Philex Petroleum trims losses

MANILA, Philippines - Philex Petroleum Corp., the upstream oil and gas subsidiary of Philex Mining Corp., trimmed its net loss in the nine months ending September this year to P65.9 million.

The nine-month loss was 65 percent lower than the P188.8 million incurred in the same period last year due to a charge in impairment to Pitkin’s Service Contract 6a – Octon.

“The net loss primarily resulted from lower petroleum revenues contributed by its subsidiary, Forum Energy Plc, due to a drop in crude oil prices and a lower production from Service Contract (SC) 14C1 Galoc,” Philex Petroleum said.

Philex Petroleum chairman Manuel Pangilinan earlier said this trend would likely continue until 2016 because the firm’s oil and gas prospects are still under exploration.

Last August, Philex Petroleum confirmed that the Department of Energy (DOE) has granted a force majeure on SC75.

“Under the terms of the force majeure, all exploration work at SC75 shall be immediately suspended effective from the end of its first sub-phase (SP-1) on Dec. 27, 2015 until the date the DOE notifies the company to resume petroleum-related activities,” the firm said.

Following this development, the second sub-phase of SC75 has been put on hold until further notice.

“The terms of SP-2 and all subsequent sub-phases will be extended by the term of the force majeure,” Philex Petroleum said.

This follows the DOE’s suspension of all drilling and exploration works in the disputed West Philippine Sea last March.

In particular, it granted a force majeure on SC72 in Recto (Reed) Bank, which is the subject to a territorial dispute between the Philippines and China.

UK-listed Forum Energy has a 70-percent stake in SC72, which covers the Sampaguita gas field as well as several oil and gas leads.

Moving forward, Philex Petroleum intends to continue its efforts to reduce operating expenditures through the rationalization of its business structure and asset portfolio particularly in the current low oil-price environment.

In August, Pangilinan said the firm was looking at investing in one or two existing oil and gas exploration prospects nearing production after the suspension of its project located in the disputed waters.