• Expect 3Q26F net profit at THB20.04bn (+58% y/y, -26% q/q), hit by softer volume and ASP as well as hedging loss

• ASP and EBITDA expected at USD51.75/boe (+20% y/y, -2% q/q) and THB61.67bn (+30% y/y, -10% q/q)

• Oil price to remain a swing factor in 4Q26F. Yet, core operation is lifted by stronger sales volume

• Maintain BUY with FY26F TP of THB174

Softer 3Q26F expected. We expect PTTEP to report a 3Q26F net profit of THB20.04bn (+58% y/y, -26% q/q). The softer performance is hit by: i) a 8% q/q drop in sales volume; ii) 2% q/q decrease in ASP, and iii) a net oil hedging loss of THB2.57bn (vs. a THB4.07bn gain in 2Q26).

Core performance is expected to improve y/y but weaken q/q as ASP inches down q/q in tandem with crude prices. Liquid selling prices this quarter are expected to be USD2-3/bbl discount over Dubai (versus the unusual USD4/bbl premium to Dubai in 2Q26). Total EBITDA and normalized profit are expected to come in at THB61.67bn (+30% y/y, -10% q/q) and THB22.61bn (+86% y/y, -7% q/q), respectively.

PTTEP’s performance by quarter

Source: PTTEP, DBS

3Q26F performance 

1. Production volume: Production is expected at c.525kboed (+3% y/y, -8% q/q). The q/q decrease was resulted from maintenance schedules of gas field in Gulf of Thailand and PTT’s GSP. Moreover, there are less crude loads in this quarter from Algeria.
2.  Realised prices: Dubai crude prices averaged at c.USD93/bbl (+33% y/y, -3% q/q), supported by a sharp spike since Mar after the war broke out in the Middle East. We expect average selling price (ASP) at USD51.75/boe (+20% y/y, -2% q/q). Gas selling prices averaged USD6.5/mmbtu (+12% y/y, +9% q/q), supported by retroactive adjustment of MTJDA A18-01 field after PSC awarded. Note that volume and gas price impact is estimated at c.4-5kboed and USD0.3/mmbtu respectively.
3. Unit cost: Unit cost is expected at USD30/boe (-5% y/y, +1% q/q), from higher operating expenses but offset by lower exploration and depreciation expenses.
4. Extraordinary items: Extraordinary item in 3Q26F includes an expected net oil hedging loss of c.THB2.57bn where total outstanding hedged volume stood at 14mn barrels to settle by end of 2026.

4Q26F outlook

Oil price remains a swing factor. volume and ASP to weigh on 3Q26F. We expect Brent to average USD95–105/bbl in 4Q26 (vs USD97/bbl in 3Q26). That is flat to higher q/q versus the mid-USD90s seen in 3Q26 and roughly 55% above the c.USD64/bbl average of 4Q25. Crude supply is coming back only slowly. Strait of Hormuz flows are still running at about 60–80% of normal, and Gulf OPEC+ producers are pumping well below quota. 

On 4 Oct, OPEC+ kept Nov targets unchanged and pushed back the capacity review that sets 2027 quotas, so there are few extra barrels to offset war-related shut-ins. On the other side, we expect three things to cap rallies: the G7/IEA release of up to 100mn bbl of emergency stocks over four months, improving convoy and bypass exports from the Gulf, and demand destruction with crude above USD100/bbl. We therefore see the risk premium shrinking into year-end rather than a renewed spike, with the curve staying backwardated. 

Tanker shortages, high insurance costs and longer shipping routes should keep the premium on seaborne crude high, and the Brent-WTI spread above USD10/bbl. Risks run both ways. A wider US-Iran conflict or Houthi disruption could quickly push Brent back to USD120+/bbl, while a lasting ceasefire and faster return of Hormuz flows could pull it back to the USD80s.

Despite oil price volatility, we expect production volumes to improve q/q in 4Q26F after operation resumption from maintenance activities at gas fields in the Gulf of Thailand as well as PTT’s GSP. We expect sales volume and average selling gas price at.440-450kboed and USD6.1-6.2/mmbtu.

Key beneficiary from Middle East tension, attractive valuation and robust yield. PTTEP remains our top pick. Maintain BUY. We maintain our 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 highest-conviction re-escalation long, supported by attractive valuations across key metrics, including P/E, EV/EBITDA, and sector-leading dividend yield (7.5x P/E, 3.0x EV/EBITDA, and 6.9% dividend yield vs. the sector average of 11.9x P/E, 8.3x EV/EBITDA, and 3.1% dividend yield), providing downside protection even if the war premium fades.