By Christine J. S. Castañeda
The possible lifting of the moratorium on Service Contract (SC) 72 and the investment of businessman Dennis A. Uy’s Dennison Holdings Corp. in PXP Energy Corp. (PXP) made the latter’s stock one of the hottest last week.
PXP Energy was the ninth most traded stock in terms of value turnover last week. A total of P413.891 million worth of 23.271 million shares exchanged hands on the trading floor from Oct. 29 to Oct. 31, data from the Philippine Stock Exchange showed.
Shares closed at P17.84 apiece on Wednesday, up P0.22 or 1.25% from the previous day. It was 1.44% lower than its closing price of P18.10 on Oct. 26. It is, however, up 114.42% year to date.
“PXP has been one of the most actively traded stocks in the market because the investors are anticipating market-moving updates on the possibility of lifting the moratorium on SC 72.” said Cristopher Adrian T. San Pedro, a certified securities representative at Unicapital Securities, Inc.
“This will enable PXP Energy to restart talks with China National Offshore Oil Corporation for oil and gas exploration in Recto Bank located in the West Philippine Sea, [to which] I believe there is a strong possibility that this could happen on the visit of Chinese President Xi Jinping [this] month,” he added.
Mr. San Pedro said the market-moving news on PXP Energy was Dennison Holdings’ subscription to the company’s 340 million common shares at P11.85 per share. This gives Dennison Holdings 14.78% total ownership interest in PXP Energy.
Piper Chaucer E. Tan, research associate at Philstocks, Inc., noted the sudden movement of PXP was due to Dennison Holdings’ entry.
“Investors perceived this as a definitive move that the joint oil exploration [is] most likely to happen and take note that the speculation of the joint exploration is [what’s] keeping PXP actively traded in the local bourse,” he added.
On the other hand, PXP Energy said in its disclosure dated Oct. 24 that it would take guidance from the government regarding the future activity in SC 72 and SC 75 — the latter referring to the oil and gas exploration permit that covers the offshore area of 610,000 hectares in the Northwest Palawan basin — and that it “remains hopeful” that the force majeure would be lifted by the Department of Energy (DoE) for the company to resume exploration works in the two service contracts.
To recall, the DoE issued a moratorium on all exploration and drilling works in SC 72 and SC 75 in December 2014 and 2015, respectively, due to the maritime dispute between the Philippines and China over the West Philippine Sea.
Meanwhile, the crude oil and natural gas explorer’s latest consolidated earnings report showed that PXP Energy posted a net loss after taxes amounting to P49.093 million in the first nine months of the year, 43.30% higher than the P34.258-million loss in 2017’s comparable period. For the third quarter alone, the company’s net loss stood at P16.251 million from P17.068 million in 2017.
Mr. San Pedro pegged the stock’s short term support and resistance at P16.30 and P18.96, respectively.
Philstock’s Mr. Tan gave primary and secondary support prices of P16 and P15.30 as well as primary and secondary resistance prices of P18 and P19.42.