PXP Energy posts lower net loss in 1st half on dip in oil production cost, depletion rate

By Lenie Lectura – August 2, 2019
from Business Mirror

LISTED upstream oil and gas firm PXP Energy Corp. posted a lower net loss of P17.9 million in the first half of the year from P32.8 million in the same period a year ago.

The company said this was mainly due from the reduction in oil production costs, lower depletion rate, among others, which were partially offset by lower petroleum revenues.

Consolidated net loss attributable to equity holders of the parent company stood at P7.6 million compared to P20.1 million posted in the first half of 2018.

Revenues were lower by 22.9 percent to P51.4 million at end-June this year from P66.7 million last year, mainly due to a 13.6-percent drop in crude oil price in Service Contract 14C-1 Galoc, and the plug and abandonment (P&A) of SC 14A Nido and SC 14B Matinloc production wells.

The company also recorded lower consolidated cost and expenses at P86.2 million from January to June this year from  P110.5 million in the same period a year ago, brought about by lower depletion cost in SC 14C-1 Galoc, and the cessation of operational costs in SC 14A Nido and SC 14B Matinloc.  PXP Chairman Manuel Pangilinan said the company still “has enough cash to stay where it is in the next few years.”

“The question really is, when something does break out, then we have to raise funds for development. That’s a better problem than balance sheet. Although, we are looking at, of course, domestic properties not part of the disputed territory,” said Pangilinan when sought for comment on the company’s first-half financial report.

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. It also has a direct operating interest of 50 percent in SC 75 northwest Palawan. It is also waiting for guidance from the Philippine government in respect of any future activity in the SCs, given previous complications arising from the Philippines’s filing of a case in an international tribunal against China, whose claims overlap the country’s territory.

“PXP, through Forum Energy Limited, will take guidance from the Philippine government in respect of any future activity in SC 72 and SC 75. The company is mindful that the Malampaya gas resource, which supplies about 40 percent of Luzon’s power requirements, could be exhausted within the next decade.

The company, therefore, remains hopeful that the force majeure imposed on SC 72 and SC 75 will be lifted by the Department of Energy soon for the company to be able to resume exploration works in these SCs,” it said.