PXP Energy Corp. has received an initial P770.25 million from Philex Mining Corp. as part of the P3-billion subscription of common shares, as PXP pushes for the resumption of exploration for natural gas in Palawan.
Last October, PXP announced it had signed a definitive subscription agreement with Philex, relating to 26 million common shares at P11.85 a share for a total of P3.08 billion.
This deal with Philex coincide with a similar agreement with Davao-based businessman Dennis Uy’s Dennison Holdings Corp., concerning a subscription to 340 million common shares in PXP at a total of P4.03 billion.
PXP said in a regulatory filing it had agreed with Dennison to reschedule and move forward the full payment of the subscription price, net of downpayment, to not later than March 31, 2019.
“Dennison shall also pay a downpayment equivalent to 1 percent of the total subscription price on or before Jan. 7, 2019,” PXP said.
“In the event Dennison fails to pay the entire subscription price on or before 31 March 2019, the entire amount of the downpayment shall be forfeited in favor of PXP and the subscription agreement shall be terminated at the option of PXP,” the company added.
With the subscription, Dennison will have a total ownership interest in PXP of 14.78 percent, entitling the holding firm to at least one PXP board seat.
According to PXP, it intends to use the expected proceeds to fund its exploration activities and other oil assets within the Philippines and in Peru, as well as to repay its advances from Philex.
Last September, PXP Energy said its affiliate involved in Peru’s Block Z-38 expects to be able to finally start exploration work following favorable changes in Peruvian law.
Citing a disclosure made by Karoon Gas Australia Ltd. at the Australian Stock Exchange, PXP Energy said force majeure declared on Block Z-38 had been lifted thanks to changes to hydrocarbon laws in Peru.
PXP Energy owns 53 percent of United Kingdom-based Pitkin Petroleum Ltd., whose subsidiary Pitkin Petroleum Peru Z-38 SRL has a 25-percent participating interest in the project.
Also, earlier this month, Forum (GSEC 101) Ltd.—operator of Service Contract No. 72 in Northwestern Palawan where PXP has a 53-percent economic interest—has asked the Department of Energy to lift a moratorium on exploration activities in areas under territorial dispute.