Philex Petroleum sinks into P1.086-B loss

MANILA, Philippines - Philex Petroleum Corp, the listed oil and gas company led by corporate taipan Manuel V. Pangilinan, reported a net loss of P1.086 billion last year, a stark turnaround from the P537.53-million income generated in 2011.

In a disclosure to the Philippine Stock Exchange, Philex said the loss stemmed mainly from write-offs from investments in various oil and gas projects while the 2011 gains came from extraordinary non-recurring income amounting to P443.67 million.

Philex said the net loss from Service Contract 40 in Cebu, where it has a 60.49-percent participating interest through Forum Energy Plc., amounted to P388.63 million.

It also wrote off P578.25 million of assets in Brixton, the company’s wholly owned subsidiary which holds Coal Operating Contract 130 in the province of Zamboanga Sibugay.

These write-offs wiped out P191-million revenues from subsidiary Forum Energy and P48.03-million revenues from Brixton.

Moving forward, Pangilinan, chairman and chief executive officer of Philex, said the company remains focused on proving the commercial viability of potential hydrocarbon resources in SC 72 in Recto Bank in the disputed West Philippine Sea.

However, he recognized that the territorial dispute between the Philippines and China has delayed the company’s program.

“We will continue to focus on our goal of proving the commerciality of the potential hydrocarbon resources in the SC 72 contract area located at the Recto Bank. However, in pursuing such goal, we appreciate the significant challenges arising from the location of SC 72, for which the continued support of the Philippine government remains a critical factor.”

Forum Energy earlier asked the Department of Energy to extend its work program timetable for the $75-million oil and gas exploration project.

The DOE granted a two-year extension to Aug. 14, 2015 from the original deadline of Aug. 14, 2013.

Forum sought an extension in the government-mandated work program because of delays in their drilling activities, dragged largely by the geopolitical issues between the Philippines and China.

Recto Bank, also known as Reed Bank, is located in the West Philippine Sea, a disputed area currently the subject of an arbitration case filed by the Philippines before the United Nations Arbitral Tribunal.