Phinma Petroleum contractor Century Red withdraws from SC55

PHINMA Petroleum Geothermal - Phinma Petroleum contractor Century Red withdraws from SC55

PHINMA Petroleum and Geothermal, Inc. (PPG) said Friday that one of the co-contractor partners of its subsidiary in an exploration service contract in offshore Palawan had assigned its interest in the project to another exploration firm.

PPG, whose change of name to ACE Enexor, Inc. was approved by shareholders earlier this week, told the stock exchange of Palawan55 Exploration and Production Corp.’s receipt of the deed of assignment from Century Red, Pte. Ltd.

Century Red assigned its 37.7% interest in Service Contract (SC) No. 55 to Palawan55 subject to the approval of the Department of Energy (DoE).

“Century Red is effectively withdrawing as co-contractor in SC 55, leaving Palawan55 and Pryce Gases, Inc. as the remaining co-contractors,” PPG said.

It said upon the DoE’s approval of the assignment, the participating interest of Palawan55 in SC 55 will increase to 75%. Pryce Gases, a unit of listed firm Pryce Corp., holds the rest.

Based on the company’s information statement submitted to the Philippine Stock Exchange last month, SC 55 is one of four service contracts in which PPG intends to maintain its participation in the next 12 months.

It said in the event that these contracts are successful, the company will reap revenue that will more than offset losses incurred. The service contracts are in the exploratory stage, that is, without any commercial production.

On Aug. 9, the SC 55 consortium notified the DoE of its entry into the appraisal period of the project effective on Aug. 26. The co-contractors committed to drill one deep-water well within the first two years of the appraisal period.

After the reinterpretation of certain seismic data outside of the current study area, they may undertake a new 3D seismic program to mature other prospects within SC 55 to drillable status. The SC 55 consortium submitted an indicative appraisal work program to the DoE to support this commitment.

Palawan55 generated SC 55’s final 3D seismic reprocessing report, which significantly upgraded the quality and resolution of the seismic data that were originally separately acquired and processed by former operators in 2012.

In the next 12 months, Palawan55 will undertake drilling scenario planning and budgeting, definitive well planning and well drilling. It will also conduct reinterpretation of vintage seismic data.

PPG said it has long-term plans of bringing in a strategic partner with the financial and technical capability to develop its petroleum assets.

“As customary in the oil exploration and production industry, it is likely that the strategic partner be brought in through a farm-out of a portion of the interest of Palawan55 in SC 55,” it said in its information statement.

On Friday, PPG rose 5.78% to P9.70. — Victor V. Saulon

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