BusinessWorld

Thursday, June 25, 2009 | MANILA, PHILIPPINES   S1/7 

Firm pulls out of exploration in

Cagayan

MONTE ORO Resources and Energy, Inc. has withdrawn from a farm-in, or exploration, agreement with a subsidiary of listed APC Group, Inc. in connection with Service Contract (SC) 48 located at the Cagayan basin in northeast Luzon.

The withdrawal from the deal signed in July 2007 by Monte Oro with Aragorn Power and Energy Corp., however, will still be subject to the approval of the Department of Energy.

Oscar C. Perez, explorations chief manager of Aragorn, said Monte Oro pulled out after determining the results of a gravity survey as "marginal."

"Based on their own parameters, they considered it as not worth pursuing," Mr. Perez said.

SC 48, which was awarded to Aragorn in February 2005, covers a total area of 748,000 hectares. Exploration resulted in a gas find near state-owned Philippine National Oil Corp.’s three-megawatt power plant.

Aragorn said it was expecting recommendations from its technical team on how to move forward with the SC 48 venture.

"The [survey] findings further suggest that unless further work is carried out, including the conduct of an expensive seismic survey (which may not be acceptable to the residents in the area), any well drilling at this stage is not warranted," APC added.

The Monte Oro group is owned by businessmen Walter W. Brown and Enrique K. Razon, Jr.

The biggest shareholder of APC is Belle Corp., holding a 47% interest. The SM Group is a major shareholder of Belle Corp.

APC has investments in energy-related projects, mining and manpower outsourcing, telecommunications and a cement project. APC shares went unchanged yesterday at P0.31 apiece. — Jose Bimbo F. Santos