PTT Exploration & Production

PTT Exploration & Production Plc (PTTEP)

Despite rising costs and a declining success ratio, PTTEP’s earnings growth outlook remains solid on rising ASP and volume growth. The 4Q11 results, coming in a shade above expectations, clearly reflect improved earnings visibility. And this should support its share price. Driven by rising oil and gas prices, 4Q11 earnings slightly exceeded our estimates by 3.7% and consensus by 2.5%. Having bottomed out in 2011, earnings are set to grow at 22% CAGR over the next three years. We keep unchanged both our Trading Buy call and DCF-based target price.