MANILA, Philippines - Upstream oil firm Frontier Oil Corp. is set to list in the local bourse in May or June, raising $50 million through an initial public offering (IPO).
Following the fundraising, the company will focus on bringing its onshore gas project and offshore oil field into commercial operations within the next two years, its top executive said.
“Things are going according to plan. A number of significant investors and underwriters already expressed their interest,†Frontier Oil CEO Kris Fellowes said in a phone interview.
Fellowes said Frontier Oil will conduct meetings with underwriters this week to choose the best proposals.
“The anticipated listing date is late in the second quarter, in May or June,†Fellowes said.
Bulk of the estimated P1.6 billion in net proceeds will be used to fund the development of an offshore gas field Northwestern Palawan, Fellowes said.
Last week, Frontier Oil acquired from Singapore-based oil drilling firm Frigstad Energy Ltd. the rights to the 5,000-square kilometer Service Contract (SC) 50.
Frontier Oil said while previous assessments had indicated a total potential of between 3.1 million and seven million barrels of oil in place, further in-depth studies have suggested an upside potential in excess of 14 million barrels.
Fellowes said 80 percent of the IPO proceeds will be allotted for the Calauit oil field in SC 50.
“We have offshore gas finds, which we want to get onstream in terms of commercial production within 12 to 15 months from listing,†Fellowes said.
To date, there are 27 SCs in the Philippines involving Shell Philippines Exploration B.V. and Nido Petroleum. However, only the Malampaya and Galoc oil fields in Northwest Palawan are in regular production.
The Philippines produces only 6,000 barrels of oil per day, way below the demand of around 300,000 barrels per day, data from the Department of Energy showed.
“I think the Philippines is one of the most underexplored countries in the world. It has serious potential for oil and gas,†Fellowes said.
Meanwhile, Frontier Oil will also focus on the 96,000-hectare SC 52, an onshore oil and gas block located in the Cagayan Valley.
The Nassiping-2 is an existing well containing a previously discovered but untested gas discovery. It was drilled in 1984 and penetrated a substantial, gas-bearing limestone section but was not flow-tested.
Fellowes said Frontier Oil will build a gas-fired power plant that will make use of the Nassiping project’s output.