Moody’s deems PTTEP’s additional stake in Bongkot field ‘credit positive’

business February 05, 2018 17:10

By The Nation

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Last Wednesday, PTT Exploration and Production announced its US$750-million (Bt23.63 billion) acquisition of an additional 22.2-per-cent stake in the Bongkot gas field from subsidiaries of Royal Dutch Shell. 

Post-acquisition, the listed company’s ownership in the field – the largest in the Gulf of Thailand – will increase to 66.7 per cent.

The acquisition is credit positive for PTTEP because it will increase the upstream producer’s production volumes and reserves, according to a Moody’s credit-outlook statement on Monday. 

Additionally, the company does not require incremental borrowings to fund the purchase and Moody’s expects its credit metrics to remain strong, with retained cash flow/adjusted debt of 65 per cent this year, which is well above the ratings firm’s quantitative guidance of 25 per cent for its rating. 

PTTEP was in a net cash position with cash and cash equivalents, including short-term investments, of $4.5 billion at the end of last year, which will more than sufficiently fund the proposed acquisition, Moody’s added.