Company Coverage
PTT Exploration & Production (PTTEP TB): LLB And Yadana Progress Supports PTTEP’s Long-term Growth Prospects
BUY (Maintained)
Current price:
Target price:
Upside:
Bt144.00
Bt190.00
+31.94%
Analyst
Analyst
Highlights
PTTEP expects to reach FID for LLB within the next 2-3 years, following the completion of the transaction in 1Q27. Meanwhile, Yadana offers significant upside potential from a possible concession extension and the development of nearby gas fields through shared infrastructure.
PTTEP remains financially strong, underpinned by robust earnings and a low D/E ratio. However, the company is currently reviewing its five-year capex plan, with an updated plan expected to be announced in early December.
Maintain BUY with a target price of Bt190.00.
Analysis
The tone during the meeting with PTT Exploration and Production (PTTEP) was positive.
Lang Lebah project progresses, with FID expected within 2–3 years. The Lang Lebah Project (LLB) is moving forward, with FID expected within 2–3 Years. PTTEP has restructured its investment in the LLB project, reducing its stake from 42.5% to 25%, while acquiring a 25% stake in the B14 field. TotalEnergies will become the operator with a 30% stake, with the transaction expected to be completed in 1Q27. PTTEP expects to reach final investment decision (FID) within the next 2-3 years, followed by first gas production within 4-5 years after FID. We view this development positively for PTTEP’s long-term prospects, as it transforms technically challenging, high-cost assets into more commercially viable projects through shared facilities and collaboration with a strategic partner experienced in developing complex gas fields.
Both LLB and B14 are currently in the development phase. We see two key benefits from their integrated development: a) Value improvement: As the LLB and B14 fields are located only 14km apart, sharing facilities could reduce operating expenses and capex, lowering unit technical costs by approximately 20%. PTTEP estimates the project IRR at 10-15%; and b) Reduced execution risks: Appointing TotalEnergies as the operator should help mitigate project execution risks, given its extensive experience and expertise in developing large-scale, technically complex gas fields. LLB is a sour gas field with high sulphur content, as well as high-pressure and high-temperature conditions, which have previously posed significant development challenges for PTTEP, particularly due to higher-than-expected development costs.
Highlights
PTTEP expects to reach FID for LLB within the next 2-3 years, following the completion of the transaction in 1Q27. Meanwhile, Yadana offers significant upside potential from a possible concession extension and the development of nearby gas fields through shared infrastructure.
PTTEP remains financially strong, underpinned by robust earnings and a low D/E ratio. However, the company is currently reviewing its five-year capex plan, with an updated plan expected to be announced in early December.
Maintain BUY with a target price of Bt190.00.
Analysis
The tone during the meeting with PTT Exploration and Production (PTTEP) was positive.
Lang Lebah project progresses, with FID expected within 2–3 years. The Lang Lebah Project (LLB) is moving forward, with FID expected within 2–3 Years. PTTEP has restructured its investment in the LLB project, reducing its stake from 42.5% to 25%, while acquiring a 25% stake in the B14 field. TotalEnergies will become the operator with a 30% stake, with the transaction expected to be completed in 1Q27. PTTEP expects to reach final investment decision (FID) within the next 2-3 years, followed by first gas production within 4-5 years after FID. We view this development positively for PTTEP’s long-term prospects, as it transforms technically challenging, high-cost assets into more commercially viable projects through shared facilities and collaboration with a strategic partner experienced in developing complex gas fields.
Both LLB and B14 are currently in the development phase. We see two key benefits from their integrated development: a) Value improvement: As the LLB and B14 fields are located only 14km apart, sharing facilities could reduce operating expenses and capex, lowering unit technical costs by approximately 20%. PTTEP estimates the project IRR at 10-15%; and b) Reduced execution risks: Appointing TotalEnergies as the operator should help mitigate project execution risks, given its extensive experience and expertise in developing large-scale, technically complex gas fields. LLB is a sour gas field with high sulphur content, as well as high-pressure and high-temperature conditions, which have previously posed significant development challenges for PTTEP, particularly due to higher-than-expected development costs.
BUY (Maintained)
Current price:
Target price:
Upside:
Bt144.00
Bt190.00
+31.94%
Analyst
Analyst
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