Frontier Oil mulls higher IPO volume of P2.2 B

MANILA, Philippines - Local oil and gas explorer Frontier Oil Corp. is contemplating on raising its planned initial public offering (IPO), proceeds to P2.2 billion, higher than the previous target of P1.6 billion, company officials said.

Frontier Oil has  filed its IPO prospectus report with the Securities and Exchange Commission (SEC) on Monday, chief executive officer Kristoffer Fellowes  said in a briefing.

 â€œFollowing the filing of our initial documents with the SEC on Monday, we are now finalizing a landmark listing on the Philippine Stock Exchange (PSE) by yearend,” he said.

While company officials have no specific date yet for the listing, Fellowes said Frontier  oil is unfazed by the market jitters that have been hounding the local bourse over the past few months.

“What we have is basically an opening up of the oil and gas sector locally. This is too fundamental to the economy to be concerned about fluctuations,”  he said.

“We are planning to list this year,” he added.

Originally, the company was aiming to hold the IPO in May or June but remains optimistic this can be done within the year.

Frontier  oil chairman Astro del Castillo agreed that prospects for listing remain positive given the economy’s strong fundamentals.

Fellowes said proceeds from the fundraising activity would focus on bringing the company’s onshore gas project and offshore oil field into commercial operations within the next two years.

He said bulk of the IPO proceeds would go to Service Contract 50 in Northwest Palawan, also known as the Calauit oil field which covers 1,280 square kilometers.

The drilling date is programmed on the first quarter of 2014, Fellowes said, with an estimated initial cost of $54 million.

Another project is SC 52, a 960-square kilometer onshore oil and gas block located in Cagayan Valley.

“SC 52 hosts the Nassipping gas field, which has been validated as being a genuine gas deposit some 28 years after its initial discovery in 1984,” Fellowes said.

The estimated project cost is $8.5 million, with the estimated first revenue on November 2014.

Fellowes said there may be other prospective projects.

 â€œI’ve got my eye on a few. I think the advantage we have at the moment is that there are near-term projects that form the majority of our portfolio. There are also a number of near-term projects that are begging for development. I think that will be our focus for the near-term. We’ll be getting projects that will lead to cash flow over a short period of time,” he said.

Frontier oil’s listing is part of the company’s strategy to become a significant oil and gas player in the country, the officials pointed out.

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