Manuel V. Pangilinan-led PXP Energy Corporation is confronting a difficult financial reality: its petroleum revenues are growing, but the company is still losing money as rising financing costs, a weaker Philippine peso and declining production from a mature oil field weigh on its performance.
The Philippine Stock Exchange-listed oil and gas exploration company reported a ₱40.7-million consolidated net loss for the first nine months of 2026, slightly wider than the ₱39.8-million loss recorded during the same period last year.
Yet beneath that headline, the company’s core operations showed some improvement.
Petroleum revenues climbed 26.9% to ₱63.9 million, supported by a larger participating interest in the Galoc oil field off Northwest Palawan and moderately higher crude selling prices.
PXP’s core net loss also narrowed to ₱30.9 million from ₱32.8 million.
The problem was that financial expenses outweighed those gains.
Net foreign-exchange losses increased sharply as the peso weakened against the US dollar, while interest expenses also rose.
According to Bilyonaryo’s October 30 report, the results come as PXP prepares for a major transition: the Galoc oil field, its principal producing asset, is approaching the end of its productive life.
The company is therefore looking toward new exploration opportunities in Northwest Palawan and the Sulu Sea while maintaining interests in West Philippine Sea petroleum projects that remain suspended.
For PXP, the challenge is no longer simply improving oil revenues. It is finding a commercially viable source of future production before its existing oil business declines further.
PXP Energy’s Nine-Month Loss Widens Despite Stronger Oil Revenue
PXP recorded a consolidated net loss of ₱40.7 million for January through September 2026, compared with ₱39.8 million a year earlier.
The increase represents a modest deterioration in the company’s reported financial position.
The loss attributable specifically to shareholders of the parent company rose from ₱37.9 million to ₱39.5 million.
But its core net loss, which excludes certain nonrecurring items, narrowed to ₱30.9 million from ₱32.8 million.
This distinction is important.
The company’s underlying operating performance showed improvement, even though its final consolidated results remained negative.
Petroleum revenues increased from ₱50.3 million to ₱63.9 million.
That revenue growth was primarily associated with a larger share of production from the Galoc field, rather than a substantial increase in the field’s total output.
The contrasting figures reveal how an energy company’s financial performance can improve in one area while deteriorating in another.
Why Revenue Increased 26.9% Even as Oil Shipments Declined
One of the most striking features of PXP’s latest results is that revenue rose despite a decline in oil liftings.
During the first nine months of 2026, the Galoc field recorded two oil liftings totaling 364,788 barrels.
That was 11.9% lower than the 414,124 barrels lifted through three cargoes in the comparable period last year.
However, PXP’s effective participating interest in Galoc increased from 3.21% to 4.69% in December 2025.
The higher ownership interest meant that the company was entitled to a larger share of the field’s petroleum economics.
At the same time, the average realized crude price increased 2.3% to $72.13 per barrel from approximately $70.48 a year earlier.
These two developments helped lift reported revenue despite weaker overall field volumes.
Crucially, the 364,788 barrels represent oil liftings from the Galoc operation, not barrels wholly owned or independently produced by PXP.
The company’s economic exposure is determined by its participating interest and the applicable contractual arrangements.
A Weak Peso Turns Into an Earnings Problem
Foreign-exchange movements were among the biggest reasons PXP’s consolidated financial performance deteriorated.
The company reported a net foreign-exchange loss of ₱8.6 million, compared with ₱1.2 million a year earlier.
According to Daily Tribune, the increase was largely associated with unrealized exchange losses on US dollar-denominated liabilities.
When the Philippine peso depreciates, the peso value of a company’s dollar-denominated obligations can increase.
That can generate accounting losses even when the underlying debt amount in dollars has not changed.
The effect is especially relevant to companies that generate income or carry liabilities in different currencies.
PXP’s net interest expense also increased to ₱7.1 million from ₱4.9 million.
Together, higher financing and foreign-exchange costs reduced the benefit of stronger petroleum revenue.
This illustrates why energy-sector investors must consider more than crude oil prices.
Currency exposure and financing arrangements can materially affect earnings.
Petroleum Production Costs Increase as Galoc Stake Expands
PXP’s higher participating interest in Galoc also affected its expenses.
