Frontier Oil to use bulk of IPO proceeds for SC50 drilling
MANILA, Philippines - Oil and gas exploration firm Frontier Oil is eyeing gross proceeds of P2.2 billion, as it aims to list in the local bourse this year.
In its filing with the Securities and Exchange Commission (SEC) the company said, it will issue 883,626,000 new common shares based on a maximum offer price of P2.50 where in, PCCI and Unicapital are issue managers.
Net proceeds from the offer will be used for capital expenditure requirements particularly on development of service contracts it holds and new ventures.
Frontier Oil holds a diversified oil and gas exploration portfolio. It has interests and/or rights in four of the 23 active exploration Service Contracts in the country.
Bulk of the proceeds will be alloted for SC 50 in offshore Busuanga, Palawan. The company said granting it receives the projected proceeds based on its maximum offer price, P1.55 billion will be used to drill at the KJF oilfield.
Meanwhile, P276 million will be earmarked to partially finance tests at Nassipping 2 gas well located in SC 52 onshore Luzon.
Each zone will be tested separately in order to ascertain the specific flow rates from each section that will provide the basis for a gas-to-power project.