Pasig—(PHStocks)—Philex Petroleum Corp. (PSE: PXP) incurred a consolidated net loss of PhP44.2 million for the three-month period ended 31 March 2015, compared to a net income of PhP25.7 million during the same period last year. The net loss attributable to equity holders of the parent company amounted to PhP22.8 million, compared to PhP20.2 million during the same period last year.
The net loss was primarily attributable to the lower petroleum revenues contributed by its subsidiary, Forum Energy Plc due to lower crude oil prices and lower production from Service Contract 14C1 Galoc.
On 12 March 2015, the Philippine Department of Energy (DOE) acknowledged the termination of the Service Contract 14C2 West Linapacan Farmin Agreement between Pitkin Petroleum Plc and The Philodrill Corp. (PSE: OV), Oriental Petroleum and Minerals Corp. (PSE: OPM), Logpocor, Forum Energy Philippines Corp., Cosco Capital Inc. (PSE: COSCO) and PetroEnergy Resources Corp. (PSE: PERC). The 58.29% participating interest previously assigned to Pitkin under the Farmin Agreement, of which 29.14% was subsequently transferred to RMA West Linapacan Pte Ltd by Pitkin under a separate farmin agreement, will be reassigned to the SC 14C2 Farmors. Pitkin is a 53% owned subsidiary of Philex Petroleum.
On February 26, 2015, the DOE granted Force Majeure on Service Contract 72 (SC72) due to the suspension of exploration activities within certain areas of the West Philippine Sea for the duration of the ongoing arbitration case between the Republic of Philippines and the People’s Republic of China. The Force Majeure period shall be effective from December 15, 2014 until receipt of DOE notification to commence drilling. The schedule of the second Sub-Phase and all subsequent SubPhases of the Exploration Period shall be adjusted to compensate for the Force Majeure period. Forum holds a 70% operating interest in SC 72 through its wholly-owned subsidiary, Forum (GSEC 101) Limited. Philex Petroleum holds a 60.49% voting interest and a 48.76% economic interest in Forum.
Following the suspension of exploration activities in SC 72 due to Force Majeure, the Forum Board is considering applying for the cancellation of admission to AIM of Forum’s ordinary shares, which would require a shareholder resolution at Forum’s Annual General Meeting in June 2015. The company is currently in discussions with Forum regarding Philex Petroleum potentially making an offer to minority shareholders to acquire their shares for cash prior to the cancellation taking effect so that shareholders have the option of selling their shares rather than retaining shares in an unlisted company. The company is currently considering whether such an offer will be made and there is no certainty that such an offer will be made. However, the company has indicated to Forum that, were such an offer to be made, Philex Petroleum would offer minority shareholders cash consideration of 20 pence per share.
The company will continue its efforts to reduce operating expenditures through the rationalization of the company’s business structure and asset portfolio particularly in the current low oil-price environment.