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PTT Exploration and Production Pcl (SET:PTTEP), a 65.29% stake owned by PTT Pcl (SET:PTT), is a Thailand-based company engaged in the exploration and production of petroleum. The company operates three business segments: oil and gas exploration and production, overseas pipelines and investment in projects strategically connected to the energy business. PTTEP has invested in E&P activities in Thailand, Myanmar, Vietnam, Indonesia, Algeria, Oman, Mozambique, Australia, Canada, Brazil, and Kenya. The parent company, PTT Pcl, is Thailand’s largest fully integrated gas and oil company and the eighth largest energy company in the Asia/Pacific rim region, according to Platts.
The company said on April 28, 2016, that its first-quarter 2016 revenues were 38.16 billion baht, up 20.50% year-on-year, beating the 37.46 billion baht consensus estimate of 4 analysts, according to the Financial Times. PTTEP posted first-quarter 2016 earnings of 1.73 baht per share.
For 2015, PTTEP reported a dividend of 3.00 baht per share, down 33.33% from 2014. The 23 analysts covering the company expect dividends of 1.66 baht per share for the upcoming fiscal year, representing a year-over-year decrease of 44.63%.
In April, PTTEP’s management told reporters that the company would be slashing its unit production cost from $39 a barrel last year to around $35 this year, and keep production volume close to last year's 322,000 barrels per day of oil equivalent. The company is sitting on a cash pile of $3.2 billion and is keen to buy assets in Thailand and Southeast Asia that are up for sale, according to Reuters. Earlier this month, PTTEP said it would bid to operate the Bongkot natural gas field, as the Thai government plans to put expiring petroleum contracts up for auction in the next 12 months. PTTEP already owns 44.4% of the Bongkot field.
Technically, shares of PTTEP ran up over 100% from the January low of 41.25 baht per share and the easy money may be already made. The stock is trading along with the Brent crude oil price, which could be range-bound between $40 and $50 per barrel in 2016. The bulls might try to push the stock to test the 100 baht technical resistance level, but it would be a stretch for a company with declining revenues and earnings.
According to the Financial Times, the consensus amongst 27 polled investment analysts covering PTT Exploration and Production gave the company a Hold rating, with the median 12-month price target of 71 baht per share.
Disclosure: No position and no recommendation. |
