PXP Energy losses dwindle after dropping Peru project

PXP Energy Corp. saw its net loss narrow down by almost half to P15.7 million at end-September from P30.6 million in the same period of 2020 as a partnership for oil and gas exploration in Peru fizzled out.

The Manuel Pangilinan-led upstream petroleum firm said in a statement the unaudited results for January to September was due to a P1.66-billion full write-down of the carrying value of oil and gas assets related to Peru block Z-38.

Consolidated petroleum revenues almost tripled to P42.6 million from P14.4 million in the nine months to September last year.

This was partly attributed to a 90-percent surge in the sale price of Galoc crude, which reached $66.97 per barrel this year from $35.32 per barrel previously.

This gain was offset by a 4-percent reduction in output at the Galoc field, albeit a normal decline in production rate.

Nine-month crude oil output covered by Service Contract No. 14C-1 logged 429,549 barrels compared to 448,297 barrels in 2020.

On the other hand, consolidated costs and expenses rose by 82 percent to P96.0 million from P52.9 million due to higher petroleum production costs in Galoc and an increase in general and administrative expenses.

Last Sept. 17, PXP Energy’s subsidiary Pitkin Petroleum Ltd., where it has a 53.43-percent stake, along with its wholly owned subsidiary, Pitkin Petroleum Peru Z-38 SRL, entered into a settlement with partner KEI (Peru Z-38) Pty Ltd (“KEI”) and its wholly owned branch KEI (Peru Z-38) Pty Ltd Sucursal del Peru. The last two are part of Australia-based Karoon Energy group.

KEI last Oct. 4 paid $9.6 million in cash to Pitkin Peru in full and final settlement of all claims by Pitkin Peru and its associates in connection with Block Z-38.

KEI had not pursued further drilling at Block Z-38, which resulted in the voiding of their offshore petroleum concession last July.

With this, PXP Energy maintains focus on Service Contract No. 75, which covers an area in the Northwest Palawan petroleum basin. However, this area is affected by a territorial dispute with China.

—Ronnel W. Domingo