PetroEnergy profit down 4% on lower wind power, new geothermal pricing

YUCHENGCO-LED PetroEnergy Resources Corp. saw its first-quarter earnings declined by 4% due to the lower contribution of its wind assets and the impact of electricity sales repricing of its geothermal plant.

The power company netted an attributable income of P126.04 million in the first three months of 2020, lower compared with P131.61 million it posted in the same quarter in 2019, based on its stock exchange disclosure on Tuesday.

Its total net income fell by 8% to P199.84 million from P216.96 million in the same period a year ago.

The company’s earnings were affected by the repricing of the electricity sales contract of Maibarara Geothermal, Inc. (MGI) to P4 per kilowatt-hour in mid-2019. The lower net income share of PetroWind Energy, Inc., as a result of the decline in wind speeds in the quarter, also contributed to the income slump.

However, it was partially offset by the increase in PetroSolar Corp.’s first-quarter income, which is lifted by the entry of the 20-megawatt Tarlac Solar Power Project (TSPP) 2 by PetroSolar Corp.

A 21% growth in oil revenues to P101.68 million also tempered the income drop. The revenue uptick was due to the contribution of newly opened production wells in the Etame block in Gabon, West Africa, which raised lifting volumes to 1.4 million barrels of oil (mmbo) from 1.1 mmbo.

PetroEnergy is engaged in both power generation from renewable sources, and oil exploration and production.

PetroGreen Energy Corp., which owns and manages MGI, PetroSolar, and PetroWind, is the renewables arm of PetroEnergy.

Both units of MGI’s Maibarara geothermal plants run continuously in the January-March period and delivered a total energy output of 64,665 megawatt-hours (MWh).

PetroWind’s Nabas project in Aklan province generated 35,479 MWh of energy in the same period.

PetroSolar’s TSPP 2, which is still in the testing and commissioning phase, produced 7,809 MWh of electricity in the quarter.

In February and March, the Department of Energy provided PetroSolar with certificates of confirmation of commerciality and endorsement for TSPP 2, respectively. The endorsement is a prerequisite to the issuance of the compliance certificate, which in turn will determine when the solar plant will officially run.

Meanwhile, PetroEnergy is part of a consortium that is involved in the exploration, exploitation, and production of the 307,360-hectare Etame block under a contract with the Gabonese government.

It has a 2.53% minority stake in the group. Other parties to the Etame contract are Addax Petroleum Etame, Inc. with 33.90%; Sasol Petroleum West Africa Limited with 30%; and VAALCO Gabon (Etame), Inc., the block’s operator, with 33.58%.

The consortium was able to develop four oil fields, namely: Etame, Avouma, Tchibala, and Ebouri. These prospects yielded 112 mmbo between 2002 and 2019.

It is still developing new oil prospects which are expected to raise the field’s output to 22,000 barrels of oil per day (bopd) from 11,000 bopd.

Last year, PetroEnergy reported a 23% drop in net income to P533.93 million, compared with P694.91 million it posted a year ago.

Its bottom line in 2019 was hit as oil income fell with lower crude volumes and prices.

On Tuesday, shares in PetroEnergy expanded by 3.45% to close at P3 each. — Adam J. Ang