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President Duterte’s signal for the resumption of oil and gas exploration in the Western Philippine Sea has piqued investors’ appetite for mining / oil stocks with economic interest in service contracts disrupted by the Philippine-Philippine territorial dispute. China for the past six years.
The biggest beneficiaries were PXP Energy Corp. and Atok Big Wedge, whose shares rose nearly 50 percent due to a West Philippine Sea exploration play on the market on Friday.
Apex Mining gained 34.84 percent and was the most actively traded company on the day.
Shares of PXP’s parent, Philex Mining, rose 20.76 percent. The mining / oil counter was up 10.79 percent.
The Philippine Stock Exchange Major Equity Index (PSEi), however, lost 39.86 points or 0.67 percent to close at 5,898.47, as investors cut their holdings of large-cap stocks to focus on actions outside the PSEi.
“We can only assume that the unusual price movement [on mining/oil stocks] it can be attributed to the announcement that President Duterte lifted the moratorium on oil and offshore exploration in the Western Philippine Sea … ”Atok Big Wedge said in a statement to the Philippine Stock Exchange.
The Secretary of Energy, Alfonso Cusi, delivered the notice of “resumption of work” to the service contractors that carry out oil exploration in the service contracts (SC) 59, 72 and 75.
Tidemark Holdings Ltd., a subsidiary of Atok Big Wedge, has a 20 percent stake in Forum Energy Ltd., which in turn has a 70 percent economic interest in SC 72, offshore western Palawan and is headquarters of the Sampaguita gas discovery. Drilling in the area was suspended in 2014 pending the resolution of sovereign territorial disputes.
PXP holds 79.13 percent in Forum Energy.
Apex Mining’s unit, Monte Oro Resources & Energy, has a 30 percent stake in SC 72.
Meanwhile, the PSEi ended the week on a slow note. Market breadth was positive with 118 advances, 89 declines, while 46 stocks were unchanged. —DORIS DUMLAO-ABADILLA
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