The rating on Thailand-based PTT Exploration and Production Public Co. Ltd. (PTTEP) reflects the company's strategic importance to PTT Public Co. Ltd. (PTT; BBB+/Stable/--) and the government of Thailand (foreign currency BBB+/Stable/A-2; local currency A-/Stable/A-2; axAA/axA-1). The rating also reflects PTTEP's strong domestic position and solid profitability and cash flow. The company's dependence on PTT for almost all its revenue, and its aggressive growth plans partly offset these strengths. PTTEP's other rating weaknesses are execution risk for the development of its substantial proven but undeveloped fields, and related heavy capital requirements. We assess PTTEP's stand-alone credit profile at 'bbb+'. We assess the company's business risk profile as "satisfactory" and its financial risk profile "intermediate," as our criteria define the terms.
