Philex buys additional stake in Pitkin Petroleum

Publicly-listed Philex Mining Corp. has bought an additional 6.4-percent stake worth $6 million in US-based Pitkin Petroleum Ltd., a company report to the Philippine Stock Exchange said.

Philex said the acquisition is part of the company’s effort to increase its exposure or portfolio of oil properties.

According to Philex, it will use internally-generated fund to finance the share purchase.

Last November, Philex bought a 4.4-percent interest in Pitkin valued at $2 million.

“Our investment in Pitkin Petroleum is part of the company’s thrust to increase its portfolio in petroenergy. This investment will comprise 51 percent of Philex’s current oil assets,” the company said.

The transaction involved Philex subscribing to four million shares of Pitkin Petroleum, representing 4.4 percent of the shares of the Texas-based oil and gas exploration firm.

Pitkin is an exploration firm currently producing on a small-scale basis in Louisiana but with properties in offshore Vietnam and Peru.

Drilling in Vietnam is scheduled to start by 2009 where Pitkin is 40 percent carried for two wells at about $53 million, with an undisclosed partner from the United Kingdom with a $2-billion market capitalization.

Philex is a member of the consortium holding Service Contract 41 covering the deep waters of South Sulu Sea. The company has a 2.264 percent interest in SC 41 up to the completion of a seismic survey which is projected to cost over $6 million.

At present, it holds a 1.65 percent stake in SC 6 (Cadlao Block in Northwest Palawan) and 1.668 percent in SC 6A (Octon Block in Northwest Palawan). The Cadlao field is estimated to produce between one to two million barrels of oil.

Philex has other energy-related investments in its wholly-owned subsidiary, Brixton Energy and Mining Corp., currently undertaking pre-development activities in a coal property in Southern Zamboanga.

It also owns a coal operating contract in Buug-Diplahan South Zamboanga with an estimated coal reserve of two million metric tons. Coal quality ranges from bituminous to semi-anthracite which is expected to command price premium with the prevailing market conditions.

Philex is seeking approval from the Department of Energy (DOE) to convert the coal contract and start mine development works in the area.