Philex Petroleum shares soar

MANILA, Philippines - Shares of Philex Petroleum Corp., a wholly-owned unit of copper-gold producer Philex Mining Corp., rose more than seven-fold in their trading debut yesterday, closing at P8.60 each.

Opening at P3 per share, Philex Petroleum rose to as much as P13, or nearly 1,000 percent over its initial offer price of P1.20 per share. A total of 4.97 million shares valued at P45.12 million changed hands yesterday.

The closing price gave Philex Petroleum a market capitalization of P2.04 billion.

The company listed 1.7 billion common shares by way of introduction, with 35 percent distributed to shareholders of Philex Mining.

Listing by way of introduction allows a firm to join the Philippine Stock Exchange without having to sell shares to the public immediately. Those that resort to this route, however, are mandated to undertake an initial public offering (IPO) 12 months after listing.

“Philex Petroleum’s listing is made attractive by its natural gas prospects, and its existing petroleum and coal contracts. Another plus factor is the fact that the company is supported by its principal shareholders, Philex Mining and First Pacific, and a management team consisting of experienced professionals and business leaders,” PSE chairman Jose T. Pardo said during the listing ceremony.

Pardo said Philex Petroleum’s listing came on the heels of the issuance by the PSE of listing and disclosure requirements for petroleum and renewable energy firms.

“The PSE recognizes the importance of the energy sector and the listing challenges besetting such firms and have aligned exchange policies with best practices worldwide,” he added.

Manuel V. Pangilinan, chairman of Philex Petroleum, said yesterday Philex Petroleum’s IPO would depend on the work program for Service Contract 72, which contains the Sampaguita natural gas discovery in the Recto Bank area offshore West Palawan covering an area of 8,800 square kilometers.

Pangilinan said the service contract has a seven-year exploration period, divided into four sub-phases with an option to exit at the end of each sub-phase. SC 72 was awarded by the Department of Energy on Feb. 15, 2010 and is currently in the first sub-phase of the exploration period ending on Feb. 14, 2017. 

Carlo Pablo, president and chief operating officer of Philex Petroleum, said exploration activity and survey work for SC 72 will require an investment of $80 million over a two-year period, or until August 2013.

SC 72 is owned 70 percent by Forum Energy Plc, a UK-based oil and gas exploration company which, in turn, is owned 64.45 percent by Philex Petroleum.

An independent resource estimate at the Sampaguita discovery earlier indicated a mean of 3.4 trillion cubic feet gas-in-place with significant upside potential.

Pablo said the objective of the exploration work program is to prove up commercial quantities of natural gas and condensate to underpin the capital intensive development of pipelines and/or liquefaction facilities needed to transport the natural gas to markets in the Philippines and the region.

Pangilinan said the company also welcomes the entry of potential partners into SC 72 to speed up the development of the project. “If the gas field would require several billions of pesos, we have to talk to commercial partners not only to provide financial expertise but technical know-how as well,” he said.

Pablo said the company, which holds the energy and petroleum assets of Philex Mining, is also studying the possibility of bidding for other service contract areas. 

Philex Petroleum also owns 18.46 percent of Pitkin Petroleum Plc; 10.31 percent of PetroEnergy Resources Corp.; 100 percent of Brixton Energy & Mining Corp., a coal mining firm operating in northern Mindanao; and has overriding royalty interest in SC 6 (Cadlao),

The company recently acquired 70 percent of the Octon petroleum block in offshore Palawan from a consortium of local firms. Under the agreement, Pitkin, will shell out $5 million for 3D seismic studies over the area.