Petroleum production costs rose to ₱48.7 million from ₱40.7 million.
The increase partly reflected the company’s larger share of the field’s operating costs.
Meanwhile, general and administrative expenses declined to ₱40.1 million from ₱43.6 million.
The company benefited from the absence of certain expenses recorded during the previous year.
The cost figures suggest that management has achieved some savings in administrative operations.
However, reducing overhead alone may not be enough to restore profitability.
The company faces a larger structural challenge because its principal producing field is mature.
As production declines, maintaining sufficient revenue to cover operating, administrative and financing expenses becomes increasingly difficult.
Galoc Oil Field Is Approaching the End of Its Productive Life
The Galoc field is located offshore Northwest Palawan.
It has been an important producing asset for PXP’s petroleum business.
But the field is now in a late stage of its productive life.
Oil reservoirs generally experience declining production over time as recoverable resources are extracted.
Operators may attempt to extend the useful life of mature fields through technical improvements, maintenance and additional investment.
However, such measures depend on the remaining resources and economic viability of continued operations.
PXP’s management has acknowledged that Galoc is approaching the end of field life.
That means the company needs to identify replacement opportunities if it wants to maintain a meaningful upstream production business.
The challenge is particularly difficult because petroleum exploration is capital-intensive and uncertain.
Even promising discoveries may require years of evaluation and development before generating commercial revenue.
Service Contract 88 Provides a Framework for Continued Galoc Operations
Galoc’s previous operating arrangement was succeeded by Service Contract 88.
The Department of Energy executed SC 88 in December 2025, allowing the consortium to continue petroleum operations and seek to maximize recovery from the field.
The contract covers an offshore area of approximately 83,450 hectares in the Northwest Palawan Basin.
The participating consortium includes NPG Pty. Ltd. as operator, The Philodrill Corporation and Forum Energy Philippines Corporation.
The contract provides an operating framework.
However, it does not guarantee additional commercial reserves or prevent the natural decline of the field.
For PXP, the immediate priority is to manage the remaining value of Galoc while preparing other assets for possible future development.
New Palawan Oil Project Offers a Possible Replacement
One of PXP’s more important recent developments is its participation in Service Contract 91.
The contract covers the Cadlao area in the Northwest Palawan Basin.
It was awarded in April 2026 to a consortium involving Forum Energy Philippines Corporation, Nido Petroleum Philippines, The Philodrill Corporation, Oriental Petroleum and other partners.
The project has been associated with approximately 6.2 million barrels of estimated contingent oil resources.
These resources could provide a potential development opportunity.
But contingent resources are not the same as proven producing reserves.
They represent quantities estimated to be potentially recoverable from known accumulations, subject to additional technical, commercial or other conditions.
The existence of such resources does not establish that oil production will commence on a particular date.
Nor does it guarantee that the project will generate enough revenue to offset Galoc’s decline.
The consortium must complete the relevant work program, evaluate commercial viability and obtain the necessary approvals before any development can proceed.
Sulu Sea Exploration Could Shape PXP’s Long-Term Future
PXP is also pursuing exploration opportunities under Service Contracts 80 and 81 in the Sulu Sea.
The projects are operated by Tetragon Energy Limited.
A seismic reprocessing contract worth approximately $1.45 million was awarded to DUG Technology Limited.
The program covers more than 4,000 square kilometers of three-dimensional seismic data and up to 3,000 line-kilometers of two-dimensional data.
Seismic processing helps geologists and petroleum engineers evaluate subsurface formations that may contain oil or natural gas.
According to the company’s disclosed plans, initial results are expected in the first quarter of 2027.
The final processed datasets are targeted for the third quarter of 2027.
These milestones could help determine which exploration prospects deserve further technical investigation.
However, seismic data alone cannot establish the presence of commercially recoverable hydrocarbons.
Drilling and additional evaluation are generally required before a discovery can be confirmed and developed.
Halcon Prospect Generates Interest, but Commerciality Remains Unproven
Within SC 80, the Halcon prospect has attracted attention following an updated assessment of prospective resources.
In September 2026, Tetragon Energy reported an increase in estimated prospective resources for the exploration prospect.
PXP holds a 12.5% participating interest in SC 80.
