UPDATE 1-Thai PTTEP Q1 beats market, concerns on Cove bid

Wed Apr 25, 2012 2:03am EDT

Related Topics

* Q1 net profit jumps over 60 pct on higher oil prices

* Strong earnings to continue in 2012

* Concerns about capital raising weigh down stock

By Khettiya Jittapong

BANGKOK, April 25 (Reuters) - Thailand's PTT Exploration and Production Pcl (PTTEP), which is competing with Royal Dutch Shell to buy Cove Energy, reported profit that beat analysts' expectations as global oil prices rose.

Thailand's second-most valuable company posted a more than 60 percent jump in first-quarter net income on Wednesday, but its stock price was dragged down by speculation that PTTEP may consider issuing more shares to fund its bid for the Mozembique-focused energy explorer.

Shell agreed on Tuesday to acquire Cove Energy for 1.12 billion pounds ($1.8 billion), raising its offer to match PTTEP's. Thailand's top oil and gas explorer said it was currently considering its options.

The Bangkok-based company, valued at $19 billion, has been aggressively seeking to acquire more overseas oil and gas assets to boost reserves and earnings.

PTTEP, which is involved in more than 40 oil and gas exploration and development projects, may deliver strong earnings growth this year as global oil prices rise and output increases, analysts say.

"The first-quarter results showed strong core operations for PTTEP, a result of an increase in global crude prices, enabling PTTEP to have more room to adjust selling prices," said Parin Kitchatornpitak, an analyst at KTB Securities.

The broker has raised in its 2012 profit forecast for PTTEP to a record high of about 60 billion baht ($1.9 billion).

PTTEP, a subsidiary of state-controlled PTT Pcl, reported profit of 18.3 billion baht ($590 million) in the January to March period, up from 10.97 billion a year earlier.

That beat an average forecast of 16 billion baht in a survey of 10 analysts by Reuters.

First-quarter revenue rose 24 percent, with PTTEP's selling prices during the period averaging $64.79 barrel of oil equivalent versus $49.36 a year earlier.

Shares of PTTEP climbed as much as 1.4 percent to a three-week high of 180 baht after the earnings announcement.

As of 0425 GMT, the stock erased its earlier gain and was down 0.6 percent at 176.50 baht, while the broad market was 0.09 percent lower.

According to Thomson Reuters StarMine, 10 of 23 analysts rate PTTEP "buy" or "strong buy," with nine advising "hold" and four saying "sell" or "strong sell".

PTTEP said it expects to start producing oil at the Montara field in Australia in the fourth quarter.

In Myanmar, its unit PTTEP International has ceased exploration at the M7 project since Feb. 1.

In the Gulf of Thailand, the Bongkot South field has started test runs and is delivering 50 million-70 million cubic feet per day (mcfpd) of natural gas and 3,000-4,000 barrels per day of condensate.

PTTEP expects the gas production rate will ramp up to 320 mcfpd and 9,000 bpd of condensate within the second quarter.

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