PNOC EC Sets PhP5.25B Budget for 2011

PNOC Exploration Corp.  (PSE: PEC),  the upstream petroleum and coal arm of state-owned Philippine National Oil Co., is looking at a total proposed budget of PhP5.25 billion for 2011. This includes a total capital investment of PhP4.55 billion, including contingency; PhP167.81 million for capital expenditures (capex); and PhP572.7 million for operating expenditures (OPEX). Budget for the Malampaya, Petroleum and Coal Exploration Projects, and the planned Malangas and Isabela Power Plants are included in the total capital investment aspect of the budget. The budget is still set to be approved by PNOC.

PNOC EC has several projects lined up for both the petroleum and coal industry. For petroleum, the company has started its oil trading business in 2009. The company ventured into the international trading scene by supplying and sourcing petroleum products within the Asian region, and has since become a new revenue-generating unit of the company.

From its experience in overseas oil trading, PNOC EC also plans to begin operations in its Lumbog Coal Project, which is within its Coal Operating Contract (COC) 41 – Malangas Coal Project located in Zamboanga, Sibugay. For the year, PNOC EC will spend around PhP818 million for the development of the project, with production set for the record quarter of 2012. The Lumbog Coal Project is expected to boost PNOC EC’s current production from its mining operations. It is also the first of several projects programmed within the next five years for COC 41 aimed at increasing the coal reserve inventory to sustain the fuel requirements of the planned 50MW power plant in the area. The project is still set for approval of the PNOC EC Board of Directors.

In compliance with the Philippine Stock Exchange’s (PSE) rules of a minimum 10% public ownership for publicly listed companies, PNOC EC is preparing its follow-on offering. Currently, PNOC EC’s shares of stock are 99.79% owned by the Philippine government through PNOC, with the remaining 0.21% held by public shareholders. This is also subject for the approval of the PNOC.

As PNOC celebrates its 35th year in the industry, PNOC EC reaffirms its commitment of exploring and harnessing indigenous energy resources to provide a stable energy supply for the country.

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