The update may strengthen interest in the area’s exploration potential.
But prospective resources represent estimated quantities associated with undiscovered accumulations.
They should not be described as proven oil reserves or guaranteed future production.
The company must still evaluate the geological findings, financing requirements and appropriate next steps.
For investors, the Halcon update represents exploration potential rather than immediate earnings.
That distinction is especially important while PXP continues reporting consolidated losses.
Reed Bank Remains a Major Opportunity Blocked by Geopolitics
PXP’s portfolio includes one of the Philippines’ most strategically significant petroleum exploration areas.
Through Forum Energy, it holds an interest in Service Contract 72 covering Reed Bank, also known as Recto Bank, west of Palawan.
The area has attracted attention because of its potential natural gas resources.
However, exploration activities remain suspended under force majeure.
The suspension is tied to security and geopolitical conditions in the West Philippine Sea, where the Philippines and China continue to have competing maritime positions.
The 2016 South China Sea arbitral tribunal ruled on aspects of maritime rights under the United Nations Convention on the Law of the Sea.
China rejects the ruling.
The unresolved tensions have complicated exploration activities in areas claimed by Manila as part of its exclusive economic zone.
For PXP, this means that an important part of its petroleum portfolio remains unavailable for ordinary exploration and development.
West Philippine Sea Tensions Carry Direct Economic Consequences
The prolonged suspension of exploration in disputed waters illustrates the economic dimension of maritime security.
The issue is not limited to naval vessels, coast guard encounters and diplomatic statements.
It can also affect investment decisions involving potential energy resources.
WWC ONE MEDIA previously examined tensions involving Philippine maritime security in Teodoro Warns China: Forcibly Towing BRP Sierra Madre Could Trigger an Act of War — What Happens Next?.
That report focused on Defense Secretary Gilberto Teodoro Jr.’s warning about the possible consequences of forcibly removing the BRP Sierra Madre from Ayungin Shoal.
The incident discussed in that report is separate from PXP’s petroleum contracts.
Nevertheless, both involve the wider strategic environment affecting Philippine interests in the West Philippine Sea.
For energy exploration companies, unresolved maritime tensions may increase uncertainty surrounding project schedules and capital allocation.
Another WWC Report Highlights the Continuing Philippines–China Dispute
The diplomatic disagreements between Manila and Beijing have also intensified during international defense discussions.
WWC ONE MEDIA reported on one exchange in China Fires Back at Teodoro: “Cut the Provocations and Theatrics” — But What Happens Next in the West Philippine Sea?.
The article examined China’s response to statements made by Philippine defense officials during a conference in Seoul.
The confrontation was not a direct announcement about SC 72 or SC 75.
However, it demonstrates the broader political tensions that make petroleum exploration in disputed areas particularly complicated.
PXP’s management cannot independently resolve those geopolitical disagreements.
The company’s future activities in affected contracts will depend on government decisions, security conditions and the applicable petroleum regulations.
Why Philippine Energy Security Makes New Exploration Important
The Philippines relies heavily on imported energy resources.
That exposure creates risks when international oil and gas prices rise or supply chains are disrupted.
Domestic petroleum discoveries could potentially help diversify energy supplies and reduce some import dependence.
However, any benefit depends on the quantity of commercially recoverable resources, development costs and the time needed to bring a project into production.
WWC ONE MEDIA previously examined broader energy-price pressure in Philippines Faces Broader, Stickier Inflation Wave as Food, Fuel and Labor Costs Rise.
The report discussed how fuel costs can contribute to inflation and raise expenses for businesses and households.
PXP’s exploration activities are relevant to the longer-term question of domestic energy supply.
But even a successful discovery would not automatically reduce gasoline prices or immediately shield consumers from global oil-market movements.
Petroleum production, refining, import arrangements and retail pricing involve different parts of the energy supply chain.
A New Discovery Would Not Guarantee Lower Electricity Bills
Energy security is also closely connected to electricity affordability.
Higher imported fuel costs can affect generating companies and, depending on contractual arrangements, ultimately influence electricity prices.
WWC ONE MEDIA examined supply problems in Visayas–Mindanao Power Shortage Faces Senate Probe as Electricity Rates Surge.
