Frontier Oil hopes to raise P1.6B from IPO

MANILA, Philippines - Upstream oil firm Frontier Oil Corp. is optimistic its planned initial public offering (IPO) in May or June would successfully raise P1.6 billion on the back of strong investor optimism and rosy economic prospects.

“The economy at the moment is extremely robust. In terms of an IPO, it’s a brilliant condition. The timing is perfect,” Frontier Oil CEO Kris Fellowes said in a phone interview.

He said proceeds of the fundraising activity would focus on bringing their onshore gas project and offshore oil field into commercial operations within the next two years.

“Fifteen to 18 months from the IPO we would focus on the onshore gas find in Service Contract 52 and offshore gas find in Service Contract 50,” Fellowes said.

SC 52 is a 96,000-hectare onshore oil and gas block located in the Cagayan Valley while SC 50 is the offshore gas field in Northwestern Palawan.

Fellowes said bulk of the estimated P1.6 billion in net proceeds would finance the development of the Northwestern Palawan gas field.

Frontier Oil earlier announced it had acquired 100 percent of the 5000-square kilometer SC 50 in Northwestern Palawan gas field, including the proven Calauit oil fields, from Frigstad Energy, an international oil drilling company.

The SC 50 and Calauit acquisitions expand Frontier Oil’s portfolio ahead of the planned IPO, Fellowes said.

It is part of the company’s strategy to become a significant oil and gas player in the country, he also said.

“Along with the recent encouraging results shown by the SC 52 competent person’s report, the company stands well placed in anticipation of its IPO in late second quarter 2013,” Fellowes said.

Frontier Oil is also an oil and gas exploration firm, which has a 20-year history in the Philippines through various oil and gas project. It also has a subsidiary that is involved in projects in China.

The Nassiping-2 or SC 52 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 would build a gas-fired power plant that will make use of the Nassiping project’s output.