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SECURITIES AND EXCHANGE COMMISSION SECBuilding,EDSA,Gr€enhills,MandaluyongCity,MetroManita,philippines Tel:(632)72S0931 to 39 Fax(632)72$5293 Emait: mis@sec.gov.ph
Barcode Page The following document has been received:
Receiving Officer/Encoder : Fernando T. Fernandez Receiving Branch : SEC Head Office Receipt Date and Time : November 14, 2013 i1i47:O7 AM Received From
: Head Ofiice
Company Representative
Doc Source Company Information SEC Registration No.
AS94008880
Company Name
PETROENERGY RESOURCES CORP.
Industry Classification Company Type
Stock Corooration
Document Information Document lD
111142013001326
Document Type
17-Q (FORM 11-Q:QUARTERLY REPORT/FS)
Document Code
17-Q
Period Covered
September 30, 2013
No. of Days Late
0
Department
CFD
Remarks
COVER SHEET
A
S 0 9 4
0 0 8 8 8 0 Number
PE T R o E N E R G Y
7
T H
F
GIAIS
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P A s
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AnL,q,IpJRorETA (Contact p€rson)
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c o
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I
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R T
N
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637-2917 (Company Telephon€ Number)
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Day
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R A T
T Y
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(Annual Meeting)
(secondary Lrcense T'?e, tf Applicable)
Amended Anicles Numb€r/Section Total Amount of Borrowinss
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To b€ accomplished by SEC pe$onnel concemed
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----_---GFc-STAMPS Remarks: Please use BLACK ink for scanning purposes.
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SECURITIES AND EXCHANGE COMMISSION SEC FORM I7-Q
QUARTERLY REPORT PURSUANT TO SECTION I I OF THE SECURITIES REGULATION CODE (SRC) AND SRC RULE l7(a)-1(b) (2) THEREUNDER
30 September 2013 For the quarterly period ended 2.
SEC Identification
3.
PeffoEnerqy Resources Comoration
n
Manila, Philippines
Number ,45094-008880 3.
BIR Tax ldentification No. 004-471-419-000
(SEC Use Only)
5.
Industry Classifi cation Code:
of incorporation 6.
As.,rers ur pnncrpat
ornce
postal Code
7.
(632\ 637-29t7
8.
Securities registered pursuant to Sections 4 and 8 ofthe SRC
Title of Each Class
Number ofShares ofCommon Stock Outstanding
Common (par value of P1.00/share)
273,824,220
Amount ofDebt Outstanding = S55.858 Million 9.
10.
Are any or all ofthe securities listed on the philippine Stock Exchange? All issued and outstanding common shares are listed in the philippiie Stock Exchange. Indicate by check mark whether the regrsnanr:
a.
has filed all reporrs required to be filed by section l l ofthe securities Regulation code(SRC) and SRC Rule I l(a)-l thereunder and Sections 26 and 14l ofthe corporation-code otttre
Riritipplnes,
during the preceding 12 months (or for such shorter period the registrant was requir"a to reports)
niJ,r.r,
yes [4
b.
has been subject to such
filing requirements for the past 90 days
Yes [/ ]
Page 2
PERC SEC -l7Q 3d euarter 2013
TABLE OF CONTENTS
PART
A)
T
FINANCIAL INFORMATION
Management Discussion and Analysis ofFinancial Condition and Results Operations
L Financial Condition
-
2. Results ofOperations 3. Financial Condition 4. 5.
B)
-
of
September 30, Z0l3 and September 30, ZOl2 For the quarter ended September 30, 2013 and September 30, 2012 September 30, 2013 and Decembe r 31,2012
-
Discussion of Indicators of the Company's Level of performance Disclosure in view ofthe current global financial crisis.
Results and Plan ofOperations
PART
II
OTHER INFORMATION
SECTION A - FINANCIAL STATEMENTS
l.
Consolidated Statements of Financial Condition As ofSeptember 30, 2013, September 30,2012 and December 31,2012
2. Consolidated Statements of lncome For the quarter ended September 30, 2013 and September 30, 2012 3. Consolidated Statement ofChanges in Equity As of September 30, 2013, September 30, 2012 and December 31.2012
4. Consolidated Statement ofCash flows As of September 30, 2013, September 30, 2012 and December 31.2012
5. Schedule ofAccounts Receivable
6. Notes to Financial
Statements
Page 3
PERC SEC -l7Q 3'd Quarter 2013
PART
I.
FINANCIAL INFORMATION
A.) MANAGEMENT DISCUSSION AND ANALYSIS OF CONSOLIDATED FTNANCIAL CONDITIONS AND RESULTS OF OPERATIONS
1. Consolidated Financiat Condition (September 30,2013 and September 30,2012)
(unauditedl 2013 2012
9/o
chatrse -
7o in Total Assets
ASSETS Cash and cash equivalents
$10,664,702
s30,830,979
-65.4to/o
t0.26%
135,085
|25,293
0.13%
I,695,1l4
I,989,014
800,407
228,O54
7.82Vo -14.78% 250.97yo
Financial assets at fair value through profit and loss (FVPL) Receivables Crude oil inventory Advances, prepaid expenses and other current assets
s,442,32E
Property, plant and equipment-net
Deferrcd oil exploratioD cost Deferred wind project costs
6,133,139
-t t.26yo
5.23o/o
40,960,560
77.63Yo
69.96yo
9,7OO,637
6,458,579
50.20yo
9.33Yo
0.OOYI
0.13%
178,359
-6.73%
0.t60/0
31,417
0.00o/o
0.03%
1.32t.947
86.58%
2.370/0
l7.83Yo
too.00yo
Deferred tax assets-net
166,350
lnvestment properties-net
31,417
Advances and other non-current assets
TOTAL ASSETS
LIABILITIES AND EQUITY 3,365,620
s2,821,533
t9.280/0
3.240/0
248,O33
901,8t 7
-72.50yo
0.24Vo
506,957
259,846
95.t0%
o.490/0
sr,432,982
38,990,488
3t.91%
49.460/0
Income tax payable Loans payable
0.770/o
72,756,a18
r35,402
Accounts payable and accrued expenses Dividends payable
1.63%
Accrued retirement liability
39,113
4t,862
-6.57Vo
Asset retirement obligation
0.040/0
265,296
532,854
-50.210/o
0.26%
Defened tax liabilities
0.0OYo
TOT EQUITY
0.
28.27yo
53.7lo/o
39.48%
Attributable to equity holders ofthe parent Company Inlerest
41,055,070
39,409, t77
4.t8yo
4l
5.299.764
33.62yo
6.81
7.670/o
46.29%
7,081.7
TOTAL EQUITY TOT
t7.83%
Note: Diferences in amounts are due to rounding
Total assets arnounled to $103.995 2012, respectively.
mi ion and
ofl
$gg.257 milrion as of september 30, 2013 and september 30,
cash and cash equivalents consist of cash on hand, cash in banks and money market placements with original maturiries of not more than rhree months. The 65.4 r% ner decrease from uss:b.s: i ,iiir-1. s.p'r"rnu"',. :0, 2012 to US$10'665 million as of september 30, 2013 is mainly "i billings for due to payments made for progress -itu." the construction of the Maibarara Geothermal Power Plant lvcrey; devetopment expensls in rori'rr" Expansion in Gabon; and development ofthe Nabas Wind power eroject 6NWie;.
Page 4
PERC SEC -l7Q 3'd Quarter 2013
Financial assets at fair value through profit and loss (FVPL) amounted to US$o.135 million and US$o.125
million
as of September 30, 2013 and 2012, respectively. The 7.82% net increase in this account is due to the positive changes in the market prices ofthe Company's investments in stocks.
Receivables arise mainly Aom PERC'S share in the proceeds on lifting/sales. The 14.78% decline in this account is mainly due to lower number ofbarrels lifted that remained uncollecieq.
Crude oil inventory pertains to PERC's share in the Etame Marine Permit (Gabon) ending inventory as of the 3rd quarter. This amounted to us$.800 million and us$0.228 million at the end of Seprimber 30, 2013 and 2012, respectively. TIrc 250.9'7o/o increase is due to higher number of barrels left unsold at a highe;;rude oil price per barrel fton 2,002 barrels at US$l13.9 per binels to 7,230 banels at US$l10.7 per"barrels as of September 30,2012 and 2013, respectively. Advances' prepaid expenses and other current assets consist of short-term investments (money market placement with maturities of more than three months but less than one year), advances to contractor, deferred financing costs' VAT credit charges, prepaid insurance, suppries inventory, refundable deposits, and other prepayments. This account amounted to US$5.442 million and US$6.133 miliion as of Septemier 36,20t: and 2012, respectively. The ll -260/o net decline is the result of recoupment of downpaymenti made to contracrors and additions to short-term investments, advances to contractors,
vit credits and otlei p.epayments.
plant and equipment (ppE) is up by 77.63% fiom US$40.961 llgpjrtv' US$72.757 million
as
as
of september 30,20t2
to
of Sept€mber 30,2013 in line with the construction of MCpp und Fluid Collection and
Reinjection System (FCRS) and costs ofcompleted wells in Gabon.
Deferred oil exploration cost amounted to uS$9.701 million and US$6.45 million as of September 30,2013 and 2012, respectively. The 50.20o/o increase is due to continuous exploration and development activi;ies in Gabon, West Africa. Deferred wind project costs refers to the developm€nt costs incurred for the Nabas Wind power project (NwPP). Deferred tax assets (DTA) occurs due to timing differences in recognizing temporary deductible expenses and temporary taxable revenues such as accrued profit share, accreti;n expenses, accrued retireme;t liability, provision for probable losses and change in crude oil inventory. Due to tire oi.cur."a upparently, t6e Company has a US$0.166 million DTA as ofSeptember 30,2011 andUS$0.178 "hang"" million in sep"tembe r lo.iotz. Investment properties remained unchanged as of Septemb er 30,2013. Advances 8nd oth€r non-current assets consists of the non-cunent portion of advance rent, advances to contractors, resficted cash and defened financing costs. The 86.58% net addition in 2013 is rnainly due to advance rental payment made in the lease agreement. on April 23, z0rz, the company ente.eo intJ a rano acrgqent LA or the Agreement) with the National Power corporation (NpC) and the porver lease !t Sector Assets and Liabilities Management corporation (psALM) over the MGpp's steam-fierd lot in sto. Tomas, Batangas' Under the LLA, the Company will lease the steam-field lot for a period of25 years, extendable for another 25 years upon mutual agreement ofth€ parties.
Accounts payabte and accrued expenses amounted to us$ 3.366 milrion and us$2.g22 mirion as of Seprember 30,.2013 errd 2012, respectively. Increase in payable to suppliers and contractor; accrual of interest on loan; and other accruals account for the lg.2go/o change inthis account.
Dividends payable amounted to us$0.248 and US$0.902 mi ion as
of seplember 30, zor3 and 2012, resp.€ctively Balances mainly pertain to unclaimed dividends. The 72.50% decline in this account is mainly attributable to 209lo declaration of dividen ds in 2012, S% 2Ol3.
in
Income lax payable pertains to the 3d outslanding income taxes due within 60 days after the said quarter. Higher income tax payable as of-quarter September 2013 is due to higher computed taxable income. As of september 30, 2013 this amounred ro us$0.507 mi[ion compared to uS$0.260 miilion in 2012
Page 5
PERC SEC -l7Q 3d Quarter 2013
Loans payable pertains to the US$54.7 million loan facility availed by MGI Aom RCBC and BpI to finance the construction of 20 MW MGPP and the $3.5 million loan availed oy Rfnc ro finance its share in the Gabon Etame Expansion. As of september 30 ,2013 and 2012, total loan foi amounted ro $5 1.432 million and $38.990 million, respectively. The 3l.9lo/o increase in this account is due to additional drawdowns tnaoe ror Mci anc availment of$3.5 million loan by pERC in July 2013.
Accrued retirement liability amounted to US$0.039 million and us$0.042 million as of september 30,2013 and 2012, respecrively. The 6 57o/o decline pertains to additionar funding/payment ofretiremeni fund. Asse-tR€tirement obligation amounted to us$0.265 million and us$0.533 million as of September 30,2013 and 2012, respectively. The 50.21% reduction resulted from the change in estimated abandonment costs fiom Sl'54 million in 201I to $0.87 million in 2012 (PERc's share to the t'otal accrued retirement obligation ofthe The estimate was provided by a third party expert, as engaged by the consortium
"-".T:{iy): oilfields in Gabon, West Africa.
op"rruto, or tn"
Equity attributabl€ to equity hotders ofthe Parent company amounted to us$ 41.055 million or us$0.t50 book value per share and US$39.409 million or book vaiue ier share ofUS$0.r44 as ofSeptember 30, zol: -a September 30, 2012, respectively.
Non-controlling interest pertains to the 25yo share of Trans-Asia oil and Energy Development corporation (Trans-Asia) and the l0% share of phitippine Nationar oir corporation - Renewabre corporation (pNoc-Rc) tn Maibarara Geothermal, Inc (MGr) and 20vo share of EEI power corporation in petrowind Energy Inc(PWEI).
Page 6
PERC SEC -l7Q 3d Quarter 2013
2.
