PXP Energy raises P7.11-B funding for petroleum exploration

Published November 12, 2018, 10:00 PM By Myrna M. Velasco

https://business.mb.com.ph/2018/11/12/pxp-energy-raises-p7-11-b-funding-for-petroleum-exploration/

PXP Energy, the petroleum exploration unit of tycoon Manuel V. Pangilinan, will be raising P7.11 billion via private placement so it could beef up cash resources for its oil and gas exploration projects.

The company said it will be undertaking the capital-raising activity with Dennison Holdings Corporation, its newly minted partner which is a firm spearheaded by Davao businessman Dennis Uy.

PXP Energy emphasized that proceeds from the fund raising will bankroll “work programs under its service contracts with the Republic of the Philippines and/or other foreign countries.”

At the same time, PXP Energy indicated that it is “considering launching a stock rights offering to raise the balance of the funding for the work obligations under the service contracts.”

It must be culled that Dennison Holdings had earlier subscribed to the shareholdings of two Pangilinan-led firms – giving it beneficial ownership of 14.78 percent in PXP Energy; and increasing its share in Philex Petroleum to 25.91 percent.

The PXP Energy-Dennison Holdings tie up is expected leveraging on targeted petroleum exploration at Service Contract 72 of Recto Bank, a block straddling Northwest Palawan basin.

Beyond investments in the upstream petroleum sector, the two companies are also looking at expanding their partnership into other energy ventures.

Uy’s camp is offering the conglomerate of Pangilinan to join its planned liquefied natural gas (LNG) projects which it will be pursuing with China National Offshore Oil Corporation (CNOOC).

PXP Energy acknowledged that the planned LNG facilities would serve as a complementary venture “as it could provide an off-take agreement and a market for the gas that could be sourced and produced from Service Contract 72.”

Extended seismic data gathering as well as programmed drilling at the Recto Bank had been stalled since year 2013 because of the declaration of moratorium then at the diplomatically strained areas within the West Philippine Sea.

Under the Duterte administration, calls on moratorium lifting have been intensifying – but this is a matter yet to be decided firmly by the Department of Foreign Affairs.

A joint exploration framework is being pushed by both governments of the Philippines and China; and critical developments are anticipated during Chinese President Xi Jinping’s visit to the country this month.