Philex Petroleum trims losses on assets sale

Philex Petroleum Corp. managed to reduce its losses in 2013 compared to the previous year after unloading a number of assets.

In a disclosure to the Philippine Stock Exchange, Philex Petroleum said its audited consolidated net loss reached P101.2 million for 2013 compared with a consolidated net loss of P1.086 billion in 2012.

The company said the lower net loss was mainly due to a gain on sale of Pitkin Petroleum Plc’s assets worth P246.6 million. The company also cited the provision of P966.9 million for impairment of assets in subsidiaries Brixton Energy and Mining Corp. and Forum Energy Plc.

On July 16, 2013, Pitkin completed the sale of all its interests in Vietnam American Exploration Co. LLC, a Delaware company, for a total cash consideration of approximately P2.1 billion. As a result of this transaction, Pitkin recorded a gain on sale of P213 million. As of Dec. 31, 2013, the company had consolidated cash of P2.6 billion which will help fund ongoing exploration activities and the selective acquisition of new projects.

Brixton, for its part, has finalized agreements for the assignment of Coal Operating Contract 130 (COC 130) in Zamboanga Sibugay to Grace Coal Mining and Development Inc. The underground coal mines in COC 130 were closed in September 2013 following the suspension of operations in Jan. 2013 due to low coal prices. The assignment is subject to the Department of Energy’s (DOE) approval.

Meanwhile, the DOE awarded Service Contract No. 75 (SC 75) effective Dec. 27, 2013, to the consortium of Philex Petroleum (the operator with 50 percent), PNOC Exploration Corp. (35 percent), and PetroEnergy Resources Corp. (15 percent). SC 75 covers Area 4 in the Northwest Palawan Basin offered in the fourth Philippine Energy Contracting Round.

The DOE awarded Service Contract No. 74 (SC 74) effective Aug. 13, 2013, to the consortium of Pitkin (the operator with 70 percent) and Philodrill Corp. (30 percent). SC 74 covers Area 5 the Northwest Palawan Basin offered in the same energy contracting round.

In January 2013, the DOE granted a two year extension until August 2015 to complete the exploration work program for the Second Exploration Sub-Phase of Service Contract 72 (SC 72) in Recto Bank. Forum has a 70 percent interest in SC 72.