สำนักข่าวหุ้นอินไซด์( 15 พฤษภาคม 2569)-----Fitch has affirmed PTT Exploration and Production Public Company Limited's (PTTEP) Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BBB+' with a Negative Outlook. Fitch has also affirmed at 'BBB+' the senior unsecured rating and the rating of the US dollar notes issued by PTTEP Treasury Center Company Limited and guaranteed by PTTEP.

Fitch equalises the IDR of PTTEP with that of its largest shareholder, PTT Public Company Limited (PTT, BBB+/Negative). We assess the parent as having 'High' strategic and operational incentives to support PTTEP under our Parent and Subsidiary Linkage (PSL) Rating Criteria. The Negative Outlook on PTTEP is aligned with that on PTT, whose Outlook in turn reflects that of the Thailand sovereign (BBB+/Negative) under our Government-Related Entities Rating Criteria.

PTTEP's Standalone Credit Profile (SCP) of 'bbb' is supported by its strong financial profile, geographical diversification outside Thailand, and higher exposure to gas sales with greater revenue stability than liquids. These factors are counterbalanced by PTTEP's proved reserves and its lower reserve life compared with more highly rated peers.

Key Rating Drivers
'High' Strategic Incentive: Fitch assesses PTT as having strategic incentives to support PTTEP, the sole and flagship upstream arm of PTT's integrated oil and gas business. PTTEP's gas production accounts for 82% of the Gulf of Thailand's gas output, which is critical for Thailand's energy security given the country's high gas dependence of about 50%. PTTEP's financial contribution to PTT is 'High', accounting for about 60% of PTT's consolidated EBITDA and about 25% of total assets in 2025.

'High' Operational Incentive: PTT's operational incentive to support stems from PTTEP's integral position in its value chain. PTTEP supplies a significant portion of feedstock for the parent's gas separation plants and gas-fired power plants. Management and brand overlap are 'High', with regular rotation of board members and senior management between PTTEP and other PTT subsidiaries. PTTEP's strategy is highly integrated with PTT's overall direction.

'Low' Legal Incentive: PTT's legal incentives to support are 'Low', as the parent does not guarantee PTTEP's debt. In addition, PTT's outstanding public bond issuance does not include cross-default provisions that extend to PTTEP.

Financial Profile Remains Strong: We expect EBITDA net leverage to rise but remain strong at around 0.2x-0.5x over 2026-2028 (2025: 0.1x), a conservative level for PTTEP's 'bbb' SCP. The higher leverage will be driven by elevated capex of about THB162 billion per annum in 2026-2027 (2025: THB121 billion), which will underpin negative free cash flow and increase net debt to about THB96 billion by end-2027 (end-2025: THB13 billion). Net debt then stabilises in 2028 as capex eases to THB126 billion.

Production Growth Continues: We project sales volumes to grow at about 6% per year over 2026-2028, driven by new and recently acquired projects. We forecast volumes to rise to 549 million barrels of oil equivalent per day (mboepd) in 2026, 570mboepd in 2027 and 606mboepd in 2028, from 510mboepd in 2025. Growth will mainly come from the 2026 full-year contributions from MTJDA Block A-18 (acquired in July 2025), its additional Sinphuhorm stake (April 2025), Algeria Touat (September 2025) and Malaysia SK408 (December 2025).

EBITDA Peaks in 2026: We expect EBITDA to rise to about THB223 billion in 2026, from THB188 billion in 2025, on volume growth and higher product prices, before stabilising at about THB190 billion-THB200 billion in 2027-2028. The stabilisation will result from continued volume growth offsetting the gradual decline in our oil price assumption to USD65/barrel (bbl) in 2027 and USD60/bbl from 2028, from our forecast of USD87/bbl in 2026.

High Gas Sales; Low Costs: PTTEP's share of gas sales was high at 72% in 2025. Prices were mostly aligned to trailing six- to 12-month average crude prices, supporting greater EBITDA stability than in peers with higher exposure to liquids. We expect PTTEP's unit operating costs to remain competitive against APAC upstream peers through the forecast horizon, at USD30-32 barrels of oil equivalent (boe).

Shorter Reserve Life: The company's 1P reserves rose to 1.84 billion boe by end-2025 (end-2024: 1.64 billion boe) and reserve life increased to 6.9 years (2024: 6.4 years) due to the 2025 M&A programme. Nevertheless, its reserve life remains shorter than higher-rated peers. Fitch expects PTTEP to slow M&A and focus on monetising its recently acquired assets, targeting a reserve life of above five years. We therefore expect reserves to decline to below 2.0 billion boe.

Manageable Middle East Risk: We view PTTEP's Middle East risk exposure as manageable despite the Iran conflict and Strait of Hormuz disruption, as the company's Oman-based production bypasses the strait. A prolonged disruption would benefit EBITDA due to higher oil and gas prices.

Peer Analysis
PTTEP's rating equalisation with PTT can be compared with that of Binh Son Refining and Petrochemical Joint Stock Company (BSR, BB+/Stable) and Hindustan Petroleum Corporation Limited (HPCL, BBB-/Stable), whose ratings are aligned with the credit profile of their parents, Vietnam National Industry - Energy Group (PVN, BB+/Stable) and Oil and Natural Gas Corporation Limited (ONGC, BBB-/Stable), respectively, under Fitch's PSL Rating Criteria.

