Trans-Asia mulls merging oil and gas exploration units

Posted at 11/28/12 7:57 AM

MANILA, Philippines - Listed Trans-Asia Oil and Energy Development Corp. is looking at merging its oil and gas exploration businesses into a single operating unit, Pythagoras L. Brion Jr., the company chief finance officer, told reporters on Tuesday.

The Trans-Asia official said the merger is in preparation of the planned public offering for the said operating units.

Brion said plans are under way for the listing of the oil and gas business, and that there are plans to spin off the oil and gas business into a single petroleum production company.

“That is in process right now, and the hope is that it can be listed at the right time,” Brion said.

Company president Francisco L. Viray said Trans-Asia will use the P1.63-billion proceeds from the stock offering to fund its 54-megawatt (MW) wind power project in Guimaras.

Part of the proceeds, he added, will be used to fund its bid for power assets owned by the government and to also fund the expansion of its 135-MW coal project, which they are developing with the Ayala Corp. Energy Holdings Inc. (ACEH).

South Luzon Therma, the joint venture between Trans-Asia and ACEH, targets to expand its 135-MW coal-fired power project by another 135 MW.

On Tuesday Trans-Asia offered 1,415,002,816 common shares to stockholders of record as of November 7, with an overallotment option for an additional 212,250,422 common shares. The offer price was placed at P1 per share.

Viray said Trans-Asia is also at opportunities in the privatization of the remaining assets and contracts of the Power Sector Assets and Liabilities Management Corp., namely, the Unified Leyte geothermal complex and the Casecnan hydropower plant.

He added that two assets, as well as pending projects in the pipeline, will get a chunk of the proceeds from this offering.

Trans-Asia is also pursuing wind energy projects that could generate a potential of 350 MW. It currently provides affordable power through its 52-MW power plant of Trans Asia Power Generation Corp. and its own 3.4-MW power plant in Guimaras.

Apart from power generation, Trans-Asia also holds a 6.103-percent interest in Service Contract 14 B-1 (North Matinloc) in northwest Palawan, which has produced more than 70,000 barrels of oil since February 2009.

Trans-Asia also owns a 22.5-percent stake in Service Contract 14 (Tara Production Area) in Northwest Palawan, 6.67-percent interest in SC 51 (East Visayas), 6.82 percent in SC 55 (West Palawan) and a 6 percent equity in SC 69 (Camotes Sea).

Trans-Asia's board earlier approved the change in primary purpose of one of its units—Trans-Asia (Karang-Besar) Petroleum Corp.—to oil and gas exploration and production instead of power generation. Trans-Asia plans to use Trans-Asia (Karang-Besar) as a dedicated oil and gas subsidiary.