Consolidated Results of Operations (For th€ quart€r ending September 30, 2013 and September 30,
2012\ For the 3rd Quarter Endinq o/o
COST OF SALES Oil production operating expenses
30-Sepl3
3o-sep'12
r,682,05t
|,425,781
2,283,971 |,789,409
chtnge
^
t:11
17.97%
47.850/0
27.640/0
64.97%
GENERAL AND ADMINISTRATIVE
OTHER INCOME (CHARGES) lnterest income Net unrealized foreigr exchange gain Net unrealized gain (loss) on fair value changes on financial assets at FVPL Accretion expense
40,904
(27,960)
-6't .24%
l.160/o
-t40.38%
-0.80%
(4,108)
(3,888)
s.66%
-0.12%
(r6,330)
-43.60Vo
-0.26%
441,489
IIET INCOME (LOSS) ATTRIBUTABLE TO; Equity Holders ofthe parent ComDanv
69,238
(e,2 r 0)
(2301 INCOME BEFORE INCOME TAX
t24,860
$529,251
178,447 -t00.130/o 13t,'t7
|
-39.67%
-0.0t% 12.560/0
-9s4%
EARNINGS PER SHARE(EPS) FOR NET INCOME ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT COMPANY. BASIC AND DILUTED
Note: Dfurences in amounls are due to rounding
of.
The Company generated consolidated net income attributabl€ to equity holders of the parent Company amouting to us$0.529 million or uS$0.0019 EPS and US$0.585 million or US$0.0021 Eps for the 3rd quarter ended September 30, 2013 and 2012, respectively.
Parent Company stand alone statement of income recorded a net income of $0.579 million and s0.7g2 million for the 3rd quarter ended September 30, 20 I 3 and September 30, 20 12, respectively. The Company's oil revenues is up by 13.27o/o from US$3.104 in 3d quarter of 2012 to US$3.316 million for the 3rd quarter September 30, 2013. The escalation is relative to highei cost recovery rate (Gabon oil project) of P_ERC resulting to to higher share in production barrels.For the 3-'d quarter 2013, ihe compar,y strarediz,ote bbls in the cabon 1,555,909 (100%) production barrels while in the same quarter of20l2, tire company shared 28,076 bbls in the Gabon 1,746,365 ( l00o/o) production barrels.
Page 7
PERC SEC -l7Q 3'" Quarter 2013
Oil Production operating expens€s increased by 17.97% from US$1.426 million to US$1.682 million in the 3rd quarter 2013 and 2012, respectively due to well work-overs ofwell EAVOM 2H and ETBSM lH. Depletion amounted to US$0.602 million and US$0.364 million for 3d quarter 2013 nd 2012, respectively. The 65.53% increase is due to higher depletion rate fiom US$ 7.94 per ban.el to US$12.4 per barrel. Higher depletion rate is relative to the 2013 osts of completed wells in Gabon (EAVOM 3H Development well, EEBoM- 5H Development wells and EovKM - l exploration well) which is now subject to depletion. Generaf and administrative expenses increased by 3.79o/o primarily due to the expenses incurred for the geothermal and wind projects.
Other income (charges) amounted to (US$0.001) million and US$o.178 million for the
3'd ouarter 2013 and
2012, respectively. The 100.13% net decline is due to the following net effects:
o 67.24% decrease in interest income is due to the Company's decline in reinvestment fund due to Gabon Etame expansion; progress payrnents for the MGpp construction; pa),ments for other expenditures; and lower interest rates i.e. for MGI average interest rales in 2012 ranges from 4.502 as compared to 2013 rates of 2.89o,/o to 3.4o/o
o
140.38o/o net decline
:
in net realized gain on forex
changes from US$0.069 million gain in 2012 to US$0.028 million loss in 2013, this resulted because, in quarter 2012, peso strengrhenJd from June 30,
2012 closing of P42.12:lUS$ to P41.70:lus$ in september 30,2012 while in quarter 2013, peso weakened from June 30,2013 closing ofp43.2O:lUS$ to p43.54:lUS$ in Seprembei30, 2013; o 5.660/o net increase in net unrealized loss in changes in market values of investments in stocks traded in the PSE due to decline in market values ofinvestments;
o 43.60% decline in accretion expense resulting from the change in abandonment cost estimate above in the asset retirement obligation; and o 96.850lo decrease in miscellaneous income mainly refers to the proceeds car in 2012; none in 2013.
as discussed
from sale of Company
assigned
Provision for income tax amounted to US$0.257 million and US$0.194 million for the 3rd quarter 2013 and 2012, respectively. The 32.67yo net inqease is due higher taxable income as of September 30, 2013.
Non-controlling interest pertains to the 25% share of Trans-Asia and the l0% share of pNOC-RC in MGI and 20% share of EEI Power Corporation in pWEL
Page 8
PERC SEC -l7Q 3'" euarter 2013
3. Financial Condition (September 30, 2013 and December 31. 2012)
U||audited
Audited
3l-Dec-12
7o Change
9/o
in Total
Assets
ASSETS Cash and cash equivalents
$10.664.702 $2t,622,222
Financial assets at fair value through profit and loss (FVPL) Receivables
-5O.68Yo
to.26yo
o.t3vo
r35,085
142,827
-5.420/0
1,695,1l4
t,982,02't
-14.480/0
1.630/o
800,407
4t4,7 64
92.980/o
0.77o/o
5,442,328
6,490,701
-16.150/.
5.230/0 69.960/0
Crud€ oil inventory Advances, prepaid expenses and other currett ass€ts
Property and €quipment-net
72,756,818
41.400/0
Deferred oil exploration cost
5l ,455,856
9,7OO,637
6,643,203
46.02Vo
9.33o/o
0.00v"
o.t3yo
Deferred wind project costs
135,402
Dgferred tax assets-net Investment properties-net
t66,350
146,806
13.3lyo
0.t6yo
31,417
3r,417
O.00o/o
o.o3yo
-2.24o/o
2.37Yo
t3.7lo/o
100.00%
Advances and other non-cruTent assets
TOTAL ASSETS
LIABILITIES AND EQUITY Accounts payable and accrued expenses Dividends payable
3,365,620 248,033
hcome tax payable Loans payable
s4,742,267 260,O98
-29.O3yo
3.24Yo
-4.640/o
0.240/0
506,957
75,015
5.8lYo
o.490/0
5r,432,982
38,943,444
32.07Vo
49.46yo
39,1r3
78,755
-50.340A
0.o40/o
265,296
237,668
11.620/0
o.26vo
o.oovo
0.000/0
-0.6lYo
39.480/0
Accrued retirement liability Asset retirement obligation Deferred tax liabilities
AL LIABILITIES EQUITY
57
44,337 .247
Attributable to equity holders ofthe parent Company
4t,055,070 7,O41,141
TOTAL EQUITY
41,308,139 5,807,319 7.115.51
TOTAL LIABILITIES AND
t,452.765
Total assets amounted to us$ 103.995 million and $91.453 million 2012, respectively.
as
21.94o/o
2.1 13.7lo/o
6.81 100.
of september 30, 2013 and December 31,
cash and cash equivalents consist ofcash on hand, cash in banks and money market placements with original maturities of not more than three months. The 50.68% net decline frorn $zi.ozz mittlon as of Decembe; 31, 2012. to $ 10 665 million as of september 30, 2013 is mainry due to the progress payments made for the MGpp; development expenses in for the Etame Expansion in Gabon and and developmeni oithe Nabas wind project.
Financial assets at fair value through prolit and toss (FVPL) amounted to $0.135 million and $0.143 million as of September 30, 2013 and Decemb er 31,2012, respectively. The 5-42o/o neL decline in this account is due to lower market values ofthe Company's investments in siocks.
Receivables arise mainly from proceeds from lifting/sales. The l4.48yo decrease in this account is due to lower amount of uncollected liftings as of September 30, 2b I3 compared to Decem ber 3l,2012.
Page 9
PERC SEC -l7Q 3'Quarter 2013
Crude oil inventory pertains to PERC's share in the Gabon Etame ending inventory. This amounted to US$.g00 million and us$0.415 million at the end september 30, 2013 and Dicenber il, zolz, respecrively. The l,et.irrcrease is due to higher number ofbarrels left unsold fiom 3,783banels as of December 7,230 ban€ls as ofSeptember 30, 2013. 92.9^8o/o
3l,i0l2
to
Advances, prepaid
expenses and other current assets consist of short-term investments (money market placement with maturities of more than three months but less than one year), adyances to condactor; defened
financing costs,
vAT credit charges,
prepaid insurance, suppries inventory, refundabre deposits, and other
prepayments' This account amounted to uS$5.442 million and US$6.491 miiion as of Septemter 36,2013 and December 31, 2012, respectively. The 16.15% net decline is the result ofrecoupment of dovrnpayments made to contractors and additions to short-term investments, advances to contractors, vai credits and otheiprepayments.
plant and equipment (PPE) is up by 41.40% from us$5r.456 as of December l1o-p_1.ty' 3r,2or2 ro Us'$72.757 million as of September 30, 2013 i; line with the construction of Mcpp and Fluid collection and Reinjection System (FCRS) and costs ofcompleted wells in Gabon. Deferred oil exploration cost amounted to s9.701 million and $6.643 million as of September 30, 2013 and December 3l' 2012, respectively. The 46.020/0 net increase was due to activities for the Etame Expansion continuous exploration and development activities in Gabon West Africa. Deferred wind project costs refers to the deveropments costs incurred for the wind Energy project. Deferred tax assets/ (liabitities) (DTA/L) occurs due to timing differences in recognizing temporary deductible
expenses and temporary taxable revenues such as accrued profit share, accretion expenses, accrued retirement liability' provision for probable losses and change in crude oil inventory. The Company has US$0.14? million
DTA in December 3l' 2012 and aUS$0.166 million DTA in Septembei 30, 2013. accounted for movements ofthe temporary deductible and taxable differences.
ihe slight change is mainly
Investment properties remained unchanged as ofSeptember 30, 2013.
Advances and other non-current assets consists of the non-current portion of advance rent, advances to contractors, reshicted cash and defered financing costs amounting lo US$2.467 million and US$2.523 mittion
as
ofS€ptember 30, 2013 and December 31, 2012.
Accounts payable and accrued expenses consist of payable to suppliers and contractor, accruals of certain general-and administrative expenses and interest accrued iertaining to ioans. The 29.03yo decline in this accormt was mainly due to settlement ofprogress billings for the construction of MGpp. Dividends payable pertaining to unclaimed dividends amounted to us$0.24g million and US$0.260 million of September 30, 2013 and December 31, 2012, respectively.
as
Income tax_ payable inoeased by 575.81%o ftom $0.075 million to us$0.507 million as of Decem ber 31,2012 and september 30, 2013, respectively due to additional provision for income taxes current for the 3d Quarter 2013.
l'oans payable pertains to the US$54.7 million loan facility availed by Mcl tiom RCBC and Bpl to finance the construction of20 Mw MCPP and the $3.5 million loan availed uy renc to finance its share in the Gabon Etarne Expansion. As of September 30,2013 and Decemder 31,20'12, total loan
for amounted to
$51.432 miflion and-$38.943 rnillion, respectively. The 32.o7yo increase in this account is due to additional drawdowns made for MGI and availment of $3.5 million loan by pERC in July 2013
Accrued retirement liabirity decreased by 50.34% due to addirionar funding ofthe rctirement fund. Asset Retirement obligation amounted to us$0.265 million and us$0.238 million as of september 30,2013 and December 31, 2012, respectively. The | | .62% increase in this account resulted iiom the amortization ofthe net present value ofthe additional abandonment costs estimale for the Avouma and Ebouri oilfierd.
Page I 0
PERC SEC -l7Q
3ro
Quarrer 2013
Equiry attributabl€ to equity holders of the Parent company amounted to US$41 .055 rnillion or book vatue per share of US$0.150 as of September 30, 2013 and US$41.308 million or US$o.151 book value per share as
ofDecember3l,2012.
Non-controlling interest pertains to the 25o/o share of Trans-Asia Oil and Energy Development Corporatron -iorporati;n (Trans-Asia), l0% share of Philippine National oil corporation Renewable (pNoc:Rc) in Maibarara Geothermal, Inc (MGl) and 20% share of EEI power corporation in petrowind enerry Inc.(pwEr).
4. consolidated Results of operations (For the nine months ending september 30, 2013 September 30, 2012)
and
For the nine months Endins 30-Sep-13
OIL R,EVENUES
3o-sep-t2
Yo
change
5.320/o tot .21%
$9,300,765
COST OF SALES Oil production operating expenses
4,t I t,571
3,929,130 I,101.464 0
4.640/o
42.48o/o
30.42o/o
14.84o/o
l0
57 .32yo
OTHER INCOME (CHARGES) Interest income
Net uffealized foreign exchange gain Net unrealized gain (loss) on fair value changes on financial assets at FVPL Accretion exDense
188,851
37t,140
(284,603)
344,470
1,515
(27,629)
12,605
(58,561)
-49.12%
1.95%
-182.62Vo
-2.94yo
-87 .98yo -52.82o/o
0-02o/o -0.29o/o 0-05o/o
-25.23yo
ll INCOME BEFORE INCOME TAX
1,785,580
-l.zl%o 2,918,485 795
NET INCOMf,
-38.82%
18.45o/o
20
122.616
9.920/o
-61.1lyo
8.53yo
NET INCOME (LOSS) ATTRIBUTABLE TO; Equity Holders ofthe parent Noncontrol lins interest
Company
$1,342,255 $2,268,447 -40.83%
NET INCOME
122,6t6
-61
.t
t3.87o/o
t%
8.53%
EARNINGS PER SHARtr(EPS) FOR NET INCOME ATTRIBUTABLE TO EQUITY HOLDERS OF TIIE PARENT COMPANY. BASTCAND DILUTED
Note: Diferences in amounts are due to round.ing olf,
The Company generated consolidated net. income aftributable to equity holders
of
the parent company
amounting to us$ 1.342 million or US$0.0049 EPS and US$2.268 million or US$0.0083 Eps for rhe 3rd qulrter (nine month) ending September 3 0, 20 I 3 and 20 I 2, respectivelv.
