PXP Energy cuts losses to P14.7M

BY LENIE LECTURA – OCTOBER 27, 2022
from Business Mirror

PXP Energy Corp. announced it has cut its net loss to P14.7 million at end-September this year from P20.2 million in the same period a year ago, mainly due to higher profit from its Galoc operations and reduced expenses.

The Pangilinan-led firm said last Wednesday that the reduction in its core net loss from January to September this year was a result of higher profit from Service Contract 14-C1 Galoc, located in offshore Northwest Palawan. Consolidated net loss attributable to equity holders of the parent company dropped significantly at P25.3 million from P1.68 billion due to impairment in Peru Block Z-38 in 2021, the firm said.

Consolidated petroleum revenues stood at P49.3 million, up by 15.6 percent from P42.6 million despite lower crude off-take in SC 14C-1 Galoc.

Consolidated costs and expenses was 31.6% lower at P65.6 million brought about by a significant reduction in general and administrative expenses at P37.2 million.  Petroleum production costs in SC 14C-1 Galoc remained flat year-on-year at P28.4 million.

PXP and Forum Energy Ltd. will continue to coordinate with the government on the resumption of activities in both SC 75 and SC 72.

PXP Energy holds a 50-percent interest in SC 75 located in Northwest Palawan.  Forum Energy Ltd., in which PXP holds a direct and indirect interest of 79.13 percent, has a 70-percent participating interest in SC 72, also in Northwest Palawan, through its wholly owned subsidiary Forum. PXP has a total economic interest of 54.36 percent in SC 72.

Early this month, the Department of Energy (DOE) has declared a force majeure for SC 75 and SC 72, both in the West Philippine Sea, from April 6 and until such time it is lifted by the regulator.

It can be recalled that there was already a force majeure imposed on SC 75 and SC 72 prior to this, but was lifted by the DOE on October 16, 2020. However, a directive from the DOE in April this year ordered them to “put all on hold all exploration activities for SC 75 and SC 72 until such time that the Security, Justice and Peace Coordinating Cluster (SJPCC) has issued the necessary clearance to proceed.”

PXP Energy and Forum complied.

The DOE also said SC 75 and SC 72 would be entitled to an extension of the exploration period corresponding to the number of days that the contractors actually spent in preparation for the activities that were suspended in April. The total expenses amounting to $5.18 million and $8.60 million incurred as a result of the directive to suspend SC 75 and SC 72 activities, respectively, would be part of the approved recoverable costs, subject to DOE audit, said the agency.

Meantime, PXP said it shall continue to pursue exploration work with respect to its other projects in the Philippines, including SC 40 and SC 74.