MANILA, Philippines - The Securities and Exchange Commission (SEC) has approved the application of Frontier Oil Corp. to sell more than P2 billion worth of its shares to the investing public.
The oil exploration firm plans to sell 883.62 million common shares at an offer price of up to P2.50 apiece, or a total value of P2.209 billion. It also applied for the shelf registration of 17.95 million shares that can be sold for as much as P2.50 per share or a total of P44.87 million.
“The shares shall be listed and traded on the main board of the Philippine Stock Exchange,†the SEC said.
Frontier Oil, which is looking to list in the local bourse on Dec. 9, will use the proceeds of its initial public offering (IPO) for general working capital and for the development of Service Contracts (SC) 50 and 52.
“SC 50 and 52 will provide the platform for the company’s continuing growth and success,†Frontier Oil said.
“Frontier Oil’s core focus is to finalize the two drilling campaigns, which seek to determine the commerciality of both Calauit and Nassipping,†it added.
In February, Frontier Oil acquired from Singapore-based oil drilling firm Frigstad Energy Ltd. the rights to the 5,000-square kilometer SC 50, which requires P1.55 billion for development.
Frontier Oil said it will also spend P256.87 million for the 96,000-hectare SC 52, an onshore oil and gas block located in Cagayan Valley.
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.
Frontier Oil also owns 15 percent of SC 69 located offshore in the Visayan Basin and five percent of SC 55 situated in offshore Southwest Palawan.
The government is supporting such projects as it pursuing energy independence and sustainability through the development of indigenous energy resources like coal, petroleum and natural gas.
To date, there are 27 SCs in the Philippines. 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.
Frontier Oil’s IPO will be facilitated by issue managers Philippine Commercial Capital Inc. and Unicapital Inc.
Four firms have so far debuted in the local bourse this year: Philippine Business Bank, Asia United Bank, Del Monte Pacific Ltd. and AG Finance Inc. Soon-to-be-listed firms are tugboat operator Harbor Star Shipping Services Inc., Gokongwei-led Robinsons Retail Holdings Inc. and Travellers Hotel Group Inc.