Page I I
PERC SEC
-I
7Q 3d Quarter 2013
Par€nt Company stand alone statement of income recorded a net income of$2.018 million and $2.g23 million of September 30, 2013 and September 30, 2012, respectively.
as
Crude oil revenue is tp by 5.32Yo due to higher average cost recovery rate of l.glo as of september 2013 compared to 1.55% as of september 2012. This is despite the 16.55% dicline in total production Lanels (4.587 million bbls as of september 30, 2013 compared to only 5.497 mi ion bbls as of September 30, 2012). The decline in production is due to temporary shutdown of Ebouri 3H and 4H wells and the intermittent shut in of wells while drilling.
Oil Production operating expenses increased by 4.640/o from US$3.929 million to US$4.1l2 million fbr the nine months ending 2012 and 2013, respectively due to well work-overs of well EAVoM 2H and ETBSM lH. Depletion increase of 30.4270 is due to higher depletion rate of $ 12.40/bbls as of September 2013 compared to $7.94lbbls as of september 2012. This is due to the costs of completed wells ( EAvoM 3u oevelopmJnr wett, EEBOM- 5H Development wells and EOVKM -l exploration weli) now subject to depletion. Generaf and administrative expenses increased geothermal and wind projects.
by
15.62% primarily due to the expenses incurred for the
N€tother incom€ (charges) amounted to (us$o.1 l7) million and US$0.676 million for the nine months ending 2013 and 2012, respectively. The I l7 .29o/o net decline is due to the following net effects:
' o
49.l2yo down in interest income due to the Company's decline in reinvestment fund due to settlement of obligations from EMP expansion; progress payments for the MGpp construction; payments for other expenditures; and lower interest rates i.e. for MGI average interest rates in zol} ranges from 4.5% as compared to 2013 rates of Z.g9o/o to 3.4yo: t8l,!/% negative change in net realized gain on forex changes fiom US$0.344 million gain 2olz to us$0.285 million loss in 2013, this resurted because, in quarter 2012, peso stre-ngthened frorn December 3l 201 I closing of P43.84: I US$ to P4 t.70: I US$ in September 3b, zotz iiile in qu..t". ' 2013, peso weakened from December 31,2012 closing ofp4l.05:lus$ to p43:54:lus$ in sept'ember
it
30.2013:
o
87.9870 decline in Net unrealized gain (loss) on fair value changes on financial assets at
FVpL
due to
lower market value of investments in stocks for September 2i | 3 ( reckoned from December 3 I , 20 I 2 market prices ) compared to the voratile market vaiue average movements as of september 20r 2 ( reckoned from December 201 I markel prices);
o 52.82Vo decline in accretion expense resulting frorn the cbange in abandonment cost estimate
t
above in the asset retirement obligation; and 25.23Vo decrease in miscellaneous income mainly refers to the proceeds car in 2012; none in 2013.
as discussed
from sale of Company
assigned
Provision for income tax amounted to us$0.960 million and us$0.796 million for the nine monrhs ending 2013 and20l2, tespectively. The 20.6402 net increase is due higher taxable income as ofSeptemf". :o,zoil. Non-controlling interest pertains to the 25% share ofTrans-Asia and the l0% share ofpNoc-RC in Maibarara Geothermal, Inc (MGI) and 20% share ofEEl power Corporation in petrowind Energy Inc. (PWEI). Total Net income amounted to $0.825 as of september 30, ?013 refer to Note 16 segment information on the Group's net income per business operation. There are no significant elements of income or loss that did not aris€ from the Company,s operations.
The Company is expected to have additional expenditures in oil exploration in Gabon, West Africa. '' The company's revenue from the Etame and Avouma and Ebouri fields wilr finance said capital .*p"noit*o. Liquidity may come from internal or external sources. Revenues from oil production proiio" n ro. for operating expense. "*"gr,
i-
The Philippines is
still
affected
by tbe economic crises resulting in fluctuating foreign exchange rates and increased stock market uncertainties. Uncertainties remain as to wh;ther the country williontinue ti be affectea Page 12
PERC SEC - l7Q 3d euarrer 2013
by regional hends in the coming months. The financial statements do not include any adjustments lhat mighr result from these uncertainties. Related effects will be reported in the financial statements, as they become
known and estimable
.
KEY PERFORMANCE INDICATORS The following liquidity and profitabiliry ratios indicate acceptable levels of financial condition and performance of the company:
30-Sep-13
3l-Dec-12
4.55: I
6.04: I
Debt-to-equity ratio
l.l6:l
0.94:l
Operating profit margin Asset hrmover
Formula Total Curent Assets/Total Current
Current ratio
Asset-to-equity ratio
30-Sep-12 9.87: I Liabilities
2.16:l
I.94: I
43.360/0
44.55o/o
0.97:l LiabilitievTotal Stockholders' Equiw Total Assets/ Total Stockholders' Equity 'l .97:l 45.910/o Operating profiVRevenue (Oil Revenue)
9.3lo/o
l4.l0o/o
| | .30o/a Total Revenue/Total Assets
Therewasadeclineinthegroup'scurrentratioasofseptember30,20r3ascomparedtoseptember30,2012 due to derline in cunent assets (particularly cash and ca;h equivalents) and increise of cunent liabilities from progress billings from contractors for the MGPP. Although there was a decline, the group still has a relatively high current ratio as an indication that the group is liquid and has the ability to pay crlrient obligations when they become due.
ll"T- yr.un increase in the group's d€bt-to-equity ratio as of september 30, 2013 as compared to september 30' 2012 due to the additional loan drawdowns of long-term loans availed for additional funding ofMdpp and loan availed by PERC (Parent Companyr. The asset-to-equity ratio indicates the group's leverage. This increased because of the additions to asse6 mainly from MGPP; share in Gabon Etame Expansion; aid development expenses for the Nabas wind project. There was a slight deline in the group's operating profit margin as ofSeptember 30,2013 mainly because ofthe increase in operating expenses.
There was a decline in tlle asset tumover mainly because of the on-going MGpp construction (in which the the commercial operation, on the last quaner of20l3) and on-going development ofthe Nabas Wind -expects Project (which the Group expects the commercial operation on last montl ofZ-Ot+). gr-oup
4,
Discussion ofindicators ofthe Company's level ofperformance.
Productivity Program: The Company's main source of revenue is from its share in oil production in the Etame field, Gabon, West a{pa lne.o.geT1or of said project (vaalco, Inc.) and the memlers of the consortium have identified some wells to be drilled in order to increase production. vaalco, Inc. has the necessary skills to manage the resources and complete the work on time and within the budset. Receivable Management Most ofthe Company's receivables reported in the Balance She€t are mainly receivables from sale of crude oil (Etame, west Africa). These are being recorded once sale of crude is made. payment will be received 30 days after the sale.
tll
qasl.one hundred thirty thre€ (133) months since oil production rnception, there was no event that the lalled to remit the proceeds ofthe sale. However, the Company is willing to look for another buyer should th€re be some failure that may happen in the ftture.
f3r Duyer
Page
I3
PERC SEC -l7Q 3'Quarter 2013
Liquidity Mrnagement Management of liquidity requires a flow and stock perspective. Conslraint such as political environment, taxation, for€ign exchange, interesl rates and olher environmental factors can impose significant restrictions on firms in management oftheir financial liquidity.
The Company considers the above factors and paid special attention to ils cash flow management. The Company identifies all its cash requirements for a certain period and invest unrestricted funds to money market placements to maximize interest eamings. Inventory Management The only inventory is the crude oil produced in Gabon. The buyer lifts certain volume and pays the same in 30 days. The operator sees to it that crude oil inventory does not reach 800,000 banels at any one time to avoid overflow and to generate revenues to cover production costs.
Cost Reduction Efforts In order to reduce costs, the group employs one hundred six employees with multi-task assignments.
Company
No. of Employees
PetroEner$/ Resources Corporation PetroGreen Energi Corporation Maibarara Geothermal lnc., PetroWind Energy lnc. Rate ofReturn
20 14
65 7
Total
r06
The Company has no existing dividend policy. However, the Company declares dividends accordance with the Corporation Code of the Philippines.
Tbe Company declared cash/stock dividends to wit: Date ofDeclaration
Ianuxy
07
Dividends per Share Cash
,2004
Stock
20%
August 17,2004
20%
June 08, 2005
20o/o
June 08, 2005
Record Date
Payment Date
January I5. 2004 Ausust 3 l. 2004
Fqbruary 16, 2004 September 24. 2004
June 23,2005 25% August 12, 2005 June 30,2006
July 18, 2005 September 06, 2005 July 26,2006
June 8, 2006 June 8, 2006
20%
January 29,2007
20%
February
Iuly 25,2007
20o/o
February 06, 2008 July 24, 2008 Itrly 22, 2009 February 23, 2010 October 2t, 20 t0
20o/o
20o/o
August 10, 2007 Februarv 22. 2008 Ausust I 1, 2008 August 05, 2009
20%
March 15, 2010
April 05.2010
l0o/o
November 08. 2010 June 16, 201 I
December 2. 2010
t0% l0o/o
September 20, 201 I
l0o/o
May 18,2012
t0%
SeDtember 21. 2012
May 17,2Qll May 17,2011
&pfl26,2012 {pfl26,2012 Iuly 22,2Ql3
30o/o
30%
5o/o
August 15, 2006
September 8.2006 March 16, 2007
2l,2007
September 05,2007 17, 2008
March
Aueust 29.2008 August 3
l, 2009
July 13,201I october 14. 201 lune 14,2012
I
October 17. 2012 Ausust 20, 2013
Iuly 25,2013
5. Financial Disclosures in view ofthe current global financial condition: Assess the financial risks exposures
ofthe Company and its subsidiaries particularly on currency, interest ffedit, ald market and liquidity risks. If any change thereof would materially affect the dnancial condition and results ofoperation ofthe_ Company, provide a discussion in the report on quantitative impact or such risks and include
a description
ofenhancement in the company's risk management poricies to address the same:
Page 14
PERC SEC -l7Q 3'd Quarter2013
The Group manages and maintains its own ponfolio of financial instruments in order to fund its own oDeratrons and capital expenditures. Inherent in using these financial instruments are the following risks on iiquidity, market and credit.
Finqncial Risks The main financial risks arising from the Croup's financial instruments are liquidity risk, market risk and credil
risk.
q-
Liquidity Risk Liquidity risk is the risk that the Croup is unable to meet its financial obligations when due. The Group monitors its cash flow position and overall liquidity position in assessing its exposure to liquidity risk. The Group maintains a level of cash and cash equivalents deemed sufficient to finance its operations and to mitigate the effects of fluctuation in cash flows. To cover its short-term and long-term funding requirements, the Group intends to use internally generated funds as well as to obtain loan trom fi nancial institutions. The tables below summarize the maturity profile ofthe Group's financial assets and financial liabilities as of September 30, 2013 and December 31,2012 based on contractual undiscounted Davments:
On demard
Financial assets at FVPL Loans and rec€ivables: Cash on hand and in banks Short-term investments Accounts receivable: Coosortium operatoa Others Interest receivable
t oans payable Accounts payable Accrued expenses Accrued int€rest payable Dividends payable Olhers: Due to NRDC
Net finalcial assets (liabilities)
[,€ss ihan 6 months
6 months but less than
More than 12 months
$135,085
$135,085
782,97 5
9,88t,727
782,975 10,582,761
701,034
|,679,462 6,670
|,679,462 6,670
8,981
8,981
s5t,432,982
I,l8l,909 230,t43 1,837,843
248,033
-
$5t,432,982 I,l8 t,909 230,143 I,837,843 248,033
52,t30
$837,36r
$8,043,884
Page
15
$701.034 (95r.369,857, (S4l,j9j,S7B)
PERC SEC -l7Q 3* Quarter 20 t3
3l -Dec- 12 L€ss 6
Financial assets at FVPL l,oans and receivables: Cash on hand and banks Short-term investments Accounts rec€ivable: Consortium operator Others lnterest receivable
in
loans payable Acc4unts payable Acqued expenses Accrued interest payable Dividends payable Others: Due ro
NI{DC
Net financial assets (liabilities)
than
6 months but less than
More than
months
On demand
l2 months
Total
$l42,827
$r42,82't
|,020,234 20,60 t,988
|,020,234 21,4t6,129
8t4,741
I,956,341 I,969
1,956,341
23,1t1
71111
1,969
$38,943,444
-
3,193,1r l 471,281 683,'7
62
260,098
$38,943,444 3,
t93,r | | 471,287 683,762 260,098
55 ?qt
($1,0 t5, | 55)
$
19,918.226
$814,741 ($38,880,319)
($19,162,507)
Tlte 20 MW MGPP is expected to start commercial operations by late 2013. proceeds fiom sale electricity will then be used to seftle the Group,s loans payable.
of
Market Risk Market risk is the risk of loss on future eamings, on fair values or on future cash flows that may result from changes in market prices. The value of a financial instrument may change as a result of changes in equity prices, foreign cunency exchanges rates, interest rates and other market chanses.
