Phinma Energy Corp. on Friday announced plans to relinquish its 14.063-percent participating interest in service contract 6 Block B covering the East Cadlao prospect.
“The company believes that the remaining prospects in the block are either uneconomic or extremely high risk and, therefore, do not warrant further investments,” Phinma Energy said. The Department of Energy approved the the company’s request on October 30, 2018.
The company, however, retained its 2.475-percent carried interest in the block, a non-paying interest comparable to a royalty that shares in any production revenues, to ensure Phinma Energy would still benefit from any commercial oil production in the area.
AC Energy Inc., a unit of conglomerate Ayala Corp., earlier acquired a majority stake in Phinma Energy. AC Energy signed an agreement to purchase 51.48 of Phinma Energy for P3.42 billion.
AC Energy said it would acquire Phinma Group’s combined 51.48-percent stake in Phinma Energy through a secondary share sale. The Ayala unit signed the agreement with Phinma Corp. and Philippine Investment Management Inc.
AC Energy president and chief executive officer Eric Francia earlier said it was studying options on the oil and gas assets of the Phinma Group under Phinma Energy.
“The upstream oil and gas is not our core. They do own listed vehicle, Phinma Petroleum, which owns a few service contracts. We’ll need to study what to do with those after the deal closes but we have no intentions of going into oil and gas exploration,” Francia said.
Phinma Petroleum and Geothermal Inc.., formerly Trans-Asia Petroleum Corp., is a wholly-owned subsidiary of Phinma Energy. The company’s primary business is the exploration and production of crude oil and natural gas through interests in petroleum contracts and through holdings in resource development companies with interests in petroleum contracts.
Francia said AC Energy might divest the oil and gas business of Phinma Energy but “we haven’t made a decision yet.”
“But at this point, we don’t have a mandate from the board to pursue oil and gas. But we have no plans, we want to be focused on renewables,” he said.