Razon consolidates interest in WPS exploration firm

The Razon Group is consolidating its stake in a company with oil and gas exploration contract in the West Philippine Sea (WPS).

In a disclosure on Tuesday, Apex Mining Co. Inc. said Prime Oil and Gas Inc. had offered to acquire the 30-percent participating interest of Monte Oro Resources and Energy Inc. (Morei) in Service Contract (SC) 72.

Morei and Prime Oil and Gas are both part of the Razon Group.

Prime Oil and Gas is an indirect subsidiary of Prime Strategic Holdings Inc., which is also the parent company of Apex Mining. On the other hand, Morei is a wholly owned subsidiary of Apex Mining.

SC 72, which covers an area of 8,800 square kilometers, is situated west of Palawan Island and southwest of the Malampaya Gas Field.

To date, exploration activities at SC 72 remains suspended due to force majeure. The Department of Energy (DOE) suspended exploration activities in April 2022 due to geopolitical tensions with China in the West Philippine Sea.

Forum (GSEC 101) Ltd., under PXP Energy Corp., a listed entity led by tycoon Manuel V. Pangilinan, is the operator of SC 72, holding a 70-percent stake in the service contract.

Apex Mining said the transaction is subject to the DOE’s approval.

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It will undergo a valuation exercise to determine the value of the asset and the consideration of the proposed deal, due diligence results and mutually acceptable definitive agreement.

“Morei has engaged the services of an accredited third party professional valuer to assist in the determination of the value of the 30-percent participating interest in SC72,” the mining firm said.

Apex Mining recorded a 68-percent surge in net income in the first semester of this year, ending at P5.39 billion, driven by elevated metal prices. Revenues climbed by 35 percent to P12.84 billion.

The listed mining firm reported higher earnings despite a decrease in metal grade and sales during the period, as it benefited from significant increases in metal prices and the depreciation of the Philippine peso against the US dollar.