ACE Enexor Inc. is cautiously optimistic that the ongoing Covid-19 vaccination drive would boost the country’s oil and gas exploration and development activities as it prepares to submit its drilling plans for Service Contract (SC) 55.
“We are cautiously optimistic vaccine will help stimulate commercial activity to fuel revival of the upstream industry. The signs in the first quarter are promising. Oil prices have rebounded to pre-Covid levels and drilling activities in the region are slowly picking up. We are hoping the trend will be sustained in the near term,” said ACE Enexor Chairman Eric Francia during the company’s annual stockholders’ meeting yesterday.
ACE Exenor subsidiary Palawan55 Exploration and Production Corp. is the operator of SC 55. Palawan55 holds a 75-percent interest in the gas prospect while the remaining 25 percent is under Pryce Gases Inc.
SC 55 is a deep-water block located in the southwest Palawan Basin, covering an area of 9,880 sq. km.
Francia said Palawan55 is in the process of preparing its drilling plan and would be submitted to the Department of Energy (DOE) within the first half of this year.
“Once they approved our plan, we will then commence our procurement of services for the drilling equipment and drilling services in the second half of this year and we’re targeting, at the earliest, second quarter of 2022 actual drilling. So we’re still very much on track,” said Francia.
According to ACE Enexor Chief Operating Officer Raymundo Reyes Jr., the preparation of drilling proposal for exploratory well is underway. He described the plan as “comprehensive technical document that details the plan for constructing borehole and evaluate rock formations and fluids that will be encountered in the subsurface.”
Once completed, the proposal will be submitted to the DOE for approval.
“Following DOE’s go-ahead, Palawan55 will commence tendering process for the required drilling, major drilling equipment and supplies, and oil field services,” said Reyes.
Amid the preparations, the SC55 consortium requested the DOE to declare a one-year force majeure but has yet to be acted upon by the agency.
“We are aware of headwinds the pandemic might pose in the near future, such as mobility restrictions and potential supply chain disruptions. Our consortium has requested the DOE for declaration of a one-year force majeure to cover any unforeseen delay in drilling timetable. Should the force majeure be granted, the SC55 venture will nevertheless continue to exert best efforts to deliver obligatory well as soon as reasonably practicable,” said Reyes.
Meanwhile, AC Energy Corp. (ACEN) reaffirmed the Board’s decision to infuse the international assets of its parent, AC Energy and Infrastructure Corp.
The international assets are comprised of approximately 1,400 MW of attributable capacity in operation and under construction across multiple geographies including Vietnam, Indonesia, Australia and India. One hundred percent of these capacities are from renewable sources—particularly solar, wind and geothermal.
After the infusion is completed, the listed company’s attributable capacity will increase to 2,400MW. Of which, over 1,800MW or 77 percent will come from renewable sources.
This puts AC Energy in an excellent position to attain its vision of reaching 5 GW of renewables by 2025, and realize its aspiration of becoming the largest listed renewables platform in Southeast Asia.
It is also strengthening its balance sheet and augmenting its cash position. It had just completed its stock rights offering which allowed the company to raise P5.4 billion from the issuance of 2.27 billion primary shares. This was followed by the successful completion of a private placement of 4 billion primary shares to GIC, Singapore’s sovereign wealth fund.
The private placement added around P11.9 billion of cash, resulting in a total of P17.3 billion pesos of additional cash in the first quarter of 2021.
The planned infusion of the international assets and the recent fund raising will further grow the company’s balance sheet by about three and a half times.
“Our strong balance sheet is complemented by a robust pipeline of renewable projects, and our highly capable and motivated team places AC Energy in an excellent position to play a meaningful role in the green-led recovery.
We remain committed to continue this journey as we all work towards our aspiration of becoming the largest listed renewables platform in Southeast Asia,” said Francia.
ACEN now has over 1,000 MW of attributable capacity in the Philippines, with almost half coming from renewable sources. “We expect the share of renewables to significantly grow over time as the company focuses on scaling up its investments in solar and wind farms.”