SEC approves Philodrill stock rights offer

The Securities and Exchange Commission has approved the P383.74-million stock rights offering of oil exploration firm Philodrill Corp.

Based on documents filed with the SEC, Philodrill will offer 38.37 billion shares priced at P0.01 each share, representing a significant discount to the company’s closing stock price of P0.027 per share as of yesterday. 

 “The discount is being given to encourage participation in the offering,” Philodrill said.

Shareholders can subscribe to one share for every four shares held as of a record date yet to be set by the company.

The shares to be issued will come from the company’s latest increase in capitalization from P1.55 billion to P2 billion.  

Penta Capital Investment Corp. has been tapped as lead underwriter for the rights issue.

Proceeds from the offering will be used to pay the company’s share in the expenses for Service Contract 14 at the Galoc oil field amounting to P54.47 million, and payment of loans and advances (P134.56 million).

Other proceeds will be used for 2009 operational expenses, including the funding of oil production activities of SC 14’s Nido Matinloc Production Block and SC 14 C-1 and cost of well abandonment and platform dismantlement of the Nido and Matinloc oilfields.

Philodrill is eyeing a net income of P1.2 billion this year on higher revenues as the Galoc oil field starts production.

The company has projects in the offshore areas of Palawan and South Sulu Sea and onshore Mindoro.

The Galoc oil field, operated by Galoc Production Co., reportedly contains proven reserves of up to 16 million barrels of oil.

Philodrill initially held a 6.4-percent participating interest in the project but raised this to 7.02 percent after it acquired Phoenix Gas and Oil Co., which has interests in several petroleum exploration blocks, for P32.6 million in May last year.

Other shareholders in the project are Australian firm Nido Petroleum Ltd., with a 22.28-percent stake, and other local upstream oil companies. — Zinnia B. dela Peña