PXP Energy net loss widens to P31.4 million

PXP ENERGY Corp. reported a net loss of P31.4 million in nine months to September this year, 37% bigger than year-ago’s P23 million consolidated losses attributable to equity holders of the parent firm as revenues lagged behind the cost and expenses during the period.

In a disclosure to the stock exchange, the upstream oil and gas exploration company said its reported consolidated net loss reached P49.1 million, up 43% from P34.3 million a year ago “due to higher depletion cost and decommissioning, other charge of P11.9 million, and a provision for income tax of P1.6 million.”

The losses were offset by a foreign exchange gain of P30 million during the period, the company added.

PXP Energy directly and indirectly owns oil and gas exploration and production assets located in the Philippines, and indirectly owns an exploration asset located in offshore Peru.

Consolidated petroleum revenues reached P106.1 million, higher by 38.3% from P76.7 million a year ago “resulting from the 38% improvement in crude oil price and the 1% increase in volume,” the company said.

However, consolidated cost and expenses grew by 43.6% to P173.7 million from P121 million because of the higher depletion cost in Galoc and the decommissioning of Tara and Libro wells in Service Contract (SC) 14, the company said, referring to the areas where it has an agreement with the government to explore.

On Wednesday, shares in the company rose 1.11% to close at P16.40 each.

Among the highlights during the ninemonth period is the farming-in agreement between Karoon Gas Australia Ltd. of a 35% interest in offshore exploration Block Z-38, Tumbes Basin Peru, to Tullow Peru Ltd., a wholly owned subsidiary of Tullow Oil plc.

Pitkin Petroleum Peru Z-38 SRL, a wholly owned subsidiary of Pitkin Petroleum Ltd. (PPL), holds a 25% participating interest in Peru Block Z-38. PXP Energy holds a 53.43% interest in PPL. KEI (Peru Z38) Pty Ltd., Sucursal del Peru holds a 40% interest in the offshore exploration joint venture.

Under the agreement, Tullow will acquire a 35% interest in the block by funding 43.75% of the cost of the first exploration well, which was capped at $27.5 million.

Tullow is also to pay $2 million upon completion with a further $7 million payable upon declaration of commercial discovery and submission of a development plan to Perupetro.

The agreement remains subject to licensing conditions and regulatory approvals.

In September, PXP Energy said an exploration block in Peru in which subsidiary PPL has participating interest had been removed from its force majeure status after recent changes in the hydrocarbon law in the foreign country.

It said Karoon, an international oil and gas exploration company with projects in Australia, Brazil and Peru, had been actively working with the Peruvian authorities and considers the changes as a step forward for exploration in Peru.

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

The company said it is mindful that the Malampaya gas resource, which supplies about 40% of Luzon’s power requirements, could be exhausted within the next decade, thus the resumption of exploration in SC 72 is of national interest.

PXP Energy is hopeful that the force majeure imposed on SC 72 and SC 75 would be lifted by the Department of Energy soon for the company to be able to resume exploration works in the two service contracts. —