FECOF .029/FEP - Philex unit to spend $80M; stocks soar
NEWLY LISTED exploration firm Philex Petroleum Corp. bared plans to invest up to $80 million for natural gas exploration in the controversial Reed Bank in its debut on the stock exchange yesterday.
PHILIPPINE STOCK Exchange Chairman Jose T. Pardo (2nd left) and Philex Mining Corp. Chairman and Chief Executive Manuel V. Pangilinan (2nd right) ring the opening bell yesterday as Philex Petroleum Corp. debuted on the local bourse. -- AFP
Shares of the company, a unit of the country’s top miner Philex Mining Corp., jumped about 10 times to as much as P13 before paring some of its gains to close nearly 617% higher against a listing price of P1.20 even as its drilling site is part of a territorial dispute covering the South China Sea.
It listed 1.7 billion common shares on the local bourse by way of introduction, which does not require an initial public offering.
About 35% of its shares had been distributed to shareholders prior to the listing.
Amid this backdrop of investor interest, the firm yesterday said it was looking to spend an estimated $80 million over two years until 2013 for initial survey work at the Sampaguita gas field in offshore Palawan covered by Service Contract (SC) 72.
The prospect was initially found to contain 3.4 trillion cubic feet of natural gas.
An estimated $20 million of the investment is expected to be bankrolled by the exploration company’s parent firm, Philex Petroleum Chief Operating Officer Carlo S. Pablo said.
The goal is to develop the site into the “next Malampaya”, Mr. Pablo said, referring to the gas field also in offshore Palawan.
“[SC 72] is a resource that should be developed or at least explored to see if it warrants significant investment,” Manuel V. Pangilinan, Philex Mining chairman and chief executive, added. Philex Mining shares also rose by 0.37% or 10 centavos to P27.10.
The steep rise in share prices reflected strong market interest in mining and oil firms considered as defensive stocks, said Jose L. Vistan, research head at AB Capital Securities.
This comes even as Philex Petroleum will be doing exploration work in disputed regions of the South China Sea. Philex Petroleum will continue to coordinate with the government for its drilling activities, Mr. Pablo said.
“All we can do is communicate well with the Philippine government,” Mr. Pangilinan echoed.
Hong Kong’s First Pacific Co., Ltd., the single largest shareholder in Philex Mining, partly owns Philippine Long Distance Telephone Co. (PLDT). Mediaquest Holdings, Inc., a unit of the PLDT Beneficial Trust Fund, has a minority stake in BusinessWorld. -- Franz Jonathan G. de la Fuente with Reuters
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