PTT Exploration and Production Public Company Limited (SET: PTTEP) stands to gain from the newly signed 35-year Production Sharing Contract (PSC) with the Malaysia-Thailand Joint Authority (MTJA) for Block A-18-01, effective January 1, 2026. In collaboration with PETRONAS Carigali, PTTEP finalized both the PSC and a Gas Sales Agreement (GSA) with buyers PTT Pcl. and PETRONAS.
Both companies will share a 50% stake in this block, which boasts a production capacity of about 300-400 million standard cubic feet per day (mmscfd). The output will be split equally between Thailand and Malaysia.
KGI Securities (Thailand) views the long-term contract extension positively, citing it prolongs the production life of a key gas asset. The new agreement is also expected to boost PTTEP’s gas selling price, as pricing will shift from a high-sulfur fuel oil (HSFO) benchmark to a Brent-linked formula.
Despite these positives, KGI has revised down its 2026 earnings forecast for PTTEP by 3% to THB 74.6 billion due to an expected reduction in sales volume. This drop is attributed mainly to a scheduled shutdown for technical maintenance at the Kikeh project in Malaysia to ensure safe operations.
Consequently, the firm’s sales volume assumption for 2026 has been reduced by 2% to 555 KBOED. In contrast, the 2027 earnings forecast has been raised by 2% to THB 81.4 billion, supported by the expected increase in gas prices under the new Block A-18-01 deal.
KGI has also upgraded its gas price assumptions to $6.1/mmbtu in 2026 and $6.5/mmbtu in 2027. Reflecting these changes, the brokerage has raised its target price for PTTEP to THB 155.00 from THB 149.00, applying a DCF methodology. Meanwhile, despite promising projected dividend yields of 6.3% in 2026 and 6.9% in 2027, the brokerage maintains a ‘Neutral’ rating on the stock.