Equitv Price Risk The Group closely monitors the prices of its securities on a daily basis, as well as macroeconomic and entity-specific factors which could directly or indirectly affect the prices ofthese instruments. In case of an expected decline in its portfolio of equity securities, the Group readily disposes or trades the securities for replacement with more viable and less risky investments. Such investment securities are subject to price risk due to changes in market values of instruments arising either from factors specific to individual instruments or their issuers, or factors affecting all instruments traded in the market. The analysis below is performed for reasonabry possibre movements in the psE index (psEi) with alr other variables held constant, showing the impact on income before tax (due to changes in faii value of equity securities and golf shares whose fair values are recorded in the consolidited statements of income). The Group used the daily average ofmovements in pSEi price indices, prus adjusted betas for equity securilies.
lmpact on income before tax % Increase Equity securities Golf cruo vou club shares
t7%
snares
19%
Page 16
$20,085
3,397
Decrease
($20.085) (3,3g7)
PERC SEC -l7Q 3K Quarter 2013
3l-Dec-12
Equity
Impact on income before tax Increase
securities
Golfclub
t7o/o
shares
$r0,t6T
19%
3,464
Decrease
($r0J6D ' (3,464i
There is no other impact on the Group's equity other than those already affecting net income. Foreign Exchanee Risk Exposure to currency risk arises from general and administrative expenses, assets and liabilities in currencies other than the Group's functional currency which is very minimal since the Group's oil revenues and costs and sxpenses are denominated in us Dollar. currency risk is monitored and analysed systematically and is managed by the Group. The analysis below d€monstrates the sensitivity to a reasonably possible change in rhe philippine peso exchange rate which is the only source ofthe Group's foreign ixchange risk, with all othei'variables held- constant, showing the impact. on income befoie tax lJue to cha:nges in fair varue of currency sensitive to financial assets and riabilities). The croup used the year-average forecasr from the Business Monitor lnternational in the analysis.
on income before tax $54,616
+3 -3lo/o
-3.31o/o
(54,616)
3l-Dec-2012 Increase/decrease in
rate
on income before tax
+2.56%
r,617 (81,617)
$8
-2.56Yo
There is no other impact on the Group's equity other than those already affecting net income. lnterest Rate Risk The Group's exposure to market risk for changes in interest rates relates primarily,o the Group,s short_ term investnents amounting to us$10.583 miltion and $2r.42 milion for seitember 30, i0t3 and De,cember 31,2012, respectively. Interest rate of loans payable is fixed for the first nve tsiyean anJ will be repriced thereafter.
The table below demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held constant, ofthe croup.'s.net income. ihe Group usid the forecasted one-year Treasury Bill rate in performing the analysis below.
Increase/decrease in interest rate
Impact on income before tax
+51
$21
-51
(2r,689)
|,689
3l-Dec-2012 Increase/decrease in interest rate
Impacl on income before tax
+51
$109,606 (109,606)
-51
There is no other impact on the Group's equity other than those already affecting net income.
Page 17
PERC SEC
-l7e
3d euarter 2013
Credit Risk There are significant concentrations of credit risk within the Group since most of its financial assets are with consortium operalor. although credit risk is immaterial. The table below shows the summary of maximum credit risk exposure on financial instruments as September 30, 201 3 and December
3
l, 2012: 3I
Financial assets at FVPL: Marketable equity securities Golf club shares
$l18,778
Loans and receivables: Short-term investments Cash in bank Accounts receivable:
Consortium operator - net Others lnterest receivable Restricted cash
s
-Dec-
of
l2
l2s,53l
16,307
l7 ,296
10,582,761 778,t 52
2t,416,729 I,016,093
|,679,462 6,670
l,956,341
I OKq )'t 1t'7 t)
8,981
I
I The Group has a well-defined oedit policy and established credit procedures. In addirion, receivable balances are being monitored on a regular basis to ensure timely ixecution of necessary intervention efforts. The Group determines the credit quality by class for loan-related consolidated statements of financial position lines based on tbe following; cash in banks and short-term investmen s - based on the nature ofthe counterparties and the reputation
ofthe financial insritution.
Receivables ' based on the payment behaviour of the counterparty. High grade pertains to receivables from consortium operator and interest receivable from short-ierm inveiments and standard grade pertains to other receivables. Both are neither past due nor impaired. The tables below shows the credit quality by class ofasset for loan-related consolidated statements financial position lines, based on the Group's credit rating system as of September 30, 2013 and December 31. 2012:
of
Neither past due nor impaired High grade Cash in banks
Standard grade
-
$782,975 to,542,761
Short-tem investments Accounts receivable:
Consortium operator
|,679,462
Others Interest receivable Restricted cash
$782,975 to,582,761
t,74t,o7l
61,609
6,670
$
6,670
8,981
8,981
t25
63,125
t3, I23.974
Page 18
-
$61
$
13.185
PERC SEC -l7Q 3'd Quarter 2013
3l-Dec-|2 Neither past due nor High
grade
Standard
Cash in banks
$1,016,093
Short-lerm investments Accounts receivable:
2t,4t6,729
Consortium operator
Otlers
impaired
Past due
grade lnd . lmDa[eo
totul
-
1,956,341
$
l,016,093
$2t,416,'t29
o),J4O
$2,021,687
|,969
$1,969
Interest receivable
23;t t7
$23,717
Restricted cash
63,125
$63, r25
The tables below show the aging analysis ofthe Group's receivables as ofseptember 30, 2013 and December 31. 2012. 3o-Sep-13
Ito90
Over 90
Total
Accounts receivable
Consortium operator
$1,6'19,462
s61,609
$1,74r,071
6,670
6,670
Others lnterest receivable
8,98
r
8,981
3l
-Dec-12 Over 90
Accounts receivable Consortium operator
$1,956,34r
Others Interest receivable
717
$65,346
s2,021,687
1,969
t,969 23,7
t7
As of September 30, 2013 and Decemb er 31, 2012, the Group has no past due receivables that are not
impaired. Past due and impaired receivable pertains to a long-outstanding receivable from a consortium member which is fully provided with allowance
with-respect to credit risk arising fiom the other financial assets ofthe Group, which compose offinancial assets at FVPL, cash in bank and short-term investments, the Group's exposure to credit risk relates to d€fault ofthe counter party, with a maximum exposure equal to the carrying amounts ofthese instruments.
Page
l9
PERC SEC -l7Q 3'Quarter 2013
B.) OPERATIONS REVIEW AND BUSINESS OUTLOOK A. Oil Exploration Foreisn Operations Gabon. Wes, Aftica The oil production from the three fields (Ebouri, Avouma and Etame) during the third quaner of20l3 ranged from 12,830 19,660 bbls/day, with an average daily production of 16,912 bbls. The fluctuations in the daily production are caused by the following: a) intermittent shut-in of ET4H which requires build-up of pressure prior to production; b) Ebouri platform shutdown due to work-over operations; c) Shutdown of Avouma's submersible pumps due to electrical failure; d) ET-5H and ET-6H wells temporarily shut-in for gaslift compressor maintenance; and e) trip in diesel generators in the Avouma Plalform. New production well EAVOM-3H continues to contribute an average production of-I,700 bbls/day. Three liftings were done durrng the 3rd quart€r and values ranged from 200,000 to 680,000 bbls.
-
The Ebouri wells EEBOM-3H and EEBOM-4H, which contribute -2,000 bbls/day, have been shut-in since July 2012 due to high H2S. These wells have been serviced for temporary abandonment. For safety purposes, the
installation of H2S detection device in the platform had been performed. To be able to utilize theie wells with high H2S, the Ebouri Crude Sweetening Project is cunently in pre-FEED pbase and was originally planned to be completed in August, however, the project team does not have a practical / economical solution to the flow assurance re-starting pipeline after extended shutdown. The pre-FEED phase is being extended by 3 months to investigate, perform lab tesl on potential solutions to resolve the flow assurance lssues. On the Eame and Southeast Elame/North Tchibala (SEENT) Platform projects, both Field Development plans were submitted to the DGH and have been approved for the platforms. The budget will be approved on a year by year basis, (i.e. platform topsides facilities design / fabrication will be approved this year; nixt year wili be the
Transportation & Installation). DGH is holding the approval on drilling program. Meanwhile, ielivery of final engineering deliverables is ongoing, as well as planning for transportation of large equipment. Fabrication for the platform components is on-going and is expected to be completed by end ofihis year. Every aspect of the Etame Expansion Progam is on schedule, and so far, within budget.
After conducting well service in EEBOM-3H and EEBoM-4H, the Ben Rinnes jack-up rig skidded to well
EEBOM-2H on July 4, 2013 for replacement ofthe lower and upper submersible pump units.-Operations in the
Ebowi platform were completed on luly 22,2013, after which the rig moved !o thi location of open-water exploratory well EovKM-l (ovoka prospecr). Drilling of well EovKM-l commenc€d on July 26,)013 and reached a total depth of 2,770 meters on August 30,2013. However there were no significant oil shows during drilling. The Ben Rinnes jack-up rig was handed over to Tullow Oil p'ic on September 9, llcguntered 20-13, and is currently conducting drilling operations in Tullow Oil's Kiassemy block, scheduled for two months. After which, the rig will be mobilized back to the Etame block in early December 2013 to drill the Dimba
exploration well (EDMBM-I) in the shallower portion of the concession area, as well as another work-over on well. EAVOM-2H to replace the lower ESP. PERC and all other partners will participate in the EDMBM-I drill.ins' while Sasol has gon€ non-consent. PERC is therefore plcting up iti allocable share of Sasol's participating interest. This will bring PERc's share to 3.26%, only foi the Drnba prospect.
Philiooine Onerations SC l4-C2
-
ryest Linapacan, Northteest palaurqn
sc_14c2 west Linapacan TCM on August 5,2013, operator RMA west Linapacan pte Ltd. l4C2 partners about the on-going geological and geophysical studies ofthe West Linapacan field. Alongside presenting its newly mapped leads, RMeilso pre."-nt"d itr planned field abandonment for the existing subsea and well systems in west Linapacan, and the drilling program for the wLA-7 and wLA-8 f-urins 1h9
t]tf-ormed the SC
development wells.
on
September 5, 2013, operaior
RMA west Linapacan s€nt to the Sc l4C2 Partners the final Independent Reqort ofthe West Linapacan "A" Reserves made by contractor Gaffirey Cline & Associates, as part of !g9n RMA'S Subphase 2 work commitment in SC 14C2. PERC and the other Filipino partners were all carried'free in the evaluation of the WLA field.
Page 20
PERC SEC -l7Q 3'Quarter 2013
SC 51 - East Yisayas
The commitrnent well, Duhat-2, was finally spudded on Jdy 24,2013. After two days of drilling, a decrease in
drilling rate was encountered at 20lm and brackish water staned flowing from the well. The Operator, Otto Enerry, stabilized the well and diverted the salt water into a sump. However, excessive water caused the sump to overflow, and drilling ahead would pose an environmental and safety hazard. Therefore, Otto finally decided to plug the Duhat-2 well on July 26, 2013. On July 29, 2013, Otto called for an emergency Operating Committee Meeting to seek the JV parhers' approval to plug and abandon (P&A) the well. The partners acknowledged the reason for Otto's decision and approved the ocM's resolution to P&A the well. The rig along with third party personnel and equipmeni were demobilized from the drill site on July 30,2013. The drilling cost incuned as ofend of July reach;d $5.3MM. I'rior to drilling the well, there were 2 years spent for intensive study and the acquisition of seismic data at the cost of $6.0MM. Total cost of Project is approximately $l l.3MM. PetroEnergy is carried free in the entire
project. SC
6A - Octon-Malajon Block, Northwest Palawon
On August 14, 2013, Operator Pitkin Petroleum presented the proposal for 2013 Seismic program to the Dept. of Energy. The survey will cover the northern portion of the service contract area and is programmed to acquire 500 sq. km 3D seismic data and 50 line-km 2D seismic data to tje the Bantac- I well in SC 52 and the Malaion-l well in SC 64.
Following the completion ofa bathymetry survey on September 4,2013, seismic contractor Seabird Exploratron of its M/v voyager Explor€r vessel from Batangas to palawan on September i0, 2013 to cornmence the'500 sq.km 3D seismic survey over the Octon block. Acquisition activities will commence on the first week of October 2013. The seismic survey costs a total ofUS$ 7-00 MM; PERC and the other FiliDino partners are carried free by operator Pitkin Peboleum Plc as part ofPhase I oftheir SC 6A Farm-in Agreement. has slarted mobilization
Summary of Petroleum Properties:
Contract No.
Contract
Participating lnterest 7o
&pry
Location
Production Sharing Contract (PSC) 93 - cabon Service Contracts (SC) - Philipdnes SC 6.4 - Octon Malajon Block
2014
2.5250/0
2024
SC l,lC2 - West Linaoacan SC 47 - Offshore Mindoro
2025
5.00tvo Northwest Palawan t.o34yo Northwest Palawan 2.@V/o Offshore Mindoro
pendins
SC5l - East Msavas
2014
The Company derives its revenues from its Gabon operations. Govemment are complied with.
Gabon Offshore
4.0t2yo East Vsayan Sea
All contractual obligations with the Gabonese
B. Renewable Energy Nabas
llind Power Project
Following the signing of contracts and issuances of notice to proceed in August sept€mber, confiaclors of fol the first phase (36 Mw) of the 50 Mw Nabas Wind Project such as EEI ior the civil works antl lwll Cendaur for the switchyard and transmission line started with their acti;ities. EEI has completed their geotechnical foundalion drilling and soil studies and their conrractor, ATl, is currenly doing the detailed foundation design. These designs will-be checked further by pWEI's ownerls engineer, Wind Prospect Prior to implementation. EEI started with the mobilization oftheir eq;ipment on OctoUer s]zOt:.
PWEI is working with NGCP and cendaur to finalize the design and specifications of the optical Ground Wire (oPGW) which will serve as the communication system betweein the wind farm and NGCp Nabas sub-station.
Page
2l
PERC SEC -l7Q 3d Quarrer 2013
The contracl with Gilmesa for the supply, installation and maintenance of Class lA wind turbine s€nerators (WTG) were finally signed on October 29, 2013. Contract signing with Camesa lagged behind EEI anJ Cendaur because Gamesa proposed to PWEI to change its offer of Class IIA towers to Class IA to withsrand stronger O?hoon gusts. While towers will be more expensive, Oamesa committed nor to increase the cost in the conTracr initialed on 23 August and to maintain the November 2014 complerion date.
