Forex loss and income tax weigh down PXP Energy

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PXP ENERGY Corp. posted a bigger consolidated net loss of P39.1 million in 2017, weighed down by foreign exchange losses and higher tax provision, the company told the stock exchange on Wednesday.

The net loss in 2016 was at P22.4 million, the upstream oil and gas company said. Including one-off items, reported net loss hit P57.1 million, wider than the P36.4 million recorded in 2016.

The company said the losses increased despite the reduction in loss from operation because of a P100,000 loss in foreign exchange, which reversed gains of P13.4 million in 2016. It also pointed to the provision for income tax of P2.3 million as against the benefit from the same tax of P12.3 million in the previous year.

It said the slight higher petroleum revenues at P104.4 million resulting from the 24% improvement in crude oil prices had been offset by the 18% drop in crude production.

PXP directly and indirectly owns oil and gas exploration and production assets in the Philippines, and indirectly owns an exploration asset located in offshore Peru.

Cost and expenses during the period declined by 7.4% to P158.2 million from P170.8 million brought about by lower petroleum production cost and depletion, and continuous cost containment of group overhead, the company said.

It highlighted the events of last year to include the repurchase by subsidiary Pitkin Petroleum Ltd. on March 7, 2017 of 11.43 million shares or 12.98% of the unit’s total issued shares at $0.35 per share for a total of $4 million.

For its part, PXP sold 6.107 million or 12.98% of its Pitkin shares and received approximately $2.1 million. Minority shareholders also sold 12.98% of their shares and received around $1.9 million.

“PXP’s 53.43% interest in Pitkin remains the same following the transaction,” the company said.

On March 23, 2017, PXP increased its direct shareholding in Forum Energy Ltd. to 69.5% from 48.8%. The move increased PXP’s total direct and indirect interest in Forum to 77.5% from 67.2%.

The additional interest was acquired through a subscription to 39,350,920 new ordinary shares of Forum, it said. The new shares were issued at about $0.30 per share for a total of $11.805 million. They were   funded through the conversion into equity of a portion of PXP’s $18.3 million loan to a subsidiary of Forum.

On May 17, 2017, PXP further increased its direct shareholding in Forum to 71%, from 69.5%, which resulted in an increase in its total direct and indirect interest in the unit to 79% from 77.5%.

It said the additional interest was acquired through the purchase of 1.185 million shares held by a subsidiary of First Pacific Co. Ltd. and a shareholder of PXP. The shares were bought at $0.30 per share for a total of $360,000, which was paid in cash.

“Forum’s principal asset is a 70% interest in SC [Service Contract] 72 Recto Bank. The said increases in PXP’s interest in Forum translates to an increase in economic interest in SC 72 from 41.2% to 52.8%,” PXP said.

On Wednesday, shares in PXP rose 1.89% to P18.34 each. — Victor V. Saulon