Dennis Uy invests in PXP Energy

MANILA, Philippines — Davao-based businessman Dennis Uy is venturing into the upstream oil and gas sector with his investment in PXP Energy Corp.

Together with the subscription of Pangilinan-led Philex Mining Corp., PXP Energy is raising over P7 billion from a  private placement of shares.

In a disclosure to the Philippine Stock Exchange yesterday, PXP Energy said its board approved the subscription by Dennison Holdings Corp. in the company.

The Uy-led firm’s subscription amounts to 340 million shares at a price of P11.85 per share, or P4.03 billion in total, which is subject to the execution of a definitive subscription agreement.

The price per share represents a 20 percent discount to the 90-day volume weighted average price of the PXP shares.

So far, Dennison signed a non-binding term sheet today with PXP, details of which will be disclosed once the parties execute a definitive subscription agreement.

Meanwhile, the PXP Energy board also cleared the subscription by Philex Mining to 260 million shares also at P11.85 apiece, or a total of P3.08 billion, which is also subject  to the execution of a definitive subscription.

“PXP intends to use the proceeds it expects to raise from the private placement to Dennison and Philex to fund its exploration activities and other oil assets within the Philippines and in Peru, and to repay its advances from Philex,” it said.

Once finalized, Dennison will own a 14.78 percent interest in PXP Energy while Philex will raise its shareholding from 19.76 percent to 25.91 percent.

Other investors include Asia Link B.V. (16.73 percent), Social Security System (13.73 percent), First Pacific Co. Ltd. (8.23 percent), Two Rivers Pacific Holding Corp. (7.72 percent), and the balance is publicly held.

PXP Energy is an upstream oil and gas company with direct and indirect ownership in oil and gas exploration and production assets located in the Philippines, and indirectly owns an exploration asset located in offshore Peru.

In the Philippines, PXP Energy has been pushing for the lifting of the moratorium on exploration activities in the West Philippine Sea.

PXP Energy holds a 78.98-percent interest operating interest in Service Contract (SC) 72 or the contract to explore Recto Bank in the West Philippine Sea through London-listed Forum Energy Plc.

It also has a direct operating interest of 50 percent in SC 75 northwest Palawan.

PXP Energy’s latest unaudited financial statement showed it widened its net loss to P31.4 million in January to September from P23 million in the same period last year.

The wider net loss was attributed to higher depletion cost in Galoc and the decommissioning of Tara and Libro wells in Service Contract (SC) 14.