PXP Energy Corporation (formerly Philex Petroleum Corporation)

PXP Energy Corporation (PXP or the Company), formerly Philex Petroleum Corporation, is a Philippine corporation organized in December 2007 and listed on the second board of the Philippine Stock Exchange (stock symbol: PXP) on September 12, 2011.

The Company is mainly involved in the exploration and maturation of local and international hydrocarbon resources. It has interests in various petroleum Service Contracts (SCs) in the Philippines and a petroleum block in Peru held directly and through its major subsidiaries, Forum Energy Limited (FEL) and Pitkin Petroleum Limited (Pitkin).

The Company’s direct interest in Philippine petroleum SCs includes a:

• 50% operating interest in SC 75 (Northwest Palawan);
• 70% operating interest in SC 74 (Linapacan, Northwest Palawan);
• 5.56% interest in SC 6A (Octon, Northwest Palawan);

The Company holds a 79.13% controlling interest in FEL, with 72.33% held directly and 6.80% held indirectly through a 78.39%-owned subsidiary, FEC Resources, Inc. (FEC). FEC is a Canadian public company registered with the U.S. Securities and Exchange Commission, the Alberta Securities Commission, and the British Columbia Securities Commission, and quoted in North America.

FEL is a company incorporated in the United Kingdom, with focus on the Philippines. It has a:

• 70% operating interest in SC 72 (Recto Bank) which covers the Sampaguita natural gas discovery in offshore West Palawan, held through Forum (GSEC 101) Limited (FGL);
• 100% operating interest in SC 40 (North Cebu) held through Forum Exploration, Inc. (FEI); and
• 3.21% interest in the producing Galoc Field, held through Forum Energy Philippines Corporation (FEPC).

PXP also holds a 53.43% controlling interest in Pitkin, an upstream oil and gas company registered in the United Kingdom.

To expand the company’s portfolio, PXP Energy participated in a bidding round for a prospective block in the Sandakan Basin, Sulu Sea (Area 7) as well as nominating a block in the Recto Bank area north of SC 72 (Block A).

Area 7 is located in the Sandakan Basin, a Tertiary age sedimentary basin with water depths ranging from 200 meters to as much as 2,000 meters. With an area of 3,580 sq. km, it was one of the 14 predetermined areas (PDAs) offered by the DOE in 2018 under the PCECP. The area is covered by both 2D and 3D seismic data and a total of six exploratory wells have been drilled by previous contractors from 1989 to 2008. It was previously covered by SC 41 held by a group of Filipino and Australia-based companies that voluntarily surrendered the area in August 2010 after the 10-year exploration permit ended. On the north of the block is SC 56 where ExxonMobil previously drilled four wells, three of which were declared as discovery wells.

Block A is located north of and contiguous with SC 72 in offshore northwest Palawan, which is about 180 to 375 km away from the nearest Palawan island. It covers all of Nares Bank and parts of the greater Recto Bank with an area of 14,300 sq. km. The water depth across the Block broadly ranges from 20 to 2,500 meters. Apart from a few academic studies using mostly potential fields geophysical data, and the legacy Joint Marine Seismic Undertaking (JMSU) 2D dataset which is not available to PXP, there are no recent subsurface data in Block A. The closest relevant subsurface information in Block A comes from SC 72 with Reed Bank A-1 and B-1 wells being located in the northern part of SC 72.

The application for these two new Service Contracts remains under review with the Department of Energy.

A summary of the exploration and production assets held by PXP and its subsidiaries are as follows:

PXP Energy Corporation

Forum Energy Limited