PX,PXP — Would You Subscribe Billions like Philex did to Philex Petroleum?
Disclaimer: The views expressed here are solely those of the author and do not in any way represent the views of his employer or any other organization.
About PXP Energy Corporation
PXP is an upstream oil and gas company incorporated in the Philippines whose shares are listed on the Philippine Stock Exchange. The Company directly and indirectly owns oil and gas exploration and production assets located in the Philippines, and indirectly owns an exploration asset located in offshore Peru.
Technicals:
What’s going on PXP? The prior resistance of 14 has now served as its support. Although a resistance of 19.62 proved to cap the upside temporarily , is there a likelihood that from 14 we see a move towards 19 and towards 32? This would mean a 40% rise and a 62% rise afterwards or a total potential gain of 126%. Let’s look at what’s under the hood.
Philex Petroleum currently trades at P15.46 with a market capitalization of P25.8B on outstanding 1.7Bil shares. What’s fueling the increase in price since January 2018 from a 52 week low of 7.81 to a 52 week high of 19.7 has been the joint venture agreement with CNOOC especially as Recto Bank holds huge gas reserves, larger than Malampaya. Let’s check all the recent events.
Dec 27, 2018 — Relevant Disclosures
Philex has paid 25% or Php770.25million or 65 million shares at P11.85/share. Philex will subscribe 260 million shares or a total consideration of P3.081 Billion.
Dennison Holdings will subscribe 340 million shares or a total price of P4.03 billion. Dennison must pay on or before January 7,2019 at least 1% or 40.3 million pesos and the entire subscription price before March 31, 2019. If this is not met, the amount will be forfeited in favor of PXP.
Furthermore, the full payment of the subscription price will entitle Dennison at least one seat in the board to nominate Vice Chairman as well as all other rights of a shareholder.
Dec 21, 2018 — Request to Lift Force Majeure in SC 72
Nov 9 2018 — Details on PX Subscription to New 260M common shares of PXP
11.85 = 20% discount on VWAP
Listing of the new shares will be 5 trading days after full payment of subscription price
Use proceeds to fund exploration activities within Philippines, Peru and repay advances from Philex
25% — Paid within 60 calendar days (Done as can be seen on Dec 27, 2018)
75% — Paid under the earlier option of Board of Directors of PXP or a contemplated stock rights offering
Oct 26, 2018 — Subscription and Signing of Dennison Holdings and Philex Mining
600 M new shares of PXP at 11.85
The deal increases Philex Mining’s stake in PXP from 19.76% to 25.91%.
PXP Energy will be raising some P7 billion from the subscriptions.
The deal also specifies that Dennison will grant “preferential rights” to PXP Energy and acquire up to 49% interest in the planned joint venture of Uy’s Phoenix Petroleum and China National Offshore Oil Corporation (CNOOC).
Uy’s Phoenix Petroleum was able to strike a deal with a unit of CNOOC last June to develop a receiving terminal for imported liquefied natural gas in the Philippines.
PXP Energy directly and indirectly owns oil and gas exploration and production assets in the Philippines, and indirectly owns an exploration asset located in offshore Peru.
The company previously called for the lifting of the moratorium on exploration activities in the West Philippine Sea, and even went on to say that the move is of “national interest.”
PXP Energy has a stake of about 79% in Forum Energy, a London-listed firm that has a controlling interest in offshore exploration Service Contract (SC) 72 in the West Philippine Sea.
***
I’ve also included all the other deals Dennis Uy had made in the year 2018.
https://www.rappler.com/business/175419-dennis-uy-davao-tycoon-duterte-connection
Oct 24, 2018 — Financial Results Irrelevant as Company Focuses more on working with the government to lift the Force Majeure.
Points Highlighted:
- Sept 21 2018 — Positive Impact — Peru — Force Majeure lifted from Block Z-38; Karoon and new farm-in partner Tullow can move forward to drill Marina 1X Exploration well during early 2020.
- Malampaya Gas Resource currently supplies 40% of Luzon’s power requirements and this can be exhausted within the next decade, hence exploring alternative gas resources such as SC 72 and SC 75 is of national interest.
Sept 25 2018 — Removal of Force Majeure — Block Z-38, Peru
- *** Where does the speculations lie? It starts from the Malampaya Gas Field.
Malampaya gas field is the most significant discovery made in partnership between Shell Philippines and Occidental Petroleum in 1992 under SC 38 with proven reserves of about 2.7 trillion cubic feet of natural gas reserves and 85 million barrels of condensate located 3000 meters below sea level. It supplies 40% of Luzon’s energy requirements but is projected to end by 2024. Malampaya operators are now searching for other gas sources — Enter WPS. West Philippine Sea.
Foreign journalists noticed as early as 2015 that a change in foreign policy stance can finally encourage the development of a joint seismic study agreement with China. Take a read at the snapshots below.
Chinese Communist Party — South China Sea Stance in light of National Humiliation
An Excerpt by J Michael Cole writes:
Having attained a certain level of respectability in international relations, Beijing is no longer a “status quo” power. It therefore has less compunction in seeking to undermine or reconfigure global institutions when it sees fit, to “reorder the world” so as to better align the system with the new norms created by China’s reemergence as a major civilizational power.
The fate of the Permanent Court of Arbitration’s ruling is already sealed. Appealing to international law may have been a good idea on paper, but from the outset it had no chance of having any impact on the dispute.
China is almost finished transforming seven reefs claimed by the Philippines in the Spratly archipelago into island fortresses, in a bid to dominate the heavily disputed South China Sea.
Most of the photos, taken between June and December 2017, were snapped from an altitude of 1,500 meters and they showed the reefs that had been transformed into artificial islands in the final stages of development as air and naval bases.
Shown the photographs, Eugenio Bito-onon Jr., the former mayor of Kalayaan town on Pag-asa Island, the largest Philippine-occupied island in the Spratlys and internationally known as Thitu Island, recognized new facilities on the man-made isles.
Amti, which described 2017 as a “constructive year for Chinese base building” in the South China Sea, noted the presence of underground tunnels, missile shelters, radars and high-frequency antennas on the artificial islands.
The photos obtained by Inquirer.net showed the consistent presence of cargo vessels believed to be used in transporting construction supplies to the artificial islands.
Note the reversal in tone of Chief Justice Carpio from November 26 versus March 2 2018.
Most every Filipino should read the MOU that Philippines and China had signed.
Further Readings: PX,PXP,APX,PNX,2GO,CLC,ISM, Dennis Uy, Udenna Corporation
I am still growing Udenna’s portfolio. We don’t know yet what is really its core businesses. We are still fixing, cleaning, and adding more people to our organization. Hopefully, in the next few years, we can list Udenna on the stock exchange, depending on the opportunities presented,” Uy said.
$PX https://www.tradingview.com/x/hpGd1Qq3
Philex Mining on January 2 2019 started the first trading day of the year with 5million shares trading with a VWAP of 3.29 as a foreign house acquired 1 million shares or 20% of total volume for the day. It will be interesting to watch whether a reversal of fortunes finally occurs towards these mining companies. Philex owns nearly 26% stake in Philex Petroleum. Philex’ marketcap today is approximately 13 Bil.
Interesting times right?
