Kiatnakin Phatra Securities (KKPS) expects PTT Exploration and Production Public Company Limited (SET: PTTEP) to post robust core net profit for the second quarter of 2026, driven by higher oil prices and sustained low unit costs.
After a healthy core net profit after tax (NPAT) of THB 20 billion in 1Q26, KKPS forecasts 2Q26 core NPAT to improve further to THB 23.2 billion. This would bring PTTEP’s core 1H26 earnings to THB 43.1 billion, representing 45% of KKPS’s full-year estimate and 57% of consensus forecasts.
Despite this strong core performance, reported 1H26 NPAT is expected to come in lower at THB 35.1 billion due to an unrealized hedging loss of THB 8 billion in the first half of the year, with no large hedging losses anticipated in the second quarter.
PTTEP’s sales volume is projected at 544,000 barrels per day (bbl/d), a 1.3% increase quarter-on-quarter and 7.8% rise year-on-year, supported by strong demand for Gulf of Thailand gas offsetting imported LNG gap and contributions from its 2025 acquisition.
While Q1 results benefited from robust volume and low unit costs, Q2 performance should see further uplift from higher oil prices. KKPS noted that the impact of March’s oil price increase was muted in Q1 due to timing lags but expects this to be more pronounced in Q2. The liquid price discount to the spot Dubai average is guided to fall from $11 per barrel in Q1 to $6 per barrel in Q2 and return to the normal $2-3 per barrel range from Q3 onwards.
KKPS added that exploration and production (E&P) unit costs should stay at the lower end of PTTEP’s range, with Q1 reported at $28 per barrel and Q2 forecast at $28.5 per barrel, helped by limited maintenance activities in 1H.
Hedging contracts marked to market at $101 per barrel are also expected to yield gains in June, offsetting projected losses in April and May. Given the strong operating performance, KKPS forecasts a 1H dividend per share (DPS) of THB 4.25, consistent with PTTEP’s typical pattern of lower interim payouts before a higher final dividend in 2H.
KKPS reiterates its “Buy” rating on PTTEP along with a target price of THB 169, citing attractive dividend yields, a net positive impact from rising oil prices in 2026, strong cash flow, and NPAT growth.
