KGI Securities (Thailand) has provided an updated outlook on PTT Exploration and Production Public Company Limited (SET: PTTEP) following the company’s acquisition of a 9.998% indirect stake in Malaysia’s SK408 natural gas and condensate project.
On December 16, PTTEP entered an agreement with TotalEnergies SE to acquire a 49.99% interest in AzurVista Resources Pte. Ltd., which holds a 20% stake in the SK408 project.
This acquisition gives PTTEP an effective 9.998% participating interest in the field, which currently produces about 750 million standard cubic feet per day (mmscfd) of natural gas and 15,000 barrels per day (KBD) of condensate. Gas from the project is supplied to an onshore LNG liquefaction facility.
The acquisition price, at approximately US$6-7 per barrel of oil equivalent (BOE) based on 2P reserves of 52 million BOE, is below the recent regional average of US$8.4/BOE.
Following the deal, KGI has raised its 2026 and 2027 earnings forecasts for PTTEP by 1% to THB 56.3 billion and THB 55.8 billion, respectively. The SK408 project is expected to contribute around US$20 million annually to PTTEP’s earnings via profit sharing from associates, based on a gas selling price of US$4-5/mmbtu and unit costs of about US$20/BOE.
The acquisition is also projected to increase annual sales volume for PTTEP by approximately 10,000 BOED, or 2% of the company’s total forecast sales volume. However, the addition will not affect PTTEP’s average selling price or unit costs, as the project is not consolidated on a line-by-line basis.
Despite this positive development, KGI maintains a ‘Neutral’ rating on PTTEP with an unchanged 2026 target price of THB 120.00 per share.
The brokerage firm expects a quarter-on-quarter earnings recovery in 4Q25, primarily from higher sales volume, but sees year-on-year earnings declining due to a lower Dubai crude price projection. The share price may face continued pressure from global oil price trends, driven by potential peace in the Russia-Ukraine conflict and increased OPEC+ crude supply.
