Philex invests additional P1.2 billion in oil exploration unit

MANILA, Philippines - Philex Mining Corp. will invest an additional P1.2 billion in its wholly-owned oil exploration subsidiary Philex Petroleum Corp. (PPC) in preparation for possible acquisition of new assets.

In a disclosure to the Philippine Stock Exchange (PSE) yesterday, Philex Mining president J. Ernesto C. Villaluna Jr. said the investment was approved by the firm’s board in a meeting held last Tuesday.

The investment will be made by way of subscription to 1.2 billion new shares of PPC at its par value of P1 per share or a total subscription price of P1.2 billion.

The new shares in the company will come from the increase in the authorized capital stock of PPC from P2 billion to P6.8 billion.

“The proceeds of the subscription will enable PPC to acquire oil and petroleum assets,” Villaluna said.

Philex Petroleum has a 33-percent interest in Forum Energy Plc (FEP), a UK-based company listed at the Alternative Investment Market of the London Stock Exchange.

FEP, through its 70 percent-owned subsidiary, Forum (GSEC 101) Ltd., holds geophysical survey and exploration contract (GSEC) 101 over the Sampaguita natural gas discovery in the northwest coast of Palawan.

According to Villaluna, FEP has a pending application for the conversion of this GSEC into a service contract, after which further exploration of the Sampaguita property can be started.

Philex Petroleum also owns 6.4 percent of Pitkin Petroleum Ltd. (Pitkin), a Texas-based junior exploration company currently producing on a small-scale basis in Louisiana but with properties in offshore Vietnam and Peru.

PPC also acquired 20 percent of PetroEnergy Resources Corp., a local company listed in the PSE engaged in oil exploration and in providing technical services to companies exploring for oil in the Philippines.

The investment of Philex Petroleum in FEP brought the Philex Group’s total interest to 61 percent taken together with the 28.4 percent interest of FEC Resources, Inc., a 50.7 percent-owned Canadian subsidiary of Philex Mining Corp.

The investment in Pitkin brought the Philex Group’s total investment to 21 percent taken together with the holdings of Philex Mining.

Aside from PPC and Pitkin, Philex Mining also has investments in Brixton Energy & Mining Corp. (BEMC) which is allowed to extract coal from a 2,000 hectare property in Zamboanga Sibugay.

Philex also has direct stakes in SC-41 on deepwater South Sulu Sea for which recoverable reserves estimate prior to drilling was reported to be at a maximum of 150 million barrels; SC-6 at the Cadlao Block-NW Palawan, which is expected to recover between 1-1.5 million barrels of oil; and SC-6A at Octon Block-NW Palawan, which is being linked with the Galoc field.