Manny V. Pangilinan-led PXP Energy significantly cut its losses last year with plug and abandonment costs reduced while waiting for the government’s go-signal for the resumption of exploration activities.
In a statement, the company reported that its consolidated net loss amounted to Php76.3 million, nearly three-fourths less than the Php297 million loss it registered in 2019.
The losses stemmed from continuously declining production from its Service Contract (SC) 14-1C facility, or the Galoc Oil Field in the West Philippine Sea (WPS), aggravated by the COVID-19 pandemic.
Consolidated petroleum revenues also dropped by 58.3% to Php30.3 million from Php72.5 million the previous year with output declining to 750,506 barrels from 993,761 barrels year-on-year.
While revenues fell, consolidated costs and expenses were also but by nearly half or 48.2% to Php98.7 million in 2020 from Galoc.
The company’s general and administrative expenses also went down by 38.6% to Php64.5 million from Php105 million the year prior. This was due to a 4.6% decrease in recurring overhead at Php63.6 million from P66.7 million in 2019, as well as a significant reduction in non-recurring plug and abandonments costs, which stood at Php0.9 million from Php38.4 million last year.
Pres. Rodrigo Duterte in October 2020 lifted the nearly six-year moratorium on exploration activities in the WPS. As a result, the Department of Energy issued “resume-to-work” notices for Forum (GSEC 101) Limited-controlled SC72 (Recto Bank) and PXP Energy’s SC75 (Northwest Palawan). Both SC areas are located in the WPS, the subject of a highly-contested territorial dispute between the Philippines and China.
PXP Energy indirectly owns Forum (GSEC 101) Limited.
“Forum and PXP will take guidance from the Philippine Government with respect to fulfilling its work commitments in SC72 and SC75,” PXP Energy said.