• 1Q26 net profit came in at THB11.83bn (-29% y/y, -32% q/q), hit by a large hedging loss of THB8.84bn

• Resilient core performance where ASP and EBITDA came in at USD46.02/boe (+1% y/y, +8% q/q) and THB54.36bn (+6% y/y, +19% q/q)

• Core 2Q-3Q26F ASP to fully reflect oil price hike 

• Maintain BUY with FY26F TP of THB174

Better-than-expected 1Q26. PTTEP reported 1Q26 net profit at THB11.83bn (-29% y/y, -32% q/q), better than our estimate and Bloomberg consensus. Yes, softer net earnings were hit by: i) net oil hedging loss of THB8.84bn, and ii) a forex gain of THB729mn. This is caused by a spike in oil prices after the breakout of Isarel/US-Iran war in Mar 2026.

However, core performance improved both y/y and q/q even though ASP is not fully reflected the sharp rise increase in oil prices (both Brent and Dubai) due to 1-2 month lagged time adjustment. Sales volume and ASP came in at at c.553kboed (+14% y/y, +3% q/q) and USD46.02/boe (-2% y/y, +5% q/q). Total EBITDA and normal profit came in at THB62.71bn (+6% y/y, +11% q/q) and THB19.94bn (+20% y/y, +24% q/q).

PTTEP’s performance by quarter

Source: PTTEP, DBS

1Q26 performance 

1. Production volume: Production registered at c.553kboed (+14% y/y, +3% q/q). The q/q drop was driven by lower crude from the Middle East and Africa. However, this is partly offset by higher gas nominations from PTT and higher contribution from the MTJDA projects.
2.  Realised prices: Dubai crude prices averaged at c.USD84/bbl (+9% y/y, +32% q/q), supported by a sharp spike in Mar after the war broke out in the Middle East. However, we expect greater liquid selling price to Dubai due to lagged time adjustment by 1-2 months. Hence, average selling price (ASP) came in at USD46.02/boe (+1% y/y, +8% q/q). Gas selling prices averaged USD5.81/mmbtu (-2% y/y, +1% q/q), reflecting the contractual price lag of up to 12 months.
3. Unit cost: Unit cost came in at USD27.9/boe (-9% y/y, -11% q/q), better than our estimate of USD30/boe. This is supported by normallising SG&A expenses, lower write off and exploration expenses, and less maintenance activities.
4. Extraordinary items: Extraordinary items in 1Q26 included a) net oil hedging loss of c.THB8.84bn, and b) a forex gain of THB729mn.

2Q-3Q26F to see full impact of oil price hike in ASP. As mentioned in the previous section, low 1Q26F ASP is due to 1-2 month lagged time adjustment to oil prices. We expect liquid to fully reflect higher oil prices in 2Q26F where we expect USD6-7/bbl discount of liquid price (vs USD11-12/bbl in 1Q26F, and USD2-3/bbl in normal situation). For gas price, we expect average gas price to remain flattish in 2Q26F and rise to c.USD5.90-5.95/mmbtu (up 1-2% q/q).

Based on management guidance in the analyst meeting last Thursday, we conservatively estimate 2Q26F net profit at THB23.23bn (+69% y/y, +16% q/q), assuming: i) production volume of c.560kboed (+11% y/y, +1% q/q); ii) average Dubai crude price of USD100/bbl and average gas selling price of USD6.0/mmbtu; iii) ASP of USD51.34/boe (+16% y/y, +12% q/q); iv) unit cost of USD30/boe (-3% y/y, +7% q/q); and v) a corporate tax rate of 45%

Our top pick. Maintain BUY. We maintain a BUY rating with an FY26F TP of THB174, based on a DCF valuation using a WACC of 11.69% and a terminal growth rate of 1%. We continue to favour PTTEP as our top pick in the energy sector, as it is a direct beneficiary of the oil price spike stemming from escalating tensions in the Middle East, while having limited exposure to regulatory risks such as electricity tariff cuts or the potential adoption of a new pooled gas pricing mechanism. In addition, PTTEP’s medium-term outlook remains solid, underpinned by resilient production growth of c.3.5% CAGR over 2026–2030F, stable gas selling prices, and an attractive expected dividend yield of around 5%.

Historical PE and PB band

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