Singapore Depository Receipts

Positive on oil prices? Here's a leading energy producer that could benefit

By Beansprout • 19 Jun 2023 • 0 min read

As a leading producer of natural gas and crude oil in Southeast Asia, PTT Exploration and Production (PTTEP) could stand to benefit if oil prices recover.


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This post was created in partnership with SGX. All views and opinions expressed in this article are Beansprout's objective and professional opinions. 


  • PTT Exploration and Production (PTTEP) is a leading producer of natural gas and crude oil in Southeast Asia. About 70% of its assets are in Thailand and other parts of Southeast Asia. The company’s petroleum production accounts for 62% of Thailand’s total domestic production volume in 2022. 
  • PTTEP has a competitive cash cost of US$15 per barrel of oil equivalent (BOE). With higher energy prices, its average selling price rose to US$53/BOE in 2022 from US$43/BOE in 2021, exceeding its average unit cost of US$28/BOE. 
  • PTTEP targets to grow its production volume by 6.3% annually on average from 2022-27. This is supported by its Proved Reserves (P1) lasting 6.8 years, and Proved Reserves + Probable Reserves (P1+P2) of 10.7 years as of December 2022.
  • PTTEP intends to reach net zero greenhouse gas emissions by 2050. It has set an interim target to reduce greenhouse gas emissions intensity by at least 30 percent by 2030 and 50 percent by 2040.

What happened?

PTT Exploration and Production (PTTEP) Singapore Depository Receipts was recently launched on the Singapore Exchange, and trades under the stock code SGX: TPED.

What this means is that retail investors in Singapore will be able to gain access to PTTEP in the same way that they are buying and selling a Singapore stock.

Let us find out more about what PTTEP does, and if it is worth adding this stock to your watchlist.

What you need to know about PTTEP (SGX: TPED)

#1 - PTTEP’s assets are predominantly in Thailand and the rest of Southeast Asia

PTT Exploration and Production (PTTEP) is involved in the exploration and production of petroleum, mainly natural gas, crude oil and condensate. It is the upstream arm of Petroleum Authority of Thailand (PTT), which holds 64% of PTTEP. 

The majority of PTTEP’s assets are in Thailand and other parts of Southeast Asia, which make up about 70% of the book value of assets as of March 2023. Outside of Southeast Asia, the company also has assets in Africa and the Middle East. 

Source: Company data


#2 - PTTEP has an average unit cost of US$28.4 per barrel of energy

On a unit-economics basis, PTTEP has a cash cost of about US$15 per barrel of oil equivalent (BOE). Including depreciation, depletion and amortization (DD&A), PTTEP’s unit cost increases to about US$29/BOE. 

PTTEP expects to maintain unit cost in the range of USD 27-28/BOE in 2023. In the long term, PTTEP targets to bring its unit cost for E&P down to below US$25/BOE.

Source: Company data


#3 - PTTEP’s proved reserves are expected to last 6.8 years

As of December 2022, PTTEP’s Proved Reserves (P1) is expected to last 6.8 years, while its Proved Reserves + Probable Reserves (P1+P2) could last 10.7 years. This would exceed PTTEP’s target to maintain a reserve to production ratio (R/P) of more than five years.

Proved Reserves are those quantities of petroleum which, by analysis of geological and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under current economic conditions, operating methods, and government regulations.

Probable Reserves are those additional quantities of petroleum obtained from an analysis of geoscience and/or engineering data similar to that used in the estimation of Proved Reserves but with less production possibility.

PTTEP reserves@2x.png
Source: Company data

What are the drivers of PTTEP?

#1 - Potentially higher oil prices in 2024 could translate to higher average selling prices 

The US Energy Information Administration (EIA) forecasts Brent crude oil spot price will average US$79 per barrel (bbl) in the second half of 2023 (2H23) and US$84/bbl in 2024. This represents an increase from the Brent crude oil price of US$77/bbl as of 16 June 2023. Higher oil prices could lead to higher average selling prices for PTTEP. 

Copy of PTTEP production forecast@2x(1).png
Source: US EIA


#2 - PTTEP aims to grow its average production by 5% per year sustainably

In the longer term, PTTEP’s production volume is expected to grow 6.3% CAGR from 2022-27. This would exceed its target of growing its average production by 5% sustainably. Correspondingly, US$29.1 bn in E&P budget has been earmarked. 

PTTEP production forecast@2x.png
Source: Company data

#3 - PTTEP aims to achieve net zero greenhouse gas emissions by 2050

PTTEP intends to reach net zero greenhouse gas emissions by 2050. 

It has set an interim target to reduce greenhouse gas emissions intensity by at least 30 percent by 2030 and 50 percent by 2040, compared to the 2020 base year. 

It intends to achieve its targets through executing on its greenhouse gas emission reduction plan, and accelerating on carbon capture & storage (CCS) projects.

What are the risks of PTTEP?

Apart from the risks relating to Thai SDRs, one of the key risks relating to PTTEP would be the impact from weaker gas prices in the near term. 

#1 - Weaker gas prices in the near term

PTTEP’s gas price formulas are partially linked to oil prices with reference to average historical prices ranging from the past 6 to 24 months. 

Based on the company's forecasts as June 2023, the average gas price for full year 2023 is estimated to be US$6.0/MMBTU, lower than the average of US$6.3/MMBTU in previous year.

Weaker gas prices in the near term could lead to a decline in the product price of PTTEP and impact its profitability. 

How can investors gain access to PTTEP?

The PTTEP SDR trades on the SGX under the stock code TPED.

SDRs trade on the Singapore Exchange in Singapore Dollars (SGD). The same trading hours for the Singapore Exchange apply to the trading of SDRs, which is 9 am to 5.16 pm SGT currently. 

SDRs are tradable by all investor types, as they are classified as Excluded Investment Products (EIP). While this product is available to anyone with a basic understanding of financial instruments, do make sure that you are aware of the product characteristics and risks before you invest in it. 

You will be able to buy Singapore Depository Receipts directly through a stock trading platform which offers trading on the Singapore Exchange. 

Click here to read our earlier article explaining what are Singapore Depository Receipts. 

For a more detailed analysis on PTTEP, download the full report here.

You can also find more resources at the SGX product page.

This article was first published on 19 June 2023 .

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