Philippine Daily Inquirer
11:52 pm | Friday, July 26th, 2013
Philex Petroleum Corp.’s first-half loss ballooned due to foreign currency conversion losses on the company’s dollar denominated advances from parent firm Philex Mining Corp.
In a disclosure to the Philippine Stock Exchange, the company reported a net loss of P225.2 million for the six months ended June 30, 2013, compared to a net loss of P80.5 million for the same period in 2012.
Sought for details, Philex Petroleum president and COO Carlos S. Pablo said in a phone interview that among several advances from Philex Mining, the most recent one was a $34.8-million (P1.43 billion) advance to acquire more shares in subsidiary Pitkin Petroleum Plc.
“Since we report in peso, we have to reflect the forex impact of the recent depreciation of the peso,” Pablo said.
On April 5, the company increased its stake in Pitkin from 18.46 percent to 50.28 percent.
The additional interest was acquired through the purchase of both new and existing shares at a price of $0.75 per share for a total consideration of $34.80 million (P1.43 billion).
On July 16 this year, Philex Petroleum subsidiary Pitkin completed the sale of all its interests in Vietnam American Exploration Company LLC, a Delaware company, for a total cash consideration of approximately P2.1 billion.
As a result of this transaction, the company will record a gain on sale of approximately P200 million in the second half of 2013.
On July 10, Pitkin signed the Service Contract for Area 5 in the Northwest Palawan basin. The Service Contract for Area 5 still needs to be signed by the Department of Energy.
The Environmental Impact Study to drill up to 10 exploration and 10 appraisal wells in Peru Block Z-38, in which Pitkin holds a 25 percent interest, was approved on June 19, 2013. Start of drilling of at least two wells is currently expected to commence by the end of the first half of 2014.
In February, the DOE announced that the bid group of Philex Petroleum, the operator, PNOC Exploration Corp., and PetroEnergy had won the bidding for the Area 4 Northwest Palawan block offered in the 4th Philippine Energy Contracting Round.
The Service Contract for Area 4 is still subject to final approval.
In January, the DOE granted a two-year extension to August 2015 to complete the exploration work program for the Second Exploration Sub-Phase of Service Contract 72 Recto Bank (SC 72).
Forum Energy Plc has a 70 percent interest in SC 72.
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