October 25, 2018 | 12:02 am
PXP ENERGY Corp. reported a net loss
of P31.4 million in nine months to September this year, 37% bigger than
year-ago’s P23 million consolidated losses attributable to equity holders of
the parent firm as revenues lagged behind the cost and expenses during the
period.
In a disclosure to the stock
exchange, the upstream oil and gas exploration company said its reported
consolidated net loss reached P49.1 million, up 43% from P34.3 million a year
ago “due to higher depletion cost and decommissioning, other charge of P11.9
million, and a provision for income tax of P1.6 million.”
The losses were offset by a foreign
exchange gain of P30 million during the period, the company added.
PXP Energy directly and indirectly
owns oil and gas exploration and production assets located in the Philippines,
and indirectly owns an exploration asset located in offshore Peru.
Consolidated petroleum revenues
reached P106.1 million, higher by 38.3% from P76.7 million a year ago
“resulting from the 38% improvement in crude oil price and the 1% increase in
volume,” the company said.
However, consolidated cost and
expenses grew by 43.6% to P173.7 million from P121 million because of the
higher depletion cost in Galoc and the decommissioning of Tara and Libro wells
in Service Contract (SC) 14, the company said, referring to the areas where it
has an agreement with the government to explore.
On Wednesday, shares in the company
rose 1.11% to close at P16.40 each.
Among the highlights during the
nine-month period is the farming-in agreement between Karoon Gas Australia Ltd.
of a 35% interest in offshore exploration Block Z-38, Tumbes Basin Peru, to
Tullow Peru Ltd., a wholly owned subsidiary of Tullow Oil plc.
Pitkin Petroleum Peru Z-38 SRL, a
wholly owned subsidiary of Pitkin Petroleum Ltd. (PPL), holds a 25%
participating interest in Peru Block Z-38. PXP Energy holds a 53.43% interest
in PPL. KEI (Peru Z38) Pty Ltd., Sucursal del Peru holds a 40% interest in the
offshore exploration joint venture.
Under the agreement, Tullow will
acquire a 35% interest in the block by funding 43.75% of the cost of the first
exploration well, which was capped at $27.5 million.
Tullow is also to pay $2 million
upon completion with a further $7 million payable upon declaration of
commercial discovery and submission of a development plan to Perupetro.
The agreement remains subject to
licensing conditions and regulatory approvals.
In September, PXP Energy said an
exploration block in Peru in which subsidiary PPL has participating interest
had been removed from its force majeure status after recent changes in the
hydrocarbon law in the foreign country.
It said Karoon, an international oil
and gas exploration company with projects in Australia, Brazil and Peru, had
been actively working with the Peruvian authorities and considers the changes
as a step forward for exploration in Peru.
In the Philippines, PXP Energy said
it would take guidance from the government on the future activity in SC 72 and
SC 75 through Forum Energy Ltd., a 78.98% owned subsidiary.
The company said it is mindful that
the Malampaya gas resource, which supplies about 40% of Luzon’s power
requirements, could be exhausted within the next decade, thus the resumption of
exploration in SC 72 is of national interest.
PXP Energy is hopeful that the force
majeure imposed on SC 72 and SC 75 would be lifted by the Department of Energy
soon for the company to be able to resume exploration works in the two service
contracts. — Victor V. Saulon
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