Morgan Stanley and JPMorgan give an ‘Overweight’ recommendation on PTT Exploration and Production Public Company Limited (SET: PTTEP), with target prices of THB 176 and THB 190 per share, respectively, citing different factors influencing the company’s outlook, including oil hedging exposure, production recovery, and potential reserve growth from its Lang Lebah development.
Morgan Stanley highlighted that PTTEP recorded an oil hedging loss of approximately $50 million in 3Q26 and has also hedged 7 million barrels of fourth-quarter oil production, equivalent to around 20% of total output, at Dubai crude prices of $95 per barrel, limiting its exposure to potential oil price gains.
Production volume declined 9% QoQ to 521,000 barrels of oil equivalent per day, reflecting maintenance activities in Thailand and lower crude sales in Malaysia and Algeria. These factors are expected to normalise in 4Q26. However, PTTEP reduced its 2026 production guidance by 2% to 550,000 barrels per day following lower Malaysian output associated with major FPSO repairs. The maintenance also resulted in a $200 million impairment charge in 3Q26.
According to the analyst, the average selling price of oil fell to $90 per barrel from $100 in 2Q26, while gas prices are expected to increase to $6.40 per MMBtu in 4Q26. Net debt also rose to $2 billion from $1.1 billion in June 2026.
Meanwhile, JPMorgan views PTTEP’s Lang Lebah strategic development, integrated with the B14 project, as an opportunity to address concerns over its relatively short reserve life. The combined development could add approximately 250–265 million barrels of oil equivalent in attributable resources, equivalent to around 14% of the company’s 1P reserves at the end of 2025.
JPMorgan estimates that the transaction could generate $50–80 million in proceeds for PTTEP in 2027. Following potential completion in early 2027, a final investment decision and subsequent reserve recognition could take place by early 2029. Neither project is currently included in the company’s reserves or 2026–2030 production guidance.
Following the 3Q26 results, the brokerage raised its core net profit forecasts for 2026–2028 by 4%, 19%, and 18%, respectively, and projected dividend yields of 6–7% for 2026–2027.