Fitch believes PVN has high strategic and operational incentives to support BSR, which supplies about 35% of Vietnam's transportation fuel needs and off-takes around 45% of PVN's crude production.

ONGC has high strategic incentives to support HPCL, as the subsidiary enhances ONGC's downstream integration, reducing cash flow volatility against pure upstream peers, and also imports crude oil to meet India's energy needs. HPCL is a key customer for ONGC's crude production and the refinery throughput of ONGC's other refining subsidiaries, driving high operational incentives.

We view ONGC and PT Pertamina Hulu Energi (PHE, BBB/Negative) as PTTEP's close peers with 'bbb' SCPs. ONGC is India's largest oil and gas producer, and is vertically integrated across upstream, refining and petrochemicals. Its SCP reflects a larger production scale and reserve base, offset by India's lower operating environment score. ONGC's IDR of 'BBB-' is constrained below the 'bbb' SCP by India's Country Ceiling. PHE, Indonesia's largest exploration and production company, has larger scale than PTTEP. However, PTTEP's credit profile benefits from a higher share of gas in total output, which reduces earnings volatility, and a more geographically diversified asset portfolio.

Fitch’s Key Rating-Case Assumptions
Fitch's Key Assumptions Within Our Rating Case for the Issuer

- Benchmark Brent crude at USD87/bbl in 2026, USD65/bbl in 2027 and USD60/bbl from 2028 onwards

- PTTEP's gas selling prices at USD5.5 per million British thermal units (Btu) in 2026, USD5.3 per million Btu in 2027, and USD5.0 per million Btu in 2028

- Sales volumes to grow at a CAGR of about 6% over 2026-2028

- Capex of THB162 billion per year over 2026-2027, easing to THB126 billion in 2028

- Dividend payout ratio of 55% during 2026-2028

Corporate Rating Tool Inputs and Scores
Fitch scored the issuer as follows, using our Corporate Rating Tool (CRT) to produce the SCP:

Business and financial profile factors (assessment, relative importance): management ('bbb', lower), sector characteristics ('bbb', moderate), market and competitive positioning ('bbb', moderate), diversification and asset quality ('bbb', moderate), company operational characteristics ('bbb-', higher), profitability ('bbb+', moderate), financial structure ('aa+', lower), and financial flexibility ('a+', moderate).

The quantitative financial subfactors are based on custom CRT financial period parameters: 20% weight for the historical year 2025, 10% for the forecast year 2026, 20% for the forecast year 2027 and 50% for the forecast year 2028.

The governance assessment of 'good' has no impact.

The operating environment assessment of 'bbb-' has no impact.

The SCP is 'bbb'.

To derive the Long-Term IDR:

Application of Fitch's Parent and Subsidiary Linkage Rating Criteria results in an equalised approach.

RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade:

- Negative rating action on PTT;

- Significant weakening of PTT's incentives to support PTTEP.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade:

- We do not expect a rating upgrade as the Outlook is Negative. The Outlook will be revised to Stable if the Outlook on PTT's IDR is revised back to Stable, provided incentives to support PTTEP remain intact.

Liquidity and Debt Structure
PTTEP's liquidity is strong, supported by a near-net cash position at end-2025, with cash of THB78 billion against Fitch-adjusted debt of THB91 billion. Near-term maturities are limited to a THB7.5 billion domestic bond due in 2026. Fitch also expects cash generation to broadly cover capex over the next four years. Strong access to both domestic and international debt markets further supports liquidity. It had undrawn committed credit facilities of THB18.6 billion at end-2025.

Issuer Profile
PTTEP is a petroleum explorer and producer. It is the flagship upstream entity of PTT, the national oil company of Thailand. PTTEP has key projects in Thailand, Malaysia, Myanmar and the Middle East.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.

Public Ratings with Credit Linkage to other ratings
The rating and Outlook on PTTEP are equalised with that of PTT. A change in Fitch's rating or Outlook on PTT would automatically result in a change for PTTEP.

MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Click here to access Fitch's latest quarterly Global Corporates Sector Forecasts Monitor data file which aggregates key data points used in our credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included.

Climate Vulnerability Signals
The Climate.VS for PTTEP for 2035 is 50 out of 100. The high score reflects the long-term risk of waning fossil fuel demand, in addition to rising regulatory and climate pressure linked to the energy transition, and is broadly consistent with that of upstream oil and gas peers. These risks currently have a limited impact on PTTEP's rating, as demand for fossil fuels is still growing among emerging economies such as Thailand. PTTEP's production is also dominated by gas, which will play a key role in the transition away from coal and oil until renewable energy capacity ramps up.

PTTEP has announced a target to achieve net zero for scope 1 and 2 emissions by 2050, with intermediate targets of a 30% greenhouse gas intensity reduction by 2030 and a 50% reduction by 2040. Its energy-transition strategy includes investments in carbon capture and storage, greenhouse gas and methane reduction, blue hydrogen, and offshore wind. The company has a five-year budget of USD0.3 billion for these projects. Energy transition-related capex is relatively small in the medium term, as upstream-related capex continues to account for most of its total capex. PTTEP's strong balance sheet will provide a buffer for its transition-related investments.

Any potential future impact on the rating may differ from the illustrative rating impact in the Climate.VS framework, reflecting the evolution of Fitch's assessment of the global risks, action the entity might take to adapt to or mitigate the exposure, and any other relevant factors.

ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit https://www.fitchratings.com/topics/esg/products#esg-relevance-scores.