Maybank Investment Bank has maintained its BUY call on PTTEP but has cut its TP to THB158 from THB179 as it lowered the oil price assumption in 2025E and beyond.

Key concern are OPEC+ production increase and the base case scenario is for the Middle East conflict to remain contained. Long-term volume growth is also a challenge for PTTEP. However, despite these headwinds, we think its valuation remains attractive at 7/8x P/E with a generous 7/6% dividend yields in 2024/25E. For Thailand's big-cap energy, we prefer PTT (PTT TB,
CP THB34, BUY, TP THB40).

Lower oil price assumptions
The house maintains its Brent oil price assumption at USD82/bbl in 2024E but cut 2025E to USD70/bbl (from 75) with 2% annual inflation. The base-case assumption is OPEC+ unwinding its output reduction at a more gradual pace than is currently planned. If OPEC+ maintains its current plan (unwinding in 12mths), Maybank said it sees a potential USD10/bbl downside risk to oil price. A bullish case for oil is OPEC+ postponing its output increase which could push crude up to USD75/bbl. However, we view the Middle East-wide conflict (which could push oil prices to USD90/bbl or higher) as unlikely to have a large impact. If the conflict is contained to Israel-Iran, the house thinks any potential disruption to Iran's oil output (c.3.3mbd now) can
be readily made up by nearly 6mbd of spare capacity.

LT volume growth remains a key concern
Maybank said it expects management may have to revise its long-term volume growth, especially as several key projects (Mozambique LNG, Lang Lebah) have yet to achieve FID (final investment decision). This would jeopardise the production outlook for 2028E and beyond and we're 7% below guidance in that year.