PXP Energy hikes stake in SC 72

MANILA, Philippines — Listed upstream oil and gas firm PXP Energy Corp. has raised its economic interest in Service Contract (SC) 72 offshore west Palawan.

In a disclosure to the Philippine Stock Exchange yesterday, PXP Energy said it increased its direct shareholding in FEC Resources Inc. (FEC) from 54.99 percent to 78.39 percent.

PXP Energy bought 449.99 million shares of FEC for  $0.00225 or a total of $1.01 million via a stock rights offering.

Incorporated under the laws of Alberta, Canada, FEC is an investment holding firm whose principal asset is a 6.8 percent stake in Forum Energy Ltd.

With the increase in direct shareholding in FEC, PXP Energy also increased its economic interest in Forum Energy from 76.07 percent to 77.66 percent.

Incorporated in the UK, Forum Energy’s principal asset is a 70 percent interest in SC 72, an 8,800-square kilometer offshore petroleum license situated west of Palawan Island in the West Philippine Sea which contains the Sampaguita gas discovery.

“FEC intends to use the proceeds from the rights offering for general working capital purposes primarily the payment of administrative expenses and to provide the company with funds for investment opportunities including participation, in any fund raising of Forum Energy Limited in order to maintain its percentage ownership interest in that company,” PXP Energy said.

During its virtual stockholders’ meeting last month, the company said it hopes to resume exploration activities in petroleum blocks located in the West Philippine Sea.

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

SC 72 has been under force majeure since December 15, 2014 due to the West Philippine Sea maritime dispute.

Forum Energy plans to drill two wells over the Sampaguita Field once the force Mmajeure is lifted.

In 2019, the SC 72 consortium—composed of Forum Energy Ltd. and Monte Oro Resources and Energy Inc.— invested $490,000 or over P25 million to redo 3D seismic data for the Sampaguita gas discovery, which has the potential to contain approximately 2.5 trillion cubic feet (TCF) of recoverable gas and could be the country’s new source of gas as replacement for the Malampaya project.

The contract for the Malampaya gas field in northwest Palawan will expire in 2024 but this can be applied for extension with the Department of Energy (DOE).

Operating since 2001, the Malampaya gas project supplies fuel to around 40 percent of gas-fired plants in Luzon namely the Ilijan, Sta. Rita plant, San Lorenzo, San Gabriel and Avion plants—which supply over 3,000 megawatts (MW) to the Luzon grid.