On project financing, DBP and PWEI have ironed out the loan's final terms and conditions and has scheduled a loan signing in the first week ofNovember. The process for the purchase of lots for the wind farm and access roads is on going. On 22 October a local town hall assembly presided by Mayor James solanoy was ananged in Nabas, rkla;. The program presented an overview ofthe joint road expansion project by PwEl and LGu to the affected land ownirs ird thi community nearby. The benefits of having a well-conditioned road and a guaranteed compensation for damaged qops and structures were discussed and in conclusion, the expansion project generally gained positive rem-a.ks from the
public.
Maibaruru Geothermsl Power project As-of third quarter 2013, over-all progess for the steamfield Fluid Collection and Reinjection System (FCRS) is 100%.
As part ofthe FCRS commissioning, production well Mai6D was set to full bore condition on July 6, 2013 while Mail lD was utilized as hot reinjection well. Another reinjection well, MBI4RD, was also put on-iine to, cota reinj€ction to prevent overflow ofthe thermal pond. To eniure suflicient and flexible hot reinjection capabilities, well Mai9D was converted to hot Rl well in August. Mail lD meanwhile, was worked-ov-er in Sepiember to
mechanically drill-out the scales inside the wellborc and improve the RIcAp. The second *ork-our, conducted from September 8-18,2013 using DESCO Rig 30.
**
The over-all EPC progress for the Power Plant construction is 98.28% as of end September. Breakdown of comPlelion is as follows: Engineering 96010, Procurement 99olo and Construction at g6yo. Construction of the turbine-generator building is 98% complete while installation ofthe components and equipment is at 96%.
A power plant milestone was achieved last August 9, 2013 when the rarget plate testing was successfully carri€d oul' The two Plates used to test the quality and purity of the steam pass€d the inipection of the iapanese engineers from Fuji. Another milestone, the power plant energization wal successfully completed last Sep|mber 9' 2013. The MGI hansmission line is now connected to and receiving feedbacf power rrom tr,e iieratco distribution system.
The communication tower required by NGCP has been fully-erect€d and construction of the adjoining radio room is also complete. Over-all construction ofthe Switchyard is 100% as ofquarter_end. Plan of Operations for the next 12 months
A. Oil Exploration
5l - East Visqvan Basin Upon DoE's approval of the 6 months extension of Subphase 5, otto Energy will conduct further geological study on the North block of SC5l. By mid-2014, the consortium will enter Subphase 6 with a comriitmenr to drill one (1) exploration well. SC
SC 64
-
Octon
After the completion of SPI which consists of acquisition, processing and inlerpretation of 500km 3D seismic line, the consortium will enter Sp2 with a commitmint to drill one ( ivell. I)
- West Linqoacan op€rator RMA will commence well planning activities and procurement ofdrilling equipment in preparation for the drilling of two (2) development wells by the end of20l4. SC I4C2
Page 22
PERC SEC - l 7Q 3d Quarter 2013
Offshore Mindoro and pqnuv Upon_approval ofthe proposed work program for Subphase 3, the consortium to drill one (l) commitment well. SC 47
-
will entertain potential farminees
Gabon. Il/est Africa The activities for the next l2 months will focus on commissioning the Avouma water knock out facility and completing the drilling of one (t) shallow-water well and possibly two (2) deepwater wells lElili anj Kala alongside work-over operations of existing on-going construction of the Etame and ll":1":El, SEENT Platforms will be continued. After which, drilling ofnew produciion wetls ftom the new platforms will be programmed by end 2014.
*"i.. rr"
B. R€newable Energy Nabqs Wind Power Proiect The activities for the next 12 months will focus on the construction of the windfarm. The windfarm is expect€d to be commissioned by November 2014.
Maibarara Geothermal
P ower
proi ect
Commercial Operations ofthe Maibarara Geothermal Power Plant is scheduled for next quarter 2013. PaTt
II
. OTHER INFORMATIoN
The Company has no other information that needs to be disclosed other than disclosures made under SEC Form
l7-C (ifany).
Page 23
PERC SEC - l7Q 3'd Quarter 2013
SIGNATUR.ES Puntuent to the signedonbebal
Securities Regulstion Code, the r€gistrant has duly caused this report to be th€reunto duly autho z€d.
Registrant
PEIROENERGY RF.SOURCES CORFORATION
Signature ard Title
Sigbature and Title
flooq/ -
YvonnJ S. Yucfengco
Treasurer
Date
Page 24
PERC SEC -l7Q
3t quarter 2Ot:
PETROENERGY RESOIJRCES CORPORATTON AND S UBS IDIARJES CONSOLIDATED STATEMBITS OF FINANCIAL POSITION
Unaudited
ASSETS
CurrctrtAssets Cash and cash equivalents
Financial assets at fair value thmugh pmfit and loss Receivables
(FVpL)
sr0$64,102 $30,830,979 135,085 125,293 800,407
Totalcurrent
Assets
142.827
1695,114 1,989,014
Cmde oil inventory
Advances,,pr-eIaid elpjnses and othercunent
$21,622,2n
assets
S,442J28
1,982,027
228,054 6,133,139
414,7@
6490,201
@
Notrcurrent Asseb Propeny and equiprnent-net
72,756$18
Defer€d oil eploration cost Deferred wind project cost
9,7OO,637
40,960,560
51,455,856
6,458,579
6,&3,203
r66Js0
178,359
1,16,806
31,417
3t,417
31,417
3J6s620
$2,821,533
$4,742,267
t35,402
D€ferred taxassets-net Investment properties-net
Advances and other non-cunent assets
LTABILITIES AND
QUITY
Current LiaHlities Accounts payable and accrued e)9enses Dividends payable Incorrc
248p33
taxpayabl€
2@,@8
506857 2Sg,W 4,120,610 3.983.1%
' ",",l',
Noncurrent LiaUlities loans payable Accrued retbement liability Asset retiryqF-lt obligatiol. Total Noncunent
901,817
51,432982 39,t l3
3E,990,488
38,943,444
4l,862
/6,/))
265,296 532,854 S1.73?J9l 39-565 jM
. Liabiiities .
75.015 s.077.380
..
Attdbutable to equity holders ofthe parent Company Capital stock
6J21533
Additional paid- in capital
25244,131
237,663 1q
6,321,533
?{o 16?
6,321,533
25,244,737
25,244,737
Retained earnings
ppropriated
3,149'555
Unapprcpriated
6,824,804
6,618,263
4r,055,070
39,409,177
A
2,055,5ss 6,907,942
Cunulative trans lation 7,081.141
764
48,r36,81l
I
41,308,139
47 $9
Page 25
l8 765
PERC SEC -l7Q 3'd euarter 2013
PETROEVRGY RES OTJRCES CORPORATION AND OLIDATED STATEMM{TS OF INCOME
S TJBS
IDIARJES
CONS
Unuadited
For the 3rd
Forth€ 3fd
Todate
Quarter OIL REVENI
ES
COST OF SALES Oil production operating e:ipenses
To date
Quarter
$3St5S40
Se,zlSjll
Sf,,rO:,ZOO
l,682,051
4,t I I,57r
1,425,781
S9,TOO,ZOS
3,929,t30
t
60
0l 1,'t89,M
GINIRAL AND ADMINTSTRATM D(PE{S
ES
789,850 2,344,778 760,9'16
2,A1,g44
OTHR INCOME(CTIARGES) lnter€st incorne
40,904
Net unrealized foreign e)chaDge gain (loss) Net unrealized gain (loss) on fairvalue changes on
at
financial assets
l EE,85l (284,603)
124,860
371,140
69238
344,470
(4,t08)
I,515
(3,888)
12,605
(erl0)
(27,629)
(16,330)
(58,561)
(27
FVPL
Accretion epense Miscellaneous incorne
p60)
144
4,938
4,567 178,447
INCOME BEIiORE INCOME TAX
44r 489
|,785,580
PROVISION FOR INCOME TAX
73r,nl
2,9t8485
193,705
NEI INCOME (IOSS) ATTRIBUTATBLDTO:
&uity Holders of the Parent Company
s292Sr
r)42zss
756
16.8I0
interest
EARNINGS PER
S
HARE FOR
585,084 47.
2,268447
I
Ngt INCOME
ATTRIBUTABLE TO EQUTTY HOTDMS OF TIIE PAR0.IT COWANY- BAS tC AND DtLtiTE
$0.00r9
Page 26
$0.0049
$0.0021
$0.0083
PERC SEC -l7Q 3d euarter 2013
PEIRONN,GYRESOI.]RCES CORPORATION AND SI,IBSIDIAR]ES CONSOLIDATU) STATE},IEYTS OF COMPRUilNSIVE TNCOME
NETINCOME
$2,t22,6t6
OIIIM. COMPREIE\ISWEINCOII4E
CoMPRIHTNSM TNCOME (r0SS) ATTRIBUTABLETO:
fruity
holders of the Parent Company
1.705
Page 27
PERC SEC
-l
7Q 3'd euarter 2013
coNsoLtDATE) STATUT{INTS
OF CHANGES tN
QUtTy
Authoized-330,000.000 shares
APPROPRIATED REIAIIIED EARNINGS
ofyear
Balance at beginning
TJNAPPROPRIATTD RETAINTD EARNINGS Balance at beginning ofyear Net InconE ( see note t ) Cash Dividends
2,055555
2,055,555
2,055,555
6,907,942
5,637,881
5,637,88r
l,326,r08 (31s,248)
2,268,447 (
(t,287,676)
r,28&065)
6824,802 6,618.2$
6.n1,942
CUNfl'LA'UVETRANSLATTON ADJ(STMENT Balance at boginning
ofyear
118)72
(56,228)
(56228)
MoverIEnt of urlulative translation
485559 (830,911) HOLDRS
PARINT
39.4@.177
778.372
4
NONCONIROLLING INTERJS T Balance at beginning
ofyear
Net incorF (loss)Note in non-contro
5,807,379
I
(s16,8r0) - stock issuances
3,85t,62t (145,831)
3,85t,627
Q23,117\
t.79r 7
Page 28
PERC SEC - l 7Q 3d Quarter 2013
CONSOIIDAIID STATTMINIS OF C{SHFI,OWS
For
CASH FITOWS FROM OPmATNG ACITVnmS IncorF beforc inconE tax
th.3nd
For the Jnd
$44r,490 $t,785,580
AdjustrEnts fot:
(2,588)
Unrcalized foreign erchange gain D€pletion, depeciation and arbrtization Increas€ (decrease) in accrued t€tircnEnt liability Acca€tion epense
6EE,24r
Inter€st incorne
(40,904)
9,210
6,796
$731,71 9,918185
(344,4701 Qlr''ns)
(69,238)
u4,y3 r,6$n
t665,595
-
(39,6421 21,629
(188,8sr)
93233.369
58,561
16,330
(37r,140)
(124860)
v203 31,895
(506,150)
Net loss (gain) on frir value changes on financial assels at laivalue lhrough profit and loss Gin on saleofpmperty, plant and equipnEnt
Operating inconc beforc *orking
(1,5r
4,108
s)
(t2fl5)
3,887
(t7,892)
caphalchar4",
3r5s,s9l
r,099.556
Decrease (increase) in:
521fi62 286,913 2n2J39 (38s,643)
Receivabl€s
Gude oI inventory Advanc€s, prepaid epenses and oth€rcunent assers Incnase (decrcase) in accounts payable and
2J58,186
I,048,373
5,068,829
2828,587 t9t_429
552890 3,093,t74
Intercst r€caiv€d
87,N2 ts929t 2t9#5 (88,762)
8t0,075 t,430,!r60
40,904
cash activities CASH FI,OWS FROM INI'ISTING ACTIVNfiS Acquisitbns of pmperty, plant and equipnEnt hoceeds fiomdisposals ot
32,735
1035269
412r,5 t8
6,4E0,093
116,474
36t,980
4t2'433
(7,77e,ts31 (22816,1771 (7,7n154) l2O225,nT (],.l,53,g
-
Poperty and equipnEnt Financialassets at faivalue through prolit and loss Incrcase in capitalbd Lrtercst
21,961
Incrcase in Bdvanc€s and othefnoncur€nt asssrs Incrcase in defercd oilgploration costs
0,063,5t2)
81,997
.
-
l09Js2
(3,0s7,434)
4 t5?,885 (
(6259||l
(3,W
)
u63,600)
(EltJ35)
costs
Net cash used in
activ ities
CASH N-oWS FRO|\4 FTNANCINC
ACTIVIY
iom long-term debt
J,r62,900
Add itional capital fiorn noncontrolling intercs I
233544
Dividends paid
(320,269)
Intercst
12J89,538 15,?23,839
25,695,349
t,79l,t?5
E#E)05 2,t78,890
(336,10s)
(64J,48t)
0,252A8e)
I
cash
IFIECT OF
n,$7
2,682,255
IncoIIE
Prcceeds
4229,659
761
Qsh generated from op€rations
Incrcase in def€ned
(24880)
activilies
rcRA
D(CIIAGE RATE CHANCIS
IN CASH AND CASH
Nf,T INCREASE
(DERMSq
IN CASITAND CASH
DQU|VALN.{TS
(776,7r
CASHAND CASH NQWALD{TS AT BreINNII{G OF
Page 29
8) (109s7,s20)
r0,578,69
PERC SEC
8,926,695
-l7e
Qn90)
3d euarter 2013
PEIROE{RG}' Rf,SOURCES CORPOMTION AGNGOTACCO|,I{N PJ0B|JABI.B (IJNAIJDITED) AS OF
SIPTII!4BR 30. 2013
0-30
rh]s 3l{0 &ys
6l-90
&ys
Nstur€/DcscriFior
90 Vaalco, Cabon
Alcom Petmleun& Minerals Inc. Inteiest Receivable Othen IflpaifirEnt loss
$1,679,462 $t.679,462 61,608
&981
- Liffing proceeds and overyayrent 61.608 Advances for oil ploration Interest figm investrEnts e
8,98r
6,670 (61,608)
(6r,608)
Page 30
PERC SEC
-l7e
3d euarter 2013
CORPORA
IARIES
NOTES TO INTERIM FTNANCIAL STATEMENTS SEPTEMBER 30. 2OI3
(In U.S. Dollars)
l.
