PHINMA Petroleum and Geothermal, Inc. (PPG) has withdrawn from a service contract that sought to explore the possibility of geothermal energy in Leyte, the company told the stock exchange on Thursday.
The energy exploration company, a unit of Phinma Energy Corp., said it would recognize a loss of P32.7 million for the write-off of its share in expenditures incurred so far in Service Contract No. 51 (SC 51) in Eastern Visayas.
“This is equivalent to 22% of the Company’s total assets as of March 31, 2018,” the company said.
PPG has also informed the Securities and Exchange Commission on Wednesday that it had notified the Department of Energy (DoE) of its withdrawal from SC 51.
The company has a 6.67% participating interest in SC 51, but the stake could have been adjusted to 33.34% upon the DoE’s approval of the withdrawal of its original operator Otto Energy Investment Ltd., a unit of Australia-listed Otto Energy Ltd.
Otto Energy on May 5, 2014 notified PPG and the other partners in the consortium that it had elected to withdraw from SC 51, a move which is subject to DoE approval.
On June 28, 2014, the Filipino partners requested the DoE to suspend exploration for a phase of the project from the date of Otto Energy’s withdrawal and until the approval of the company’s participating interest to the locals.
In March and December last year, the Filipino partners reiterated their intent to carry on with the exploration of SC 51. They further signed a deed of undertaking to pay the outstanding financial obligation of Otto Energy amounting to $124,763.
Otto Energy started in April 2012 a 100-kilometer seismic program in the town of San Isidro, Leyte to pick the optimum location for the drilling of exploration block’s prospect.