MANILA: Shares of the Philippines' Philex Petroleum Corp jumped about ten times its listing price on Monday, and the company said it may sell shares or debt to raise funds for a natural gas exploration project in the South China Sea.
Philex Petroleum, a unit of the country's top miner Philex Mining Corp, surged to as much as 13 pesos (30.4 US cents) at its market debut before paring some of its gains to close nearly 617 percent higher against a listing price of 1.20 pesos.
It listed 1.7 billion common shares on the Philippine Stock Exchange by way of introduction, which does not require an initial public offering. About 35 percent of its shares had been distributed to shareholders prior to the listing.
The steep rise in Philex Petroleum's shares were typical of companies which listed by way of introduction as these firms list a small portion of their shares, and reflected strong market interest in mining and oil firms considered as defensive stocks, said Jose Vistan, research head at AB Capital Securities.
Parent Philex Mining, owned by Hong Kong-listed conglomerate First Pacific Co Ltd, was up 0.4 percent in a broader market that fell 1.2 percent.
"Our options are to offer shares depending on the market price or sell debt," Philex Petroleum chief operating officer Carlo Pablo said at a briefing after a listing ceremony.
Proceeds of the planned capital raising would fund the exploration of natural gas deposits it has previously discovered in the Sampaguita well in the Reed Bank in the South China Sea.
The Sampaguita project, to be developed over the next two years at an estimated cost of $80 million, involves further survey work, drilling of an appraisal well and possibly another exploratory well to prove the volume of deposits, said Philex chairman Manuel Pangilinan.
Philex Mining can provide as much as $20 million to finance the initial phases of the work programme, he said.
The Sampaguita prospect, covered by Service Contract 72 issued by the government, was initially found to contain 3.4 trillion cubic feet of natural gas.
London-listed Forum Energy Plc , which is 64 percent-owned by Philex Petroleum, has a 70 percent interest in Sampaguita. Monte Oro Resources and Energy Inc owns the balance of 30 percent.
The Reed Bank, which Manila calls the Recto Bank, is not part of the contested Spratlys group of islands in the South China Sea, Foreign Secretary Albert del Rosario said in July.
The Spratlys, believed to have huge oil and gas deposits and also considered a rich fishing ground, are claimed entirely by China, Taiwan, and Vietnam and in part by Malaysia, Brunei, and the Philippines.
Pangilinan said Philex was open to "commercial arrangements" to develop Sampaguita, as the group would not have enough finances to develop a gas field as large as Malampaya, the Philippines' biggest oil and natural gas project, located off southwestern Palawan province.
"That will cost several billions of dollars and you do have to get anyone of the big oil companies -- Chinese, or American or British -- to help out in the development," he said.
Philex Petroleum also has interests in exploration assets in Peru and Vietnam via Pitkin Petroleum Plc.
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