Corporatelnformation
a.
Orqanization PehoEnergy Resources corporation (the paxent company) was incorporated in the philippines on September 29, 1994 and started commercial operationa in 1995. The rLgistered office address of tlre Company is 7th Floor, JMT. Building ADB Avenue, Ortigas Center; pasig City. petroEnergy Resources Corporation and its subsidiaries are involved in rhe exploration- and developmenr -of petroleum, geoth€rmal and wind energ, resources. The parent Company's shares of stock are listed and are cunently traded at the phitippine Stock Exchange (pSE). On July 22,2009, the Board of Directors (BOD) and Stockholders approved the amendment ofarticles of incorporation of the Parent Company to include the business of generating power from conventional sources such as coal, fossil fuel, natural gas, nuclear and other traditional iurces of power and from renewable sources such as, but not limited to, biomass, hydro, solar, wind, geothermal, ocean and such other renewable sources of power. The amendment was approved uy ttri eni[ppine Securities and Exchange Commission (SEC) on September 23,2009.
On February 23,2010, the BOD approved the creation of a wholly owned subsidiary, petrocre€n Enerry corporation ("Petrocreen or.pcEc") that shar carry out the ienewabre enerry proje"t, ro, ir," Parent Company. The SEC approved pitroGreen lhe incorporation of
on June
30,20ib.-
On May 19, 2010, Petrocreen signed a Joint Venture Agreement (JVA) with Trans_Asia Oil and Energy Development corporation ("Trans-Asia") ind pNob Renewables corporation (,.pNocRc") (collectively th€ "JV Partners"), whereby the JV Partners agreed to pool their iesources together and enter into a joint venture to develop and operate the Maib'arara Giothermal Field 0rouih the formation of a joint venture named Maibarara ceothermal, Inc. (MGI). on August I r, zoro, trrlssa approved the incorporation of MGI, whose principal business is to deverop op..ut" giotn".*ur steam fields and power plants. Pursuant to the JvA, Petrocreen holds a 6j% interest in ricr, Tran-Asia and PNoc-Rc hord 25vo and l0%, respectivery. Mcr is effectivery, "rrir.a subsidiary'orthe
id
Parent company through petrocreen, since the parent company wholly owns petroGrien and
Petrocreen owns more than halfofthe voting power of MGl.
Through a Saecial Meeting ofthe Board ofDirectors in January 2013, petrocreen created its own wind subsidiary, Petrowind Energy, Inc' (petrowind) that will u;derrake the Nabas wind tower projlci (the 'Nabas Project"). Petrowind was incorporated on March 6,2013 as petrocre€n,s wtrolry-o"ireJ subsidiary. wirr undertake the Nabas wind power project as an incorporated Joint Venture Corporation among petrocr€en (40%), a foreign partner i301rro1, and a Filipino partner (3OZo) (collectively the .,Nabas JV partners").
lt
The Parent company, petrocreen, petrowind and
b.
Mcr
are colectivery referred to as the GrouD.
Nature ofoperations The Group's three (3) main energy businesses are petroleum, wind and geothermal energy.
Petroleum Petroleum p.rod]lctign h on-going in the Etame (Gabon) concession, while the other petroleum corcessions in the Philippines (Northwest parawan, offshore Mindoro, Eastern Visayas) are still in the advanc€d exploration stages or pre-development stages.
Page 3 I
PERC SEC
-l7e
3d euarter 2013
lVind Energt
on May 3l' 2013 the Departrnent of Energy confirmed the commerciality ofthe project through the issuance of confirmation of commercialiry No. WCC-2013-05-05.
Geothermal Energt
The g€othermal projecr is the 20 Mw Maibarara project in sto. Tomas, Batangas where MGI is now constructing the power plant for commercial operations by late 2013.
2'
summary of significant Accounting policies, Acconting Judg€ments, Estimates and Assumptions Basis of heoaration
The accompanying consolidated financial statements have been prepared under the historical cost convention method, except for financial assets carried at fair value through profit or loss (FVpL) and the Parent Company's crude oil inventory that have been measured at fair value. Figures are presented in united states (us) Dollar ($), the parent company's functional cunency. All amounts are rounded to the
nearest dollar unless otherwise indicated. Statement of Compliance
The accompanying consolidated financial statements have been prepared in compliance with philippine Financial Reporting Standards (PFRS). Basis ofConsolidation
The consolidated fnancial statements comprise the financial statements of the Group as at September 30,
2013 and December 31, 2012. The financial statements of the subsidiaries are prepared for the same
reporting year as the Parent Company, using consistent accounting policies.
Percentase of OwnershiD
2012 PGEC
l00o/o
PWEI
l00vo
800/0
l00o/o
MGI
65Vo
Navy Road Development Corporation (NRDC)
20t I
65% 't00%
100.
20t0
100%
t0Q%
65%
65%
100%
t00%
Subsidiaries are consolidated when control is transferred to the Group and cease to b€ consolidated wh€n control is transferred out of the Group. control is presumed to exiit when the Group owns directly or
indirectly through subsidiaries, more than halfofthe voting power ofan entity unless in exceptional casis, it
can be clearly demonstrated that such ownership does not Constitute control.
The consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances. All intercompany balances and trarisacrions, intercompany profia; and expenses and gains and losses are eriminated in the consoridation. intercomp*y uui-aa., fansactions, income and expense and profit and loss are eliminated in full.
A[
Non-conholling interests are presented separately from the parent company's equity. The portion ofprofit or loss and net assets in subsidiaries not wholly-owned are presenied' separatity ln rir. conrotiiai"a
statement of comprehensive income and consolidated statement consolidaied statement of financial position.
;f
changes in equity, within equity in the
Losses within a subsidiary are attributed to the non-controlling interests even balance.
if
that resuhs in a deficit
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for transaction. Ifthe Group loses control over a subsidiary, it:
r
Derecognizes the assets and liabilities_-of the subsidiary, the carrying amount interest and the cumulative translation differences, recorded in equity.
Page 32
as an equity
of any non-controlling
PERC SEC -l7Q 3'o Quarter 2013
Recognizes the fair value of the consideration received, the fair value of any investment retained and any surplus or deficit in profit or loss. Reclassifies the Parent company's share of components previously recognized in other comprehensive income to profit or loss or retained eamings, as appropriate. SEC Meno 3-2012
In compliance with SEC memorandum circurar No.3, series of 2012, the croup has conducted a study on the impact of an early adoption of PFRS 9. After carefur consideration of t^he resurts on the evaluation, the Group has decided not to early adopt PFRS 9 for its september 30,2013 and December 31, 2012 financial reporting. Therefore, these consolidated financial statements do not reflect the impact ofthe said standard.
impj
SEC Meno 6-2013
In compliance with sEC memorandum circurar No.6, series of 2013, the Group is has conducted
study the impacl of the following:
Titlc
Subiccl
AdoDted
Nol Adooted
a
Not
ADD|icrbl.
ImDrcl The adoption ofthe amended PAS 27 do not have
PAS
27(anended)
significant impact on the sepaote fi nancial stat€in€nts Sepamte Financial Ststements
ofthe entities in the CrouD.
Investment in Associat€s and Joint PAS 28 (amended)
Amendment lo PFRS I
No impact The smendments aff€ct disclosures only and hov€ no rmpact on theGroup's Disclosures- Offsetting Financial Assets and Financial Liabilities
financial position or performance.
A reassessment ofcontrol uas perfomed by the Parent Company on all its interests in other entities and has determined that there arc no addilional entities lhat ne€d to be consolidated or entities to b€ d€consolidated.
PFRS IO
Consolidated Financial Stltements
PFRS I
Ioinl Armncements
No impact Th€ adoplion will not have an impact on the cmup's
Disclosure of Interests in Other PFRS 12 PFRS
13
financial position or
en!t|es | fall Value
M€asur€ment
PAS 19, Employee Benefits (Revised)
corridor approach
;
concept
of
-
p€rformance. I
\o
significant impact
amendmen* to pAS 19 range from changes as to removing the
expected retums, interest
misr be
recognized
on net
-plan
obligation/asser service cost and net interest charged to p&L; remaining changes -in prans recognised in the other comprehensive Income and. past seryice costs are recogn'ized immediately. The revised standard also requies new discrosure including anaryses of definei benefit plans. amendmeni becam€ effective for annual periods beginning on or after January l, 2013, applfod resnospectively.The impact of the revised amendment in the Group for the periods December 31, 2013 and 2012 are as
tie
ro
ows.
Page 33
PERC SEC -l7Q 3d euarter 2013
Fair value ofplan
assets
(106230)
57,812
Net unrecognized acfuarial gains translation
3.
27.,343
(91.536) 33
t5.592
Cash and Casb Equiyalents This account consists of:
3l-Dec-2012 sl,020,234
Cash on hand and in banks
Short-term investments
I
Casl in banks eam interest at the prevailing bank deposit rates. Short-term deposits are made for varying periods of u_p to three months depending on the immeAiate cash requirements ofthe Group, and earn intiresi
at the prevailing short-term deposit rates.
In september 30,2013 and December.3 r, 2orz, the Group invested $0.70 million and $0.gr mi ion, respectively to short-term investments with periods more than three months but less than one yea.. These inveshnents were presented under advances, prepaid expenses and other current assets.
Interest income eamed on cash in banks and short-term investmenls amormted to S0.lg9 million and S0.51 as of September 30,2013 and December 31,2012, respectively.
million,
4.
Financial Assets at FVPL This account consists of: 2013
Marketable equity securities
$r r8,778
Investrnent in golfclub shares
3l-Dec-2012
sl25,s3l t7
$135
Net loss on fair value changes on financial assets at FVPL included in consolidated stat€ments of income amounted to $1,515 and $24,880 as ofSeptember 30, 2013 and December 31, 2012, respectively.
5.
Receivables - net This account consists of:
3l-Dec-2012
Accounts receivable from:
Consonium operator Others Interest receivable Less allowance for
$1,741,071
s2,021,687
6,670
|,969
|,7 56,722
717 2,047,373 65
6l
tt4 aJe
age
sl.982.027
consortium operator and are due within one year. Carrying
.ma1t1, T''".:1"""1":::"-.l:*11 -tom varues as or year-end approximate their fair values.
Page 34
PERC SEC -t 7Q 3d euarter 2013
The table below shows the disclosure ofreconciliation ofallowance for impairment losses for receivables
from a consortium operator:
J r-Dec-
Balances at beginning ofyear
Eflect
6.
of
$65,346
t2
$61,r87
translation
4.r59
Advances, Prepaid Expenses and Other Cnrrent Asseis This account consists
of: 3-Dec-12
Advances lo contractors - current ponion Short-term investments
Input VAT Prepaid expenses Deferred financing costs - undrawn portion Others
$r,581,168 701,034 2,588,667
$3,8r7,795 814,741
709,4r2
361,854
{7(
174,978
542,498 30,600
KSS
Advances to contractor pertain to the down-payment to EEI Corporation and various contractors for the consmrction of power plant in the MGpp. Arso, downpayments made for the civir works. switchvard and fiansmission line of the Nabas wind project were made during the 3'd quarter 20r3. Thi; b;;p;ri;; against future billings in the course of construction. The non-current which are estimated to ue apprea against progress billings within one year from reporting date are crassified under ..edvances, prepaid expenses and other current assets".
wi
Short-tem investments pertain to money market placements with maturities of more than three months but less than on€ year.
Input VAT is recoverable in future periods. Prepaid expenses include prepaid insurance and professional fees.
Deferred financing cost (DFC) undrawn portion represents the portion of the incidental costs incuned in obtaining the loan pertaining to the undrawn amount of the total loan. As of December 31,2012 ard september 30, 2 | 13, DFC - undrawn portion amounted to $0.17 mirion and $0.54 million.
"Others" pertain to software licenses, advances to employees, supplies and deposits.
Page 35
PERC SEC - t7Q 3d euarrer 2013
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Page 36
PERC SEC -l7Q
a\
3.d
Quarter 2013
8.
Deferred Oil Exploration Costs 3I
Balance at beginning ofyear Intemal development
s6,643,203 3,057 ,434
Reclassification to wells, platforms and
-Dec-12
$5,831,668 811,535
other facilities Balance at end of
Under the SCs entered into with the DOE covering certain petroleum contract areas in various locations in the.Philippin€s, lhe participating oil companies (collectively kno*'n as Conrractors) are obliged to provide, at their sole risk, the services, technolory and financing necessary in the performance oftheir obligations under these conhacts. Th€ Contractors are also obliged to spend specified amounts indicated in thi contract in direct proportion to their work obligations. However, ifthe contractors fail to comply with their work obligations, they shall pay to the govemment the amount lhey should have spent bul did not in direct proportion to their work obligaiions. participating companies have Operating Agreements among themselves which govern their rights and obligitions undei these contracts.
lie
The full recovery of these deferred costs is dep€ndent upon the discovery of oil in commercial quantities from any ofthe petroleum concessions and the success of future development thereof.
9.
Investment Property As of September 30, 2013 and December s31,417.
