so PTT would help BCP in both operation and technique. Normally, when PTT invests in any companies, it plans to invest in long term. Its investment would build a good image and a confidence for investors. Finally, BCP is still Thai company for Thai people. From all valuation methods, the Financial Advisor believes that discounted cash flow is most suitable for BCP since it considers changing in future incidents of BCP, future operation of BCP and projects of BCP. Therefore, equity value calculated by discounted cash flow is fair and referral for evaluating value of BCP's shares acquired by PTT. PTT, which plans to buy BCP shares not more than 283 million shares, will invest from 3,945.02 million Baht to 5,057.21 million Baht or from 13.94 to 17.87 Baht per share up to size of PQI project. In addition to discounted cash flow, book value and historical market value methods also support discounted cash flow method because BCP's prices from book value and historical market value methods are close to price from discounted cash flow. The price range from book value is from 16.32 to 17.28 Baht per share. The book value method represents normal operation of BCP but it may have to adjust effects from high volatility of oil price. The historical market value method reflects both retail investor and financial institute perspectives. The price range of this method is 13.38-14.11 Baht per share. In opposition, the Financial Advisor would not recommend market multiples method because different accounting method, rare comparable companies and uncertainty future incidents affect it. In short, when comparing between price range of Financial Advisor from 13.94 to 17.87 Baht per share or from 3,945.02 to 5,057.21 million Baht and tentative price range of PTT from 14 to 16 Baht per share or from 3,962.0 to 4,528.0 million Baht, the Financial Advisor do believes that the transaction between BCP and PTT is suitable and fair because those price ranges are intersected each other. For subordinated convertible debenture, BCP plans to issue not more than 189,000 units with term not more than 10 years and interest not more than 5% per year (assumed paying semiannual interest) to PTT. If the Financial Advisor splits off the call option from subordinated convertible debentures, the pure bond of subordinated convertible debenture gives yield to bondholder higher than ordinary straight bond of comparable companies in energy sector between 6.20% and 6.50%. Indeed, BCP intends to issue all straight equity that gives yield at 21.87% to PTT but BCP doesn't want to build high dilution effects to shareholders. Thus, even the subordinated convertible debenture gives yield higher than ordinary straight bond, the yield of subordinated convertible debenture is still less than return to equity. Furthermore, the subordinated convertible debenture is unsecured bond and not guaranteed by Ministry of Finance; therefore, PTT will bear more risk than BCP-DR1. In brief, the subordinated convertible debenture would be fair. The Financial Advisor can conclude as follows: The Financial Advisor agrees that the price range of BCP's share acquired by PTT is fair and reasonable for existing shareholders but the convertible debentures acquired by PTT may be cheaper than fair value of convertible debentures. Conversely, BCP intends to issue all common stock in the first place.So, if assuming convertible debentures as common stocks, then the convertible debentures will be reasonable and relieve consequence from dilution effect. In conclusion, from all above reasons, the common shares and convertible debentures issued for PTT are fair and existing BCP shareholders are going to earn upside benefit from PQI in the future. PQI is one of the most valuable projects for BCP because it will improve product mix to be more valuable and financial status in the future. Besides, existing shareholders should consider investing in PQI because it imposes risks in regard to time of construction, investment budget, contractors and operation after finishing the construction. 4.1 Opinion of Financial Advisor to voting shareholders From all above reasons, the Financial Advisor believes the allocation of common stocks and/or convertible debenture thru private placement to PTT will give the additional benefits to BCP and BCP's shareholders in long term. The voting shareholders should approve the connected transaction because this transaction with price range 14-16 Baht per share is reasonable and fair and the successfulness of PQI depended on financial support will enhance the business competence, long-term benefit of BCP's operation and value added to all shareholders. However, the approval resolution from shareholder meeting to execute this transaction is depended on shareholders' considerations. The Financial Advisor just discloses all related information and give the opinion based on accuracy of information received from BCP, Financial Advisor of BCP, interview from management and employees of BCP. The Financial Advisor did not perform an independent audit or verification for the accuracy and completeness all disclosed information. Finally, all shareholders should study and consider all information attached with invitation letter in order to make accurate decisions. 4.2 Sources of information and assumption The sources of information used in the consideration of the connected transaction are follows: -Form to request the Resolution of the Shareholders Meeting for a Waiver of Tender Offer (Form 247-7) as of September 20,2005 -Letter informing the resolution of Board of Directors Meeting No. 9/2005 of the Bangchak Petroleum Public Company Limited ("BCP" or "the Company") on August 29, 2005 -Letter informing the resolution of Board of Directors Meeting No. 8/2005 of the PTT Public Company Limited ("PTT" or "the Waiver") on August 29, 2005 - Financial statement of 2002 to 2004 and financial statement of 1Q2005 and 2Q2005 -Annual report of (56-1) of 2002 to 2004 -Information memorandum of BCP as of June 10, 2005 conducted by Turnaround -Overview and trend of the oil market: An implication for Thailand as of July 20, 2005conducted by Petroleum Institute of Thailand - Article of Affidavit, memorandum of association and shareholders list of BCP and PTT As the independent financial advisor, our opinion is based on information from BCP, other advisors of BCP, interview from management and employees of BCP and external environment. The Financial Advisor has assumed that the information used is accurate and complete; therefore, if the information used is not accurate and complete or significantly changed in the future, the opinion of the Financial Advisor will be affected accordingly. The Financial Advisor certifies that the Financial Advisor has studied and considered all information with discrete based upon professional standard and benefit of existing shareholders as priority. Yours Sincerely, (Mr. Montree Sornpaisarn) Chief Executive Officer Kim Eng Securities (Thailand) Public Company Limited