PTT Exploration & Production

PTT Exploration & Production Plc (PTTEP) 
 

With the benefit of high oil prices, PTTEP’s earnings momentum should gather pace as volume grows, ASP rises, and costs stay stable. The share price, however, may see only limited upside with the looming prospect of a capital increase for the acquisition of COVE Energy. We maintain our Trading Buy call, expecting market earnings upgrades on better margins. Near-term drivers are the higher ASP from gas price adjustments, rising oil prices, and increased volume in 2H12. Our target price of THB195 based on a 10% discount to DCF is maintained.