Analyst Expects PTTEP to Book 2021 Earnings of ฿27Bn, Recomm. “Accumulate” at ฿106

Phillip Securities expected PTTEP to book 27,135 million baht of net profit next year, which would be higher than an estimated net profit in 2020 at 19,694 million baht in response to PTTEP’s future business plans to increase its production capacity and selling price, recommending “Accumulate BUY” at a target price of ฿106.00/share.

 

Phillip assessed PTT Exploration and Production Public Company Limited (PTTEP) to have a total revenue of 155,314 million baht in 2021 and net profit of 27,135 million baht, would  higher than an estimated 2020 net profit of 19,694 million baht, driven by Company’s future investment plans such as increase future production volume, capacity and selling price.

 

The sales volume in 5 years (2021-2025) would grow at the average of 6% per year, Phillip expected oil sales volume to increase by 10% to 375,000 bpd in 2021 (436,000 bpd in 2022, 446,000 bpd in 2023, 466,000 bpd in 2024 and 462,000 bpd in 2025) mainly due to a rising  demand in Thailand and Malaysia once Covid-19 outbreak improves, together with an increase in production in Malaysia, which schedules to begin the producing in 2Q2021, follows by in Algeria in the second half of 2021, and from 2022, PTTEP will start its operation in Erawan field. 

 

For PTTEP’s five-year investment plan (2021-2025), the Company budgets totally $23,637 million for capital expenditure ($14,020 million) and operating expenditure ($9,617 million) in preparation for the objectives of 1) maintain the production level of the existing projects including the S1 Project, the Bongkot Project, the Arthit Project, the Malaysia Project, the Zawtika Project, as well as to carryout preparations for planned operations of the G1/61 (Erawan field) and G2/61 Projects(Bongkot field).

 

2) Increase future production volume to support two development projects – the Mozambique Area 1 Project and the Algeria Hassi Bir Rekaiz Project – to ensure planned production start timelines, as well as to accelerate development plans for the Sarawak SK 410B Project in Malaysia, which made a successful petroleum discovery, in order to reach the Final Investment Decision (FID).

 

3) Accelerate exploration activities to enhance contingent resources for supporting long term growth. The main activities include the drilling of exploration and appraisal wells in Malaysia and Mexico.

 

Furthermore, PTTEP has expected its five-year investment plan to support a 5-year Compounded Annual Growth Rate (CAGR) for sales volume of 6%, thus Phillip Securities recommend “Accumulate BUY” at the new target price of ฿106.00/share, pressured by oil price fluctuates and a delay in exploration and development projects.