PTT Exploration and Production Public Co. Ltd.

PTTEP aims to expand its LNG value chain spanning across upstream, liquefaction, shipping, and regasification facilities over the next decade. Its long-term strategy also aligns with Thailand's vision to become a regional LNG hub in Southeast Asia. Block 61 is the latest addition to PTTEP's existing LNG assets in Malaysia and Mozambique. PTTEP's disclosed capex plan is exclusive of investment requirement to maintain its reserve profile. Given the company's proven reserve (1P) is shy of eight years (seven years from existing assets plus estimated one-year addition from Block 61), PTTEP will need to constantly invest to replenish its reserve base, in our view. In addition, PTTEP will spend US$1.5 billion-US$1.7 billion per year in operating expenses in 2021-2023. In addition

...PTT Exploration and Production Public Co. Ltd.'s (PTTEP) acquisition of Block 61 is in line with the company's strategy to diversify its business and increase its exposure to liquefied natural gas (LNG). The acquisition of Block 61, a gas field in Oman, will add incremental high-quality cash flows, extend the company's reserve life, and provide some business diversity. It also provides revenue visibility backed by long-term gas sales contracts and exposure to a low-cost asset with favorable tax incentives. The revenue stability is underpinned by a 30-year gas sales agreement expiring in 2043 with embedded fixed price escalations and is subject to a 10-year extension with the Oman government at expiration. Gas from Block 61 is used domestically, while also boosting feedstock availability for Oman LNG. PTTEP aims to expand its LNG value chain spanning across upstream, liquefaction, shipping, and regasification facilities over the next decade. Its long-term strategy also aligns with Thailand's...

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