PXP ENERGY Corp. said on Thursday that it had advanced the date for Dennison Holdings Corp. to subscribe to the listed firm’s shares at a total price of P4.029 billion, amending the terms they had agreed on about two months ago.
The upstream oil and gas company told the stock exchange that the parties had agreed on Dec. 26, 2018 “to reschedule and accelerate the full payment” by Dennison of the subscription price to the 340 million PXP Energy common shares to not later than March 31, 2019.
PXP Energy’s disclosure amends its announcement on Oct. 26, 2018 on the subscription agreement forged on the same date between the company chaired by Manuel V. Pangilinan and Davao-based businessman Dennis A. Uy’s Dennison.
Under the new terms, Dennison will also pay in cash a downpayment equivalent to 1% or P40.29 million of the total subscription price on or before Jan. 7, 2019.
In the event Dennison fails to pay the entire subscription price by March 31, the entire amount of the downpayment will be forfeited in favor of Mr. Pangilinan’s company and the subscription agreement will be terminated at the option of PXP Energy.
After the subscription to the shares and full payment of the subscription price, Dennison will be entitled to at least one seat in the PXP Energy board, as well as to nominate the board’s vice-chairman. Mr. Uy’s firm is also entitled to all other rights of a shareholder.
PXP Energy directly and indirectly owns oil and gas exploration and production assets in the Philippines, and indirectly owns an exploration asset located in offshore Peru.
The amendment comes after PXP Energy disclosed on Dec. 21 that Forum (GSEC 101) Ltd., or Forum GSEC, had sent a letter of request on the same date to the Department of Energy (DoE) to lift the force majeure imposed on Service Contract (SC) 72 on Recto Bank.
Forum Energy Ltd., in which PXP Energy holds a direct and indirect interest of 78.98%, has a 70% participating interest in SC 72 located in Northwest Palawan, through its wholly owned subsidiary Forum GSEC.
PXP Energy has a total economic interest of 53.1% in SC 72.
SC 72 is covered by the decision handed down by the Permanent Court of Arbitration in The Hague in the Netherlands on July 12, 2016. The court ruled that Reed Bank or Recto Bank, where SC 72 lies, is within the Philippines’ exclusive economic zone as defined under United Nations Convention on the Law of the Sea.
On March 2, 2015, the DoE placed SC 72 under force majeure because the contract area falls within the disputed area, which was the subject of the arbitration process.
Under the terms of the force majeure, exploration work at SC 72 has been suspended from Dec. 15, 2014 until the DoE notifies Forum Energy that it may continue drilling.
In its disclosure on Thursday, PXP Energy also said that Philex Mining Corp. had paid its 25% downpayment or P770.25 million of its subscription to the former’s 260 million common shares at P11.85 each. The total consideration of the deal is at P3.081 billion.
On the same day, shares in PXP Energy slipped by 1.30% to close at P15.20 each. Philex Mining shares jumped 4.29% to P2.92 each. — Victor V. Saulon
