MANILA, Philippines - UK-based Pitkin Petroleum Plc majority owned by Philex Petroleum Corp., has decided to abandon its plan to take a 70 percent interest in Service Contract 6A in northwest Palawan known as the Octon Block.
In a disclosure to the Philippine Stock Exchange, Philex Petroleum said Pitkin would be reassigning its participating interest back to the farm-out partners after completion of the Phase 1, work program on Dec. 31,2014.
Philex Petroleum is a unit of Philex Mining which owns 53 percent of Pitkin. Philex is part of the companies owned by businessman Manuel V. Pangilinan.
The reassigment of Pitkin’s participating interest will be subject to the approval of the Department of Energy, Philex said.
“Pitkin Petroleum Plc, a 53 percent-owned subsidiary, has elected not to enter Phase 2 of a farm-in agreement to earn a 70 percent participating interest in Service Contract 6A (Octon Block) in NW Palawan,” Philex said.
“As a result of Pitkin’s exit from the Octon Block, Philex Petroleum will be recording an impairment loss of approximately P300 million during the third quarter of 2014,” it added.
Pitkin signed the farm-in agreement with the Octon Block partners in 2011 to earn a 70 percent participating interest. In exchange, Pitkin agreed to fund a three-phase work program.
The other consortium holders of SC 6A are Philodrill, Alcorn Gold Resources Corp., Anglo-Philippine Holding Corp., Forum Energy Philippines Corp., PetroEnergy Resources Corp., Philex Petroleum and Trans-Asia Oil and Energy Development Corp.
The Octon Block is estimated to contain up to three million barrels of oil reserves and 34 billion cubic feet of natural gas reserves.