Philex Petroleum incurs P225-M loss

27 July 2013

Philex Petroleum Corporation incurred a net loss of P225.2 million for the first half of 2013, compared to a net loss P80.5 million for the same period last year.

In a disclosure to the Philippine Stock Exchange, the firm said the increase in net loss was mainly due to foreign currency conversion losses on its dollar denominated advances from parent company Philex Mining Corporation.

Last July 16, subsidiary Pitkin Petroleum Plc. completed the sale of all its interests in Vietnam American Exploration Company LLC, a Delaware company, for a total cash consideration of approximately P2.1 billion.

As a result of this transaction, Philex Petroleum said it will record a gain on sale of approximately P200 million in the second half of 2013.

On July 10 2013, Pitkin signed the Service Contract for Area 5 in the Northwest Palawan basin. The Service Contract for Area 5 is still subject to the signature of the Department of Energy.

The Environmental Impact Study to drill up to 10 exploration and 10 appraisal wells in Peru Block Z-38, in which Pitkin holds a 25 percdnt interest, was approved on June 19, 2013. Start of drilling of at least two wells is currently expected to commence late in the first of half of 2014.

Philex Petroleum had increased its shareholding in Pitkin from 18.46 percent to 50.28 percent last April. The additional interest was acquired by the purchase of both new and existing shares at a price of US$0.75 per share for a total consideration of US$34.80 million (P1.43 billion).

In February 2013, the Department of Energy announced that the bid group of Philex Petroleum (Operator), PNOC Exploration Corporation, and PetroEnergy had won the bidding for the Area 4 Northwest Palawan block offered in the 4th Philippine Energy Contracting Round. The Service Contract for Area 4 is still subject to signature.

In January 2013, the Department of Energy granted a two year extension to August 2015 to complete the exploration work program for the Second Exploration Sub-Phase of Service Contract 72 Recto Bank ("SC 72"). Forum Energy Plc has a 70 percent interest in SC 72. (James A. Loyola)