PXP Energy absorbs P297.2-M loss as wells run dry

PXP Energy Corp. saw its consolidated net loss balloon to P297.2 million in 2019 from P96.4 million in 2018 with the loss of revenue streams such as crude oil production wells in Palawan.

The upstream firm said consolidated petroleum revenues dipped by 33 percent to P72.5 million from P107.9 million. This was attributed to “slightly lower output and 15-percent drop in crude oil price in SC 14C-1 Galoc and the plug and abandonment of SC 14A Nido and SC 14B Matinloc production wells.”

For the same reasons, consolidated cost and expenses were 14-percent lower at P190.6 million from P221.4 million brought about by lower depletion costs in SC 14C-1 Galoc, following the decline in output and the cessation of operatio­nal costs in SC 14A Nido and SC 14B Matinloc.

The PXP group’s general and administrative expenses were slightly higher.

Further, PXP chalked up a foreign exchange loss of P12.4 million compared to a forex gain of P18.7 million in 2018 due to a lower dollar-to-peso exchange rate.

In 2019, PXP set aside P198.8 million for impairment of assets and goodwill, mainly for the lower-than-expected future returns in Galoc.

PXP is also facing tough luck abroad as an affiliate involved in a drilling project off Peru found no oil and little gas.

Citing a drilling update from partner Karoon Energy Ltd., PXP Energy said the exploration well dubbed Marina-1 drilled at the Block Z-38 Tumbes Basin reached a depth of 3,021 meters. Results, however, showed the drilling “encountered thin water bearing sands with no oil and only minor gas shows.”

Karoon said data collection was wrapping up and that the well “will be plugged and abandoned.”

While several potential reservoirs of oil and gas were found at Marina-1, these were “water wet and provide no prospectivity.” The Australia-listed project operator said no further drilling was planned for Block Z-38.

The consortium had believed the Marina prospect contained an estimated 256 million barrels of crude oil.

Pitkin Petroleum Ltd., which is 53.43-percent owned by PXP Energy, holds a 25-percent participating interest in Block Z-38.