Frontier Oil IPO gets green light
The Securities and Exchange Commission has approved an initial public offering worth as much as P2.2 billion planned by exploration firm Frontier Oil Corp., which aims to fund drilling campaigns that would transform the firm’s business from exploration to an oil and gas production.
Based on documents from the SEC, Frontier Oil was given the go signal to offer 883.626 million common shares for as much as P2.50 per share, bringing to public hands about 33 percent of the company’s outstanding shares after the IPO.
“This will certainly bolster the confidence of the shareholders and the prospective investors in the company in what we can do to develop the huge potential of the Philippines’ oil and gas resources,” FOC chief executive Kristoffer Fellowes said in a press statement.
Frontier Oil expects the offering to run from Nov. 25 to 29, and listing on the Philippine Stock Exchange on Dec. 9.
In its Twitter account on Friday, Frontier Oil said it’s hoping to get approval from the PSE next week. The company plans to list its shares on the PSE’s main board under the ticker “FOC”.
Documents showed that Frontier Oil was planning to use bulk of the proceeds amounting to P1.55 billion for the Calauit Field in service contract 50. Another P256.87 million was earmarked for Nassipping Field in SC 52 and P202.87 million for working capital.
Frontier Oil holds interests and rights to interests in four of the 26 active exploration service contracts (SCs) currently in place with the Department of Energy, but the two most mature or production-ready projects are SC 50 and 52.
SC 50 lies in the country’s most prospective oil and gas basin in offshore northwest Palawan. This hosts the Calauit Field, which was discovered in 1991 by Petrocorp Exploration Philippines Ltd.
SC 52 is an onshore block in the Cagayan Basin at the northern-most part of Luzon. The prospectus said the presence of gas in the basin was proven by previous drilling conducted from 1956 to 2008. Out of the 30 wells drilled, three turned out to be discoveries, most notable of which was the San Antonio well of PNOC-EC, which produced 3.5 billion cubic feet of gas that in turn powered a one-megawatt plant from 1994 to 2008 in Echague, Isabela. SC 52 hosts the Nassipping gasfield, which has contingent gas resources in place, the prospectus said.
The oil exploration firm has mandated local investment houses Philippine Commercial Capital Inc. and Unicapital Inc. to underwrite the stock debut.
The biggest shareholders of Frontier Oil are Panther Petroleum Ltd. (21.85 percent); BioProspect Ltd. (18.02 percent), Middle Petroleum Services Ltd. (9.28 percent), Phil Resource Invest Pte Ltd. (7.77 percent), Aytek Co. Inc. (7.35 percent) and Frontier Investment Ltd. (6.46 percent).
The company is chaired by Filipino fund manager Astrolito Romulo Del Castillo while the president is Kristoffer Kenneth Fellowes, who has managed several oil and gas exploration projects. He assisted Frigstad Engineering Ltd., a Norweigian company, in brokering the building of a $650-million oil rig in China, the world’s largest ultra-deepwater semi-submersible oil rig. Doris C. Dumlao
