PTTEP

Singapore, December 16, 2015 -- Moody's Investors Service has affirmed the
Baa1 issuer and senior unsecured ratings of PTT Exploration and
Production Public Company Limited (PTTEP). Moody's has also affirmed the
Baa3 ratings of PTTEP's subordinated perpetual capital securities.

Moody's has also affirmed the Baa1 senior unsecured ratings of PTTEP's
indirect wholly owned subsidiary, PTTEP Canada International Finance
Limited.

The outlook on all ratings is stable.

RATINGS RATIONALE

The rating actions follow sharp reduction in Moody's oil price assumptions
in light of continuing oversupply in the global oil markets. Moody's now
assumes Brent crude price, the international benchmark, to average $43
per barrel and $48 per barrel in 2016 and 2017 respectively. This marks a
$10 per barrel and $12 per barrel reduction from its previous assumptions
for 2016 and 2017 respectively.

"While PTTEP's earnings and operating cash flows will continue to decline
over the next two years given the persistently low crude prices, we
believe its weakened credit profile can still be accommodated at its Baa1
rating level. We expect the upstream company's retained cash flow
(RCF)-to-adjusted debt ratio will stay at 50%-52% for the next two years
which remains marginally above our tolerance level of 50%," says Rachel
Chua, a Moody's Analyst.

Moody's believes the lower oil prices will result in a 30% year-on-year
decline in PTTEP's EBITDA in 2016 and a further 2%-3% decline in 2017.

These projections assume that the company's average selling price of oil
and natural gas will fall to around $38 per barrel of oil equivalent
(boe) in 2016 and $36/boe in the following year. Even though we expect
Brent crude oil price to average $48 per barrel in 2017, the delayed
impact of lower oil prices on natural gas prices with a 3-12 month time
lag will keep the company's average selling price suppressed in that year.

The ratings affirmation also reflects the company's strong liquidity
profile and financial flexibility. The company has a sizeable cash
balance (including short-term investments) of $3.1 billion at 30
September 2015. It also has no debt maturities in 2016 and is in the
process of terming out its 2017 maturities.

On a net debt basis, Moody's projects PTTEP's RCF-to-net-debt ratio will
remain healthy at over 100% through 2017.

"We expect PTTEP to continue with its cash preservation policy to support
its weakly-positioned Baa1 ratings through this challenging down cycle.
There is limited headroom at its current rating level to accommodate a
further credit deterioration from debt-funded investments or a
significant erosion of cash for purposes other than debt repayment such
as acquisitions," adds Chua, who is also Moody's lead analyst for PTTEP.

Moody's projections also take into account PTTEP's reduced capex plans
announced on 15 December 2015 which is in line with the management's
commitment to conserve cash. The company now plans to spend $2.1 billion
and $2.7 billion in 2016 and 2017, from its original plans of $3.4
billion and $3.8 billion respectively.

PTTEP's underlying credit profile is supported by its adequate oil and
gas reserves, steady production operations and dependable, albeit
weakened, cash flows from its long-term gas sales contracts with PTT
Public Company Limited (PTT, Baa1 stable). The senior unsecured rating
and issuer ratings factor in one notch of uplift which reflects our
expectation of support from PTT, its parent company and the buyer of some
80% of its sales volume, in a distress situation.

The stable outlook reflects the strong level of support from its parent
PTT and the Thailand government, as well as the expectation that the
company will fund future acquisitions with an appropriate level of
capital structure to maintain its fundamental credit profile.

Upward rating pressure in the next 12-18 months is limited, given the
significant decline in operating cash flows and substantial development
risks faced by PTTEP. Positive rating momentum may emerge if the company
reduces its debt leverage, such that its adjusted debt-to-proved
developed reserves falls below $6/boe, or if its RCF-to-adjusted debt
ratio exceeds 70%. The latter result may be achieved through successful
project developments that would lead to additional reserves and growth in
production volumes.

Any negative pressure on Thailand's sovereign or PTT's rating will result
in negative pressure on PTTEP's ratings.

Downward rating pressure will also emerge if PTTEP further engages in
material acquisitions that increase its level of development risk, or if
the company invests in assets which are not immediately accretive to cash
flow, resulting in: 1) cash and cash equivalents falling below $1.5
billion; 2) a net debt-to-proved developed reserves ratio consistently
higher than $8/boe; 3) an RCF-to-adjusted debt ratio of less than 50%;
or 4) an adjusted debt-to-average daily production of more than $19,000
on a sustained basis.

The principal methodology used in these ratings was Global Independent
Exploration and Production Industry published in December 2011. Please
see the Credit Policy page on www.moodys.com for a copy of this
methodology.

PTT Exploration and Production Public Company Limited is engaged in the
exploration and production of crude oil, condensate and natural gas.
Established by the Petroleum Authority of Thailand (which is now PTT) in
1985 as part of a national energy strategy, it is now a listed company,
with PTT retaining a 65.29% stake.