Kiatnakin Phatra Securities (KKPS) wrote that Thailand’s shift towards enhancing energy security amid global market disruptions is set to benefit PTT Exploration and Production Public Company Limited (SET: PTTEP). The country’s revised energy policy emphasizes increasing indigenous energy production and reducing reliance on imported sources like LNG.
As the national E&P company, PTTEP stands to gain from expanded opportunities to boost production and reserves to support Thailand’s energy needs.
A recent milestone for PTTEP is the Gas Sales Agreement for Block A-18-01 in the Malaysia-Thailand Joint Development Area. This agreement will supply an additional 200 mmcfd of gas to Thailand and bolster PTTEP’s proven reserves by about 20 million tons.
In Myanmar, PTTEP is considering investing in Block A-6, an ultra-deepwater field now wholly owned by MPRL E&P following the exit of TotalEnergies and Woodside Energy in 2022 due to sanctions. The block, with an estimated 2-2.4 trillion cubic feet of resources and planned production of 400-500 mmcfd, has reached the FEED stage. Because of Block A-6’s proximity to the Yadana gas field, its gas can be integrated into Yadana’s facilities and piped directly to Thailand.
According to the brokerage, PTTEP may also increase production at the Bongkot (G2) and Erawan (G1) gas fields beyond current commitments of 700 mmcfd and 800 mmcfd, respectively, subject to reserve upgrades and higher gas prices to offset increased production costs.
Currently, the average selling price from G1 and G2 is below $5.5/mmbtu—significantly cheaper than imported LNG, projected at $12.7/mmbtu in 2025 and $13.9/mmbtu in 2026. Discussions are reportedly underway between the government and PTTEP regarding possible production increases, with price negotiations as a key factor.
The outlook for PTTEP remains strong, with a ‘Buy’ recommendation and a target price of THB 155.00 per share given by KKPS, supported by a promising dividend yield, attractive valuation, robust earnings growth, and the potential for further reserve upgrades.
