Enexor in talks with potential partners over SC55 drilling

ACE Enexor Inc. is in active discussions with potential partners about oil drilling in Service Contract 55 (SC55) offshore west Palawan.

“We’re focusing a lot right now in terms of derisking it and looking for partners. We’re actively talking with them in different stages. Some of them have initially approached, they are evaluating opportunities, some of them are in early discussions to actually gauge their interest,” said Enexor President Rolando Paulino during a virtual press briefing.

Enexor continues to derisk the SC55 prospect, including ongoing efforts to explore potential partners, and drilling preparations. The SC55 consortium, which is 75-percent held by Palawan55 and 25 percent by Pryce Gases Inc., is expected to drill an appraisal well next year.

Palawan 55, meanwhile, is 75 percent owned by ACE Enexor and 25 percent owned by AC Energy Corp. (ACEN).

“The next step is to drill a well, $40 to 50 million to actually do it.  This is pre-Ukraine figure, that’s something we need to continue to evaluate. Depending on the equity we will end up with as part of getting partners, we will allocate such amount so we can go to the next step of the drilling,” said Paulino.

ACEN President Eric Francia said Enexor wants to make sure that it selects the right partner given the size of the project cost.

“We are not talking small money here. When developing projects like this one, we are very prudent and judicious. We need to bring in the right partners early on so when we get to the more advance stage, the right resources and expertise will be there,” Francia said.

When asked if Enexor is willing to let the prospective partner own more shares than Enexor, Paulino said “it depends on the partners” if they would like to have a bigger share and if they really have the capability.

“We will offer it as long as we have some level of equity. The reality is, we’re talking of big amounts. We want to make sure we derisk it.”

The SC55 consortium earlier said that drilling activities will take place in April next year.

Enexor said it will be involved in a capital raising program to support some of its planned energy transition projects.

“We will be issuing up to 74 million shares in June 2022 as a follow on offering and to comply with Philippine Stock Exhange’s rules on backdoor listing. Within third quarter, we will acquire the diesel and Palawan 55 interest through a tax free exchange and following that a Stock Rights Offering to allow existing minority shareholders to catch up and increase their interest,” said Paulino.