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PXP Energy trims losses in 1st half

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PXP Energy Corp. posted a P7.6-million consolidated net loss attributable to equity holders of the parent firm during the first six months of 2019, trimming the P20.1-million losses posted in the same period last year.

Reported consolidated net loss was also cut to P17.9 million from P32.8 million “due to reduction in oil production costs, lower depletion rate, and higher other income (charges), partially offset by lower petroleum revenues,” it told the stock exchange.

PXP Energy, an upstream oil and gas company, has yet to disclose its financial figures specific to the second quarter.

During the first half, its consolidated petroleum revenues fell by 22.9% to P51.4 million from P66.7 million a year ago “resulting from a 13.6% drop in crude oil price in Service Contract (SC) 14C-1 Galoc, and the plug and abandonment (P&A) of SC 14A Nido and SC 14B Matinloc production wells.”

The company directly and indirectly owns oil and gas exploration and production assets in the Philippines, and indirectly owns an exploration asset in offshore Peru.

PXP Energy cut its cost and expenses by 22% to P86.2 million 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.




“Group general and administrative expenses higher due to depreciation charges from Right-to-Use asset,” PXP Energy said.

Among the highlights of the reporting period is the payment on Feb. 11 by Philex Mining Corp. of an additional P1.386 billion in connection with PXP Energy’s announcement in Oct. 26, 2018 of the signing and execution of a definitive subscription agreement.

The mining company subscribed to 260,000,000 common shares at P11.85 per share for P3.081 billion. With the payment, Philex Mining’s total paid subscription increased from P770.25 million to P2.156 billion, representing 70% of its total subscription in PXP Energy.

PXP Energy also said on Thursday that through Forum Energy Ltd., a 78.98% owned subsidiary, it would take guidance from the Philippine government on any future activity in SC 72 and SC 75.

The company said it was “mindful that the Malampaya gas resource, which supplies about 40% of Luzon’s power requirements, could be exhausted within the next decade.”

“In that light, resumption of exploration in SC 72 is of national interest…. [PXP Energy] therefore, remains hopeful that the force majeure imposed on SC 72 and SC 75 will be lifted by the Department of Energy soon for [it] to be able to resume exploration works in these SCs (service contracts),” it said.

On March 2, 2015, the Energy department placed SC 72 under force majeure because the contract area falls within the seas that was the subject of the arbitration process at that time.

Earlier this week, PXP Energy Chairman Manuel V. Pangilinan said he had not heard any advice from the government on the lifting of the moratorium.

“No words from the government. No words from CNOOC,” he said, referring to China National Offshore Oil Corp., the Chinese state firm with which PXP Energy had initial talks with for a joint exploration.

On Thursday, PXP Energy shares traded higher by 3.35% to close at P10.48 each. — Victor V. Saulon

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