Forum Energy says profit plunged as Galoc oilfield production dropped

The gross profit of United Kingdom-based Forum Energy Energy Plc. plunged to $918,000 last year from $5.8 million a year earlier, partly because of lower oil production from the Gallo oilfield in offshore Palawan.

 

The company, which is 60.49-percent owned by Manuel V. Paneling’s Phil ex Petroleum Corp., is focused on oil and gas exploration in the Philippines.

 

Revenues dropped to $4.522 million from $12.7 million with the temporary closure of the Gallo oil field in early 2012 that prompted an 18.48 percent decline in production to 5,410 barrels of oil per day in 2012 from 6,637 bpd in 2011.

 

“Production from the Gallo development reached 1.5 million barrels gross in 2012 and is expected to produce 2.6 million barrels in 2013,” Robert Nicholson, Forum Energy chairman, said in a report which Phil ex Petroleum disclosed to the Philippine Stock Exchange. 

 

“The Company has a 2.27 percent percent interest in the field and received $2.5 million (from $10.1 million in 2011) after deduction of share of operating costs from crude sales from the field during the year,” said Nicholson. 

 

“A second phase of development is expected to commence in the second half of 2013 with the drilling of two additional production wells, which is expected to boost production from the current 5,410 bpd to 12,000 bpd in the third quarter of 2013, “ Nicholson added.

 

Forum Energy posted a net loss after tax of $26.4 million after impairment charges in 2012, compared with a net profit after tax of $3.4 million in 2011.

 

The company spent $2.3 million for the development of principal assets— Service Contract 72 covering the Guitarist oil field in the disputed Recto Bank in West Philippine Sea.

 

The Forum Energy official cited the territorial row between China and the Philippine as having an impact on the company’s exploration program.

 

“Whilst we received an independent report on Service Contract 72 in April 2012 which indicated increased resources, we were unable to commence our drilling program because of territorial disputes between the Philippine and Chinese governments,” Nicholson noted in his report.

 

The Department of Energy has extended Forum Energy’s work program to August 2015 from the original deadline of August 2013 so the company may complete its obligations under SC 72.

 

“In the meantime, and recognizing our on-going commitment to the project, a seismic reprocessing program is being planned in 2013 to further assess the prospectivity of other areas outside the Guitarist field within SC72,” said Nicholson 

 

“The program will concentrate on mapping other prospects and leads outside the Guitarist discovery,” he added.

 

“The search for new oil and gas deposits in the country is expected to continue in 2013 with the award of new petroleum and coal contracts following a bidding round that was undertaken in 2012,” the company noted in its report.

 

“The next phase of development in the Gallo and Malampaya fields in Palawan would help boost indigenous oil and gas production, respectively,” Forum Energy added. — VS, GMA News