Forum Energy losses mount due to gas project

MANILA, Philippines – Forum Energy, a British oil and gas company controlled by Manuel V. Pangilinan-led Philex Petroleum Corp., booked a net loss in 2012 after it wrote down the value of one of its gas assets.

Forum Energy said it had a net loss of US$26.4 million in 2012, reversing its net profit of $3.42 million the previous year due to an impairment charge related to Service Contract (SC) 40, which covers the Libertad and Maya gas fields.

The company said estimated cash flows from SC40 declined markedly after a third-party assessment experienced a dry hole while drilling, which “significantly reduced the likelihood of a commercially viable hydrocarbon deposit in this region.”

“Whilst our net loss this year was significant, this predominantly related to our recognition of the need to revalue our non-core assets at SC40, following receipt of a new independent report on resource estimates,” said Robin Nicholson, Forum Energy’s Executive Chairman.

“We remain focused on our key asset, SC72, and on our goal of establishing the commerciality of the potential hydrocarbon resources within the SC72 concession,” he added.

Forum Energy has a 70% interest in SC72, which covers oil and gas-rich Reed Bank off Palawan in the South China Sea (also West Philippine Sea).

In 2012, tensions between the Philippines and China over the territory hampered the company’s drilling program. Due to its inability to deploy vessels to the area, the Department of Energy allowed the company to extend its second sub-phase work obligations estimated to cost over $50 million. – Rappler.com