West Philippine Sea explorer opens on Philippine index

MANILA, Philippines- An energy company exploring for oil in hotly disputed regions of the West Philippine Sea made a successful debut on the Philippine stock exchange on Monday, closing at seven times its listing price.

Philex Petroleum Corp. listed about 1.7 billion common shares at an initial price of 1.20 pesos (three cents) per share, then finished its first day of trading at 8.60 pesos per share, the exchange said.

The company and its subsidiaries have several oil and natural gas exploration contracts with the Philippines including one in the Reed Bank, an area within the country’s exclusive economic zone but also claimed by China.

Stock exchange chairman Jose Pardo hailed the listing, saying it was part of the government’s efforts to help energy firms get access to capital markets.

“Philex Petroleum’s listing is made attractive by its natural gas prospects, and its existing petroleum and coal contracts,” Pardo said without specifying the Reed Bank.

The Reed Bank is an area believed to be rich in oil and gas about 80 nautical miles (148 kilometres) from the western Philippine island of Palawan, well within the country’s 200-mile economic exclusion zone.

But China insists virtually all of the South China Sea belongs to it, including areas much closer to the landmasses of its Asian neighbours such as Reed Bank.

The Philippines has complained repeatedly this year that the Chinese military has become much more aggressive in asserting China’s claims to the area.

It said one of the first aggressive acts occurred in February when a Chinese naval vessel harassed a ship belonging to a Philex Petroleum subsidiary that was carrying out seismic explorations in the Reed Bank.

In its prospectus issued on August 31, Philex Petroleum acknowledged the territorial concerns but assured potential investors that the Philippine government would support it.

“The uncertainty of how these issues will be resolved may be a source of continuing risk to the operations,” the prospectus said.

“The company will continue to rely on government support and policy in addressing such geopolitical issues.”

Philex Petroleum is owned by Philex Mining, a major Philippine gold miner. It was “listed by way of introduction” at the stock exchange, a procedure that allows a company to go public without making an initial public offering.

Philex Petroleum is chaired by Filipino tycoon Manny Pangilinan, who also heads the country’s largest telecommunications company and its biggest power distributor, as well as major infrastructure and media firms.