3
l,
2012, this account consists of land with total carrying value
of
The fair value ofthe investment properties ofthe Group amounted to $4?,6g3 as of september 30,2013 and December 31, 2012. The fair values of the Group's investment propenies have been ditermined on the basis ofrecent sales_of similar properties in the same areas as the inveitment properties and taking into account the economic conditions prevailing at the time the valuations were made. Except for insignificant amounts of real property taxes on the investment properties, no other expenses were incurred, and no income was eamed in refation to the investment properties in September 30,2013 and
Decernber'31,2012.
10. Investment in Navy Road Development Corporation gNRDCy As
of
September 30, 2013 and December 31, 2012, this account consists ot:
Acquisition
cost
$260,388 54,032
Advances
Investnent in NRDC represents investment in subsidiary due to the Group's 100% hordings in NRDC'S capital stock. Below is NRDC's financial position as of September 30, 2013 and December
3
t, 2012:
Financial Position Current assets
$-
Noncurrent assets Allowance for
366,t93
I Page 37
PERC SEC
-l7e
3d euarter 2013
Total Assets Cunent liabilities Noncurrent liabilities Toral Liabilities Net assets
$-
As ofseptember 30,2013 and December 31, 2012, NRDC has not commenced commercial operations and has not incurred any expenses as ofseptember 30,20r3 and December 31,20r2. Management intends to liquidate NRDC and has provided for full impairment losses on this invesmenl I
l.
Advances and Other Noncurrent Assets
3l-Dec-2012 Advance rent - noncurent portion Restricted cash Advances to contractors Deferred financing costs - noncurrent Others
$2,3 17,840
$2,457,440
63,125
63,t25
s2,962
on April23, 2Q12, the company entered into a Land Lease Agreement (LLA or the Agr€ement) with the
National Power Corporation (NPC) and the Power Sector Assers and Liabiliries Managlment Co.porution (PSALM) over the MGPP's steamfierd lot in sto. Tomas, Batangas. under the LLA, thetompany r r"^" the steamfield lot for a period of 25 years, extendable for another 25 years upon mutual agreement of the parties' Advance rent-noncurrent portion pertains to the advance rental payment paid for the lease agr€ement' The current portion due in one year is shown as part of.,Advances, expenses and other
*
irepaid
current assets" in the consolidated statem€nt offinancial position.
Restricted cash pertains to the parent company's share in the escrow fund to secure payment and discharge of-the Parent Company's obligations and liabilities under the Floating Production dtorage and offloadii'g (FPSO) contract. The amount was deducted fiom lhe parent company;s share on lifting pioceeds during th! first lifting made by Etame in November 2002 and will be paid ba;k r; the parent compiny at the end oTthe contract which is in 2020. Other noncurrent assets pertain mainly to defened input VAT and other assets.
12. Accounts Payable and Accrued Expenses including
Divid6liFayable
Accounts payable Accrued interest payable
sr,181,909 |,837,843
Accrued expenses Dividends payable Withholding taxes payable
230,143 248,033
5t,092
Others
3l-Dec-2012 s3,226,2t0 683,762
47t,287 260,098 t25,261 747
Accounts payable consist ofpayable to suppliers and contractors. Accrued expenses are as follows:
Profit share
$
Professional fees and other fees S
ick/Vacation leaves
157,020 15,999 57
Page 38
,t24
3l -Dec-12 $224,884 81,465 67,739
PERC SEC -l7Q 3d Quarter 2013
Insurance
6t,429
Trust fees
35,770
Accrued interest payable pertains to accrual for interest on loans. Dividends payable pertain to unclaimed checks as ofseptember 30,2013 and December 31,2012. Professional. fees and oth€r payables mainly pertain to accrued professional fees, security sewices, utilities
and condominium dues.
The G,roup's accounts payable and accrued expenses are due within one year. carrying varues approximate their fair values as ofSeptember 30, 2013 and December 31. 2012.
13. Loans Payable 3l-Dec-2012 $52,650,207 r.217
Less unamonized defened Loans
s39,gst ,279
Or_September26,20lt, MGI together with PNOC Renewables Corporation and Trans-Asia entered into $54'7 million Omnibus Loan and Security Agreement with RCBC and BPI specifically to partially
the design, development, procurement, construction, operation and maintenance plant project.
a
finance
of iL g*thermd po;",
In July 19, 2013 PERC (Parent Company) availed a USD$3.5 million loan to various lenders, to finance it,s Gabon Expansion Project. This Loans payable is payable after 2 years with a 3.89802 semi annual interest. As of September 30, 2013 and December 31, 2012, MGI has outstanding drawdowns of$49.15 million anct $39 95 rnillion,_ respectively. The remaining barance be subsequenfly drawn based on a certain
wi
drawdown schedule.
The loan
is
payable semi-annually within ten (10) years from and after the date of initial drawdown the signing date, payments to be made in fourreen ( 14) semi_annuat principat nrstallment commencing on the end of 6th semester from the date of the initial drawdown, incluiive oi a grace. period of thirty-six (36) months. The amount of roans payable is presenred as part of noncurrent liabilities.
IT:lTly ili:"ing
The raie of interest applicable to the loan is fixed for the fint five (5) years from the initial drawdown date based o.n th9_s11.of the prevailing fixed benclunark rate on the p;i;ing date and the margin or z.s%" per (the "lnirial lnterest Rate"). After five years tiom the date'of thJ firsr initial drawdJwn, fl1; lnnum for the remaining 5 years tenor shall be-renricid based on the higher of: (i) the sum or me tfren prevairjig fixed benchmark rate plus the margin of 2.i5t/o per annum, or (ii) tlhe Initial Interest Rate.
i"d;;
Defened financing costs are incidental costs incurred in obraining the loan which includes documentary
stamp tax, transfer tax, chattel mortgage, real estate mortgage, professionar fees, anangers'
out-of-pocket expenses.
rrr
ana ott "",
Total deferred financing costs amounted to $ 1.6 million. As of september 30, 2013 and Decemb er 3r,2012, the portion pertaining to the drawn amount of the loan amounting to $1.2t7 million and $t.ot miihon is presented as deduction from the loans payable account and is amortized over the life ft" tf,; eff€ctive interest rale method. Amortization of deferred financing cost will "f until ali;c;;aly "ri"g be capitalized activities to pr€pare the power plant for its intended use are substintially complete.
f"-
Page 39
PERC SEC -l7Q 3d Quarter 2013
Details ofunamortized deferred financing costs are as follows:
Balances at beginning ofyear Deferred financing costs on loan drawn during the
3l-Dec-12 $1,007,835
$393,792
334. t93
st,342,028
Less amortization during the year
Gain / Loss on Balances at end
$1,159,933 152,098
73,435
5l
of
1.2t7
The portion pertaining to the undrawn amounl of the loan is presented as an asset in the consolidated offinancial position. As ofseptember 30,2013 and December 3r,20r2 $0.53 milrion and $0.g6
statements
millio-n, respectively are presented as curenr asset under "Advances, prepaid expenses and other cunent assets" account.
f{GI
ha.s pledged
a
portion of. its
and property plant and equipment amounting
.land Sl.512 million as collateral in connection with the toan. niedgeO Lsets are as follows:
.
Real estate (land
o
$0.77 million: and Chattel (under "Property, plant and equipment") -$0.742 million.
to be
to
used as power plant site, under ..property, plant and equipment,,) -
Below are the accumulated capitalized bonowing costs as of september 30, 2013 and December 31, 20r2:
Balances at the beginning ofyear Interest incurred durins the Balances at end of Deferred financing cost Balances at the beginning ofyear Amortization dudns the Balances at end of
$ 2,t 67 ,924
$10,039
4.089.930
t57 t67
159,338
7 ,240
73,435
t52.098
232.173
159
Theloan-covenants covering the outstanding debt of MGI incrude, among others, maintenance ofcertain level ofd€bt-to-equity and debrservice rati;s. As ofseptemoer:b, zot: and December3l,20r2,the Group is in compliance with the said loan covenants.
14. Equity
of the Republic of the philippines, at least 60% of the parenr Company,s issued ^U:dfl caprnr *^:iitj1.q stocK should]aws be owned by citizens of the philippines for the Group to own and hord any mining, p€foleum or renewable energy contract area. As of iicember 3r,2012, the total issued ano suuscribi capital sock the Parent company is 99.75o/o Firipino and o.z5o/. non-Filipino, as compared t, sgslr" -of Filipino and 0.137o non-Filipino as of December 31, 20tl and 99.72o/o Filipino and o.ztl" non-Filipino as
ofDecember 31. 2010.
on February 23, 2010, the BoD approved a l:l stock Righrs offering (SRo). under the SRo, the shares at curent market prices. The SRO was undertaken during tire period s€ptember 28 to July 5,2010. Total pfoceeds from the sRo amounted to !ir4.8 million.
were offered
As of september 30, 20r3 and December 31, 2012, capitar stock consists of330,000,000 authorized and 273,824'220 issued and outstanding common shares with par value ofPr (s0.0244) per share. Total capital Page 40
PERC SEC
-I
7Q 3rc Quarter 201 3
stock and additional paid-in capital amounted to $6.32 million and s25.24 million, respectively, as September 30, 2013 and December 31, 2012.
of
Capital Stock The Parent Company's track record ofcapital stock are as follows:
Number of Listing by way of introduction August I l, 2004 Add (deduct): 25% stock dividend 30Plo stock dividend l; I stock
3l,
Date ofSEC
-
2010
84,253,606
P3/share
2t,063,402
Pl/share September6, 2005 F l/share September 8, 2006
31,595,102 t36.912. r
August 4, 2004
t0
273,824,220
2,149
Movement Decamber
3l, 20l l
December
3
A
273,824,220 I I
l3
ddit ional P a id- in C aD ital
20t2 Balance at beginning ofyear Stock issuances Balance at end of
20t
I
s25,244,737
$25,244,737
2010 st 3,390,875 I I a<'l a<,'
737
$2s.244.t37
737
Dividends The BOD approved the declaration ofcash dividends as follows:
luly 22, 2013, 5% or $0.000 1 per share cash dividends to all stockholders of record as ofJuly 25, 2013 amounring to $643,838. The dividends were paid on August20,2013April26,20l2, l0% or $0.002 per share cash dividends to all stockholders ofrecord as of
$315,247
September 2l, 2012 amounting to $643,838. The dividends were paid on October 17,2012. 4pfl26,2012, l0% or $0.002 per share cash dividends to all stockholders ofrecord as of May 18, 2012 amounting to $643,938. The dividends were paid on June 14, 2012. Msy 17,2011,10% or $0.002 per share cash dividends to all stockholders ofrecord as of September 20, 20t I amounting to $631,951. The dividends were paid on October 14, 201 l.
20t2
201|
2010
$-
s-
s-
$-
$-
$643,838
643,838
631,951
May 17,2011, l0% or $0.002 per share cash dividends to all stockholders ofrecord as ofJune 16, 201 I amounting to 5629,120. The dividends w€re paid on July | 3, 201 l. Octob€r 2 |, 2010, I0% or $0.002 per share cash dividends to all stockholden ofrecord as of
$-
November 8, 20 I 0 amounting to $63 I ,295 . The dividends were paid on December 2, 2010. February 23,2010,20% or $0.004 per share cash dividends to all stockholders ofrecord as of
$629,120
63t,295 606,208 Page
4l
PERC SEC -t7Q 3'dQuarter2013
March 15,2010 amounting to S606,208. The dividends were paid on April 5. 2010.
Appropr iated Retained Earnings on January 15, 2008, the BoD approved the appropriarion of $0.49 milrion for the development of the Ebouri oil field in Gabon, in addition to the $0.56 miliion originally appropriated amount. Participation in the development ofthe Ebouri fierd by the parent bompany has been approved by the
on the same date.
BoD
On July,24, ?008, the BOD apptoved additional appropriation ofretained earnings amounting to $1.0 million for the development ofthe Ebouri oil field in Cabon, West AAica.
Total appropriations for the development of Ebouri oilfield as of september 30, 2013 and December 31, 2012 amounted to $2.06 mi[ion. Further expansion of the said oirfi"ra i. on-going and h set to be completed in 2015.
on February 19, 2013, the BoD approved additionar appropriated retained earnings amounling to $1.09 gtlt::i:,":.1* for the parent companv's share in the cbit of lhe committed we s in Gabon am-ounring to lJ.I ) m lton. Capitql Management The primary objective ofthe Group's capital management is to ensure that it maintains a sfong cr€dit rating and healthy capital ratios in order to support its business and maximize sharehorders,
value.
The Group manages its capital structure and makes adjustments to it, in light ofchanges in economic conditions. To maintain or adjust the capital structure, the Group rnuf in"r"a"" its debt frorn creditors, adjust the dividend payment to shareholderj or issue new shares. As
of
september 30,2013, the Group monitors capital using a debt-to-equity rario, which is
divided by total equity.
As ofseptember 30' 20r 3 and December
3
toal liabilities
r, 2012, the Group's sources of capitar are as folows:
3l-Dec-2012
Loans payable
Additional paid-in capital
$51,432,982
s38,948,444 25,244,737 8,963,497
25,244,737
Retained Eamings stock
9,974,359 1.533
I
II
s79.473.21|
The table below demonstrates the debt-to-equity ratio ofthe Group as of Seprember 30, 2013 and December
3l,20t2:
Loans payable
$51,432,982
$38,943,444
3,613,654 265,296
5,002,365
506,957
75,015
Accounts payable and
accrued
expenses
Asset retirem€nt obligation Income tax payable
Accrued retirement
39.1l3 $ss
Total equity Capital stock Additional paid-in capital
237,668
/))
$44.337.247
s6,321,533
$6,32r,533
25,244,'137
25,244,737
Page 42
PERC SEC
-l7e
3d euarter 20t 3
Retained earnings
Appropriated Unappropriated Cumulative translation adjustment Interest
3,149,555 6,824,804
z,u)),)))
(485,559)
7'78,3'12
6,907,942
4l
7.08t.7
Based on the Group's assessment, the capital management objectives were met in september 30, 2013 and December 31, 2012.
