Frontier Oil eyes $50M from IPO

Posted at 06/27/12 8:16 AM

MANILA, Philippines - Upstream petroleum firm Frontier Oil Corp. (FOC) said it is planning to raise as much as $50 million in the local bourse through an initial public offering (IPO).

The local unit of Australia’s Frontier Gasfields Pty Ltd. is buying into several gas projects in the country prior to going public.

“FOC is currently finalizing the acquisition of a number of oil and gas projects in the Philippines ahead of a planned $30 to $50-million initial public offering (IPO) on the Philippine Stock Exchange,” Australia’s Bioprospect Ltd. said.

In a disclosure to the Australian Stock Exchange, Bioprospect said it sold 2.5 million shares or 50 percent of its stake in subsidiary Frontier Gasfields to FOC.

Bioprospect also cancelled its option to increase its shareholding in Frontier Gasfields to 75 percent.

FOC, in turn, will issue 430 million new common shares at a par value of P1 to Bioprospect.

“The exchange shares represent approximately 35 percent of the issued common stock of FOC on a pre-IPO basis,” Bioprospect said.

“Should the IPO raise the maximum targeted amount of $50 million, Bioprospect would hold approximately 13 percent of the issued common stock of FOC on a post-IPO basis,” it added.

There have been three IPOs in the local bourse so far: Farm inputs distributor Calata Corp.’s P270 million and East West Banking Corp.’s P5.2-billion share sale in May, and finacial conglomerate GT Capital Holdings Inc.’s P21.57-billion public offering in April.

FOC holds a 50-percent interest in Service Contract (SC) 52, an onshore oil and gas block located in the Cagayan Valley. It is also the project’s operator.

“FOC is currently in negotiations to acquire two additional oil exploration and appraisal projects in the Philippines,” Bioprospect said, adding that the discussions are in the advanced stage.

Furthermore, FOC plans to complete its purchase of the remaining 25 percent stake in Frontier Gasfields from minority shareholders.

“Upon the successful completion of those agreements, FOC will own 100 percent of the issued capital of Frontier Gasfields,” Bioprospect said.

Aside from SC 52, Frontier Gasfields holds a 15-percent stake in the SC 69 offshore block within the Visayan Basin and it has the option to acquire a five-percent share in the 9,880-square kilometer SC 55 located in offshore Palawan.

In February, the SC 52 consortium started the $5-million Nassiping-2 oil exploration project in Cagayan Valley.

SC 52 covers 96,000 hectares in Piat-San Jose in northern Cagayan Valley. The Nassiping-2 is an existing well containing a previously discovered but untested gas discovery. It was drilled in 1984 and penetrated a substantial, gas-bearing limestone section but was not flow-tested.