PXP net loss hits P30.6M on exploration disappointments

The Manuel Pangilinan-led group’s petroleum development unit saw a slightly lower core net loss of P30.6 million for the nine months ending September as existing assets continued to decline while prospective assets remained in limbo.

In the same period of 2019, PXP Energy Corp. suffered a consolidated net loss of P31.2 million.

Continuing losses were blamed on the natural decline in production of crude oil in the Galoc oil field, coupled with the slump in prices caused by the COVID-19 pandemic.

Additionally, the company still could not resume work in their promising concession at the Recto Bank, which at that time remained under force majeure as talks between Manila and Beijing on possible joint development showed zero results.

From January to September, consolidated revenues dropped 72 percent year-on-year to P14.4 million from P51.1 million previously as output declined further and prices of crude oil came crashing.

Field production in Galoc under Service Contract (SC) No. 14C-1, shrank by 35 percent to just 448,297 barrels this year.

At the same time, crude oil sales fell by 44 percent as international prices crashed, especially in the early months of the pandemic.

The very same depletion of output, however, drove down consolidated costs and expenses by 41 percent to P52.9 million from P94.2 million.

PXP Energy provided for a P20.2 million in impairment of assets considering the lower-than-expected future returns in Galoc.

Early in the fourth quarter, PXP Energy received from the Department of Energy (DOE) a “resume-to-work” notice related to the Palawan block under SC 75 and the Recto Bank under SC 72.

These have been under force majeure for as long as six years. The Pangilinan group had asked the DOE to lift the moratorium on exploration activities as early as 2018 when the Philippines and China announced a memorandum of understanding to explore ways for joint development of resources in disputed territories in the West Philippine Sea. INQ