Philex Petroleum cuts losses to P15M in Q1

Philex Petroleum Corp., the upstream oil and gas unit of listed mining firm Philex Mining Corp., trimmed its consolidated net loss in the first three months of the year to P15 million compared to the P44.2 million loss posted in the same period last year.

The company attributed the lower net loss to the management’s continuing efforts to pare down expenses. The company has unloaded a number of non-performing assets beginning 2014 until late 2015.

Philex Petroleum reported a first quarter net loss attributable to equity holders of parent company amounting to P11.8 million. This was lower than the P20.4 million loss posted during the same period last year.

The firm’s cost reduction efforts  cushioned the company’s finances from the impact of lower petroleum revenues contributed by its subsidiary, Forum Energy Ltd. The latter has been suffering from the drop in world oil prices on top of a lower output from its service contract in the Galoc oil field.

Oil prices began falling drastically toward the end of 2014 and continues to languish amid a global glut and weak demand, according to industry reports.

To cope with the challenging oil price environment, Philex Petroleum officials earlier said the company would continue efforts to reduce operating expenditures through the rationalization of the company’s business structure and asset portfolio.

The firm said, however, it would remain active in exploration activities.

The company’s board of directors also approved last March 9 a change in company name to “PXP Energy Corporation.”

The change in corporate name and the amendment of the company’s articles of incorporation would be submitted to shareholders for approval at the annual stockholders’ meeting scheduled on May 17, 2016. It would still be subject to the approval of the Securities and Exchange Commission.

Philex Petroleum directly and indirectly owns oil and gas exploration and production assets located in the Philippines.

The company previously owned a 25 percent participating interest in an offshore block in Peru. It however placed the project under force majeure, which was approved by the Peruvian oil and gas regulator in 2014.

On Nov. 20, 2015, Philex Petroleum subsidiary, Pitkin Petroleum Plc., also said it had elected not to proceed with the exploration sub-phase 2 of Peru Block XXVIII. The oil and gas field located onshore was subsequently surrendered to the Peruvian government.

The firm also suffered difficulties from its drilling service contract 72, located northwest of Palawan, due to the Philippines’ territorial dispute with China.

Pitkin Petroleum also earlier announced it decided not to pursue its plan to take a 70-percent interest in service contract 6A (Octon block) in northwest Palawan. The company reassigned its participating interest there to its farm-out partners after completing the first phase of the project on Dec. 31, 2014.