petroenergy-sec-17-q-2nd-quarter-2013-

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108142013003067

SECURITIES AND EXCHANGE COMMISSION SECBurlding, EDSA,Greenhills,MandaluyongCity,Metro[/anila,Philippines Tel:(632)726-0931 to 39 Fax:(632) 725-5293 Email: mis@sec.gov.ph

Barcode Page

The following document has been received:

Receiving Officer/Encoder : Fernando T. Fernandez Receiving Branch : SEC Head Office Receipt Date and Time : August 14, 2013 03:08:11 PM Received From

: Head Office

Company Representative

Doc Source Company Information SEC Registration No.

AS94008880

Com pany Name

PETROENERGY RESOURCES CORP.

Industry Classification Company Type

Stock Corporation

Document lnformation Document lD

10814201 3003067

Document Type Document Code

17-O (FORM 11-Q:QUARTERLY REPORT/FS) 17-Q

Period Covered

June 30, 2013

No. of Days Late

0

Department

CFD

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COVER SHEET

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Arlended Articles Number/Section