PXP Energy losses swell to over P1 billion in 9 months

MANILA, Philippines — Listed upstream oil and gas firm PXP Energy Corp saw its net loss widen to P1.68 billion as of end of September due to the full write-down of the carrying value of its Peru prospect.

In a disclosure to the Philippine Stock Exchange, PXP Energy attributed the significant net loss to the P1.655-billion full write-down of the carrying value, or net of the settlement sum, of oil and gas assets related to Peru Block Z-38.

Last Sept. 17, PXP Energy’s 53.43 percent-owned subsidiary Pitkin Petroleum Ltd. (PPL) and its wholly owned subsidiary Pitkin Petroleum Peru Z-38 SRL (Pitkin Peru) entered into a deed of settlement and release with KEI (Peru Z-38) Pty Ltd (KEI) and its wholly owned branch KEI (Peru Z-38) Pty Ltd Sucursal del Peru (KEI Peru) relating to Pitkin Peru’s dispute with KEI Peru in Block Z-38 located in offshore Peru.

Under the deed, KEI has agreed to pay $9.6 million in cash to PPL in full and final settlement of all claims by Pitkin Peru and its associates in connection with Block Z-38.

The said deed became effective upon the receipt of the settlement sum by PPL on Oct. 4.

On the other hand, PXP Energy’s core net loss was nearly halved from P30.6 billion to P15.7 billion.

PXP Energy said its consolidated petroleum revenues jumped by 196.3 percent to P42.6 million.

The company recorded a 90 percent surge in Galoc crude sale price at $66.97 per barrel this year versus $35.32 per barrel last year, which was offset by slightly lower output following normal decline in field production rate in Service Contract (SC) 14C-1 Galoc, with two completed lifting 429,549 barrels this year versus 448,297 bbls last year.

Moving forward, PXP Energy remains focused on fulfilling its commitments for SC 72 and SC 75, respectively, which have been approved by the Philippine government, including the undertaking of an environmental baseline study.

SC 72 is operated by Forum GSEC 101 Ltd., a subsidiary of PXP Energy’s unit Forum Energy Ltd., with a 70 percent participating interest.

For SC 75 in northwest Palawan, it is directly operated by PXP Energy with a 50 percent participating interest.

In October 2020, the Department of Energy lifted the force majeure for the oil and gas areas in West Philippine Sea and issued Resume-to-Work notices to the operators of SC 72 and SC 75.

Earlier this week, PXP Energy chairman Manuel Pangilinan said the chances of exploring and developing SC 72 within the Duterte administration were slim unless the Philippine and Chinese governments come out with a final agreement within the year.

This is because the Philippines will soon enter an election period, which would then be the focus on the country and the chances to proceed with the exploration of oil and gas prospects would be “beyond our hands,” Pangilinan said.