That report discussed regional power shortages and significant differences in wholesale electricity prices.
PXP is an upstream petroleum exploration and production company rather than a major electricity distributor.
Its projects should therefore not be presented as an immediate solution to regional electricity shortages.
The connection is longer-term.
A successful domestic oil or gas development could contribute to the country’s energy-resource base, but its effects on consumers would depend on where the fuel is used, commercial arrangements and infrastructure.
Semirara’s Challenges Show That Domestic Energy Assets Also Face Decline
PXP is not the only Philippine energy company confronting the limits of existing resource production.
WWC ONE MEDIA previously reported on operational difficulties at Semirara Mining and Power Corporation in Semirara Coal Output Falls 55% as NASECORE Warns of Higher Electricity Bills — But the Real Test Comes in July 2027.
The companies operate in different sectors.
Semirara produces coal and generates electricity, while PXP focuses on petroleum exploration and production.
The comparison is therefore not about identical business models.
It illustrates a common challenge: resource producers must manage declining output, operating costs and the need for future development opportunities.
For PXP, that challenge is particularly acute because Galoc remains its principal producing asset.
PXP’s Financial Position Raises Questions About Future Funding
The company’s balance sheet also deserves attention.
According to figures summarized from its September 2026 disclosure, PXP reported approximately ₱3.38 billion in total assets.
Cash stood at around ₱35.9 million, compared with approximately ₱40.1 million at the end of 2025.
Notes payable increased to approximately ₱175.4 million from ₱105.8 million.
Total equity was approximately ₱2.75 billion.
These figures do not establish that PXP is insolvent.
But they show why management is considering financing options and potential partnerships.
Exploration programs can require substantial capital well before they generate revenue.
For a company reporting recurring losses, financial flexibility is particularly important.
The company must decide which projects justify additional spending and how those projects should be funded.
What Investors Should Watch in 2027
Several developments could shape PXP’s outlook.
The first is Galoc’s remaining production and operating performance.
A faster decline in field output could place additional pressure on petroleum revenue.
The second is the company’s exposure to the peso and financing costs.
Foreign-exchange and interest charges were important contributors to the wider nine-month loss.
The third is progress at SC 91.
Investors will want evidence that the Cadlao project is advancing toward a commercially viable development plan.
The fourth is the seismic work under SC 80 and SC 81.
Initial results expected in the first quarter of 2027 could help guide future exploration decisions.
Finally, any change in the force majeure status of SC 72 and SC 75 would be significant.
But until a formal announcement is made, the resumption of those projects should not be treated as certain.
The Bigger Question: Can PXP Find a Future Beyond Galoc?
PXP’s latest results reveal why petroleum exploration can be a difficult business even when crude prices are favorable.
The company generated higher revenues and reduced its core loss.
Yet its consolidated loss increased because of currency and financing pressures.
At the same time, its main producing asset is approaching the end of its commercial life.
That leaves the company facing a difficult transition.
Potential projects in Northwest Palawan and the Sulu Sea could eventually provide new development opportunities.
However, exploration prospects carry geological, financial and regulatory uncertainty.
Other projects remain affected by geopolitical tensions.
Management must therefore balance preserving cash with pursuing the investment needed to establish a new source of earnings.
The Bottom Line
PXP Energy Corporation reported a ₱40.7-million consolidated net loss during the first nine months of 2026, compared with ₱39.8 million a year earlier.
Petroleum revenues rose 26.9% to ₱63.9 million, supported by a higher participating interest in the Galoc field and stronger realized crude prices.
Its core net loss narrowed to ₱30.9 million.
But higher foreign-exchange and interest expenses pushed the consolidated result further into negative territory.
With Galoc approaching the end of its productive life, PXP is pursuing opportunities in Northwest Palawan and the Sulu Sea while maintaining interests in West Philippine Sea projects that remain suspended.
The company has potential exploration opportunities, but none of the new projects can yet be treated as a guaranteed replacement for Galoc’s production.
As Pangilinan-led PXP Energy searches for its next source of oil and gas revenue, one question now stands out: Can new discoveries and strategic partnerships transform the struggling exploration company — or will declining production, financing costs and geopolitical barriers keep its recovery out of reach?