15. Related Party Transactions Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financiat and opemting aec;rion" Parties are also considered to be related if they are ruui"ir to aornrnon ol or significant influences. Related parti€s may be individuals or corporate entities. "ont Transactions with related parties consist mainly of unsecured, non-interest bearing advances to subsidiari€s, which are curently due and collectible and which will be settled in cash. These aJvun"", ."prar"nt incurred by the Parent company in behalfofthe subsidiaries for the wind "*prn.", and geothermar enerry proje'cts.
The Parent Company's transaclions with r€lated parties consist mainly of reimbursements of research costs and payments of management fee, which are recorded under miscellaneous income in the parent company statements of income. There were no outstanding intercompany barances as of septembei 30, 2013 and December 31,2012. Details ofrelated party transactions are as follows: Amount oftransactions
Related Pany Subsidiaries PetroCreen R€soulces
2013 Rental income
3l-Dec-2012
$-
$r1,792
|,167
24,004
I, t67
'196
$l14,484
st52,725
Due to
Jun-2013 3l-Dec-20t2
$-
Terms and
$-
Corporalion Advancas Maibarara Geothermal
Managemgnt Income
ncorpofilted Rental income
Below are additionat
oir"ursio@pany
Fansactrons;
Advances pertain to the reimbursable expenses incurred by the Parent company in behalfofits subsidiari€s. Rental income is derived fi'om the sublease agreement between the parent company and its subsidiaries, PGEC and MGI, who, together with the parent Company, occupy a single unit in the JMT building. Allocation ofrental charges is pro-rated based on aciual-area occuoiea--
Page 43
PERC SEC
-l7e
3d euarter 2013
Management income from MGI is based on an annual management fee of$0.12 miltion, by virrue ofthe agreement between MGI and the Parent Company that the tatter will be providing management services to MGI in exchange for the annual management fee. Accounts payable to NRDC pertain to the long-outstanding amount owed by the parent Company to NRDC as of September 30, 20l3 and December 3 t,20lr2. There are no other transactions with any party aside from the above.
lO. S€qment lnlormation For management purposes, the Croup is organized into business units based on their products and has four reponable segments as follows:
o ' ' e
The oil segment is engaged in the oil and minerar exproration, development and production. The geothermal energy segment will develop and operate geothermal steamfields and power plants. The wind energy segment carries out the general business ofgenerating, transmitting, and,/or distributing power derived fiom wind energy sources. Other services
No operating segments have been aggregated to form the above reportable operating segments. Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss and is measured consistently with operating profit or loss in the consolidated financial statements.
oil Net incom€ (loss) Segment assets Segment
liabilities
Production
Geothermal Energy
$2,0r8,196
($725.5 r2)
49,t0t,'t'12
Other servtces ($r,3 r4,405)
70,772,461
r,684,093
$4,596,538 55t,2t9,026
sl ,421,142
$847,83
|
16,997,7 5
Elimination
Consolidated
(664)
445
(25,886,93r) J-
89,437
91,452,76s 844J37,247
3l-Dec- l2
oil
Geothermal Energy
Wind
Production assets
43.8'72.743
,23 |
t2,95'1.722
Iiabilities
$
Others
Elimination
Consolidated
Net income
34,600 1.070.458
s43, r66,65
I
$
r00. t38
Page 44
I
$-
9t.4 $44
PERC SEC -l7Q 3d Quarter 2013
IO. OTHERS
a. b.
c. d. e.
The Int€rim Financial Report (September 30,2013) is in compliance with generally accepted accounting principles. The same policies and methods of computalion were followed in the preparation ofthe interim financial report compared to the December 31, 2012 Audited Financial Staremenrs.
No unusual item or items affected the assets, liabilities, equity and cash flows ofthe September 30, 2013 Financial Statements. Earnings per share is presented in the face of the Unaudited statements of income for the period ended September 30, 2013 ard2ltz.
No significant events happened during the quarter rhat will affect the September 30, 2013 Unaudited Financial statements.
f.
There are no seasonal aspects that had a material effect on the financial condition or results ofoperation
ofthe Company.
g. h. i' i.
There is no foreseeable event that will higger direct or contingent financial obligation that is material to the Company, including any default ofaccelerated obligation.
There are no material off-balance sheet transactions, arrangements, obligations and other relationships ofthe Company with other entities or persons that were creaied during thJperiod. There are no changes in estimates of amounts reported in prior periods of the current financial year or changes in estimates of amounts reported in prior financiai years that could have material effec; in fte current period,
?.]1"/"
2006.
of the Company's Additional Paid in Capital were issued as stock dividend and paid in March
We are not r^equired to disclose segment information in our financial statements because we only have one source ofrevenue which is oil operation. There. are no changes
in the composition of the issuer during the interim period, including business combinations, acquisition or disposar.of subsidiaries and rong term inveitmenti, restruci'ing and discounting operations during the
period.
Our Company has no contingent liabilities or assets during the period
Page 45
PERC SEC -l7Q 3'o Quarter 2013
PETROENERGY RESOURCES CORPORATION AND SUBSIDIARIES SUPPLEMENTARY INFORMATION AND DISCLOSURES REQUIRED ON SRC RULE 68 AS AMENDED SEPTEMBER 30, 2013 Philippine Securities and Exchange Commission (SEC) issued the amended Securities Regulation Code Rule SRC Rute 68 which consolidates the trvo separate rules and label€d in the amendment as "Part l" and'Part tP', respectively. It also prescribed the additional information and schedule requirements for issuers ofsecwities to the public. Below are the additional information and schedules required by SRC Rule 68, as Amended (201l) that are relevant to the Group. This information is presented for purposes of filing with the SEC and is not required part ofthe basic financial statements.
Schedule A. Financial Assets The Group is not required to disclose the financial assets in equity securities as the total FVPL amounting to $0.14 million do not constitute 570 or more ofthe total current assets ofthe Group as at September 30, 2013.
Schedule B. Amounts Receivable from Directors. Officers. Emplovees. Related Parties and Principal Stockholders (Other than Related Parties)
As ofSeptember 30,2013, the group does not have advances to employees with balances above F100,000 ($2,297) as at September 30, 2013: Schedule C. Amounts Receivable from/Payable to Related Parties which are eliminated durine the Consolidation of Financial Statements
The following is the schedule ofreceivables liom related parties, which are eliminated in the consolidated financial statements as at September 30,2013: Balance
Amounts Amounts collected written off
at Name and Designation of debtor
beginning
$-
P€trocreen Energy Corporation Maibarara Geothermal, Inc.
Petrowind Enerqv
Inc.-
ts
Additions
|
$1,167 $r,167 18.033 [8,033 -
$trr,r00
$*
Not
Curent
Balancc al end of
$-
srtr,ro
Schedule D. lntaneible Asset The Group has an insignjficant amount ofintangible assets as ofseptember 30, 2013 amounting to US$0.032
million
.
Schedule E. Lonq-term Debt Below is the schedule of long-term debt ofthe Group as of September 30, 2013:
Amount shown under caption "Current portion of long-term debt" in
Title of Issue and
type
of
obligation
Amount authorized by indenture In Original Currency -
ln USD
PHP Loans payable
?2,292,390,000
852,650,207 Page 46
of
Noncurrent portion shown under caption "Loans payable" in the Statement of
Financial Position
Financial Position
s-
$52,650,207
the Statement
PERC SEC -'l7Q 3'o Quarter 2013
$-
Less:
Unam
ortized deferre
d financi cost
at"d Cornpuni"r)
The Group has no outstanding long-term indebtedness to rerareu parties as or septernber
lo, zot:.
Schedule G. Guarantees ofsecurities ofOther Issuers The Group does not have guarantees ofsecurities ofother issuers as ofsept€mber 30,2013. Schedule H. Capiral Stock
Number
of
Shares
ano
res€rved for
outstanding
options, warmllts, conversion and other
as shown
Number
of
Number of
shar€s issued
sntues
under related balance sheet
330,000,000
273,824,220
Title of issue Common Shares
Number
of
shares hcld
by related
Directors, Oflicers and
2,115,010 2'n,709,210
Page 47
PERC SEC
-l7Q 3'" Quarter
2013
PETROENERGY RESOURCES CORPORATION AND SUBSIDIARIES SCHEDULE OF FINANCIAL SOUNDNESS INDICATORS AS OF SEPTEMBER 30,2013 AND DECEMBER 31.2012 ^nd2012 Financial Soundness Indieator Below are the financial ratios that are relevant to the GrouD:
Current ratio
Total current assets Total current liabilities
Solvency ratio
After tax net profit + depreciation Long-term + short-term liabilities
Debt-to-Equ ity Ratio
Asset-to-Equity Ratio
Interest rate coverage ratios
for Net
Income
Attributable to Equiry holders of Parent Company
Price Eamings Ratio
0.97:l
0.941:l
2.16:l
|
.97:l
1.941: I
0.44:l
1.80:l
1.50: I
s0.005
$0.008
$0.009
s26.24
$17 .37
sl6.5l
8-43o/o
21.28o/o
l8.l l%
l:07
0.87:l
0.83: I
5.78
2.93
Net income Weighted average no.
ofshares
Net income Total revenue
debt-to-equity
ratio
Long term debl Equity
to total
l.l6: I
Closing price
Retum on revenue
EBITDA
0.09:l
(EBIT)
Eamings per share
paid
0.08:l
Eamings before interest and taxes lnterest expense*
t€rm
0.05:l
Total Assets
Total Stockholder's equity
Long
6.03:
Total Liabilities Total Stockholder's equity
Eamings per share
I
9.87:l
interest
EBITDA*,} Total interest paid
*Interest expense is capitalized as part ofthe construction-in-progress account under ppEqnd before interest, taxes, depreciotion (EBITDA) amofiization 'aEarnings
Page 48
PERC SEC -l7Q 3'Quarter2013
PETROENERGY RESOURCES CORPORATION RECONCILIATION OF R.ETAINED EARNINGS AVAILABLE FOR DIVIDEND DECLARATION SEPTEMBER 30. 2013
Net income based on the face
of linancial
Less: Non-actual/unrealized income net
statements
2,018,196
oftax
Equity in net income ofan associate/Jv Umealized foreign exchange gain net attributable to cash and cash equivalents)
-
(except
those
Unrealized forex gain
6,796
Fair value adjustment (marked-to-market loss)
(l,srs)
Fair value adjustrnent of investmenl properties resulting to gain
Adjustnent due to deviation from PFRS/GAAP - gain Other unrealized gains or adjustments to the retained €amings as a result of certain transactions accounted for
under PFRS Add: Non-actuayuffealized losses net oftax Depreciation on revaluation increment Adjusunent due to deviation from PFRS/GAAP - loss Loss on fair value adjustment
ofinvestment properties
Movement in deferred tax assets Net income actuayrealized
2,023,477
Less: Dividend declarations during the year
Total Parent Company Unappropriated R€tained Earnings Available For Dividend Distribution,
Page 49
3 $10,387,434
PERC SEC -l7Q 3'o Quarter 2013
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Page 50
PERC SEC
-l7Q 3' Quarter
2013
PETROENERGY RESOURCES CORPORATION REPORT ON SRO PROCEEDS SEPTEMBER 30. 2013 on February 23,2010, the BoD approved a
l:r
stock Rights offering (sRo). The SRo was undertaken during oflhe SRO ariounted to $14.g million.
the period September 28 to July 4, 2010. The proceeds
As_disclosed in the Prospectus the company expects to ralse gross proceeds ofapproximately usD 14.g2 million or Php 684.56 Million and after deducting listing, regisrratibn fees relared to the offei of$14.25 million or Php 681.656 million. These proceeds will be used to finance the group's share in the construction of2gMw
MGPP.
As ofseptember 30, 2013, remaining proceeds amounted to $3.g milrion or php l62.74l million. The table below shows the gross and net proceeds; each expenditure item where the proceeds were used and the balance ofthe proceeds as ofseptember 30, 2013.
Procee& from the SRO Goss Proceeds Less: Listing and registration fees Net Procee&
6
14,817,328
24,333
r4J92,995 2010,20t
|& lst
2012
atrd 2nd
Qrtr 2013
Irss: &penditures DOE awards service contract
8,196
l,G.J & stakeholder coordination
7,t72
Geos
8,t!x 1,997
9,t69
49,623
t,67,:269
cientific studies & resource
assessIIEnt Land rights acquis ition
63,293
1,6t7,64
Obtain DENR Clearances & Other permits Establish logistic station
& water supply preparations Well work-over & drilling preparations L"and
Wort-over ofthree (3) wells Drilling oftwo (2) new wells Flow test & bore output npasurenEnts Engineering & design of steany'brine
63,293
65,338
65,338
l l,660
n,ffi
384,008
384008
l3l,600
131,600
m,sls
1,8E8,079
32ffi,02s
132,781
3398,806
325,175
117,422
I,659,50r
M)
<q7
lines
61,296
Financing, Gid lnpact Study& power Contraci
6t,296
I t,275
n,275
Construction offluid collection and reinjection system Power Plant Generdl & administrat ive eryenses
Incorporation of MGI Property & equipnEnt Total
|,t44,557
455,724
r,eoo,ztr
164,772
I,149,105
t,150,8t
10,940,416
48,443
984,333 9,789,519
48,443
Forer Differences
Remairing Procee& as ofSepember 30, 2013
___$$!zfgq
Renuining Procee* itr Php
,P,167,74r34r
Page
5l
PERC SEC -l7Q 3'" Quarter 2013