PXP Energy posts wider net loss in January-June

MANILA, Philippines — Listed upstream oil and gas firm PXP Energy Corp. reported a  higher net loss in the first six months due to the significant drop in oil prices and revenue amid the pandemic.

In a disclosure to the Philippine Stock Exchange, PXP Energy said its consolidated net loss widened to P56.3 million in the fist six months from P17.9 million in the same period last year.

The company attributed the drop to the substantial decrease in oil revenues and impairment loss in Service Contract (SC) 14C-1 Galoc, which hosts the country’s largest oil producing oil field.

PXP Energy reported an 88 percent drop in consolidated petroleum revenue to P6.1 million  in the first six months  from P51.4 million a year ago.

It attributed the decline to the 66 percent drop in output following normal decline rate in field production.

Revenues also reeled from the 62 percent slump in crude oil prices in SC 14C-1 Galoc due to substantially lower global demand amid the COVID-19 pandemic.

In terms of consolidated costs and expenses, the company registered a 46.7 slide from P86.2 million to P39.5 million brought about by lower depletion cost in SC 14C-1 Galoc, following the decline in output.

The group’s general and administrative expenses were also slightly lower year-on-year.

Under other income/charges, PXP Energy said the provision for impairment of assets amounted to P20.2 million due mainly to the lower-than-expected future returns in SC 14C-1 Galoc.

The firm attributed the lower-than-expected  future returns to the recent crash in global crude oil prices and the cessation of operation for Galoc Field on September 24.

Last May, operator Galoc Production Company received  a notice of termination from Rubicon Offshore International, the owner of the floating production storage and offloading (FPSO) vessel Rubicon Intrepid.

Despite the suspension, GPC and its partners – including PXP Energy – are still eyeing to restart oil production once the oil market environment improves.

Recently, the Department of Energy (DOE) recently granted PXP Energy’s request, on behalf of the joint venture partners, to impose force majeure over SC 74 Linapacan Block.

The SC 74 consortium sought for a suspension for nine months starting March 13 to Dec. 12 due to the negative impact of the COVID-19 pandemic on business operations and implementation of SC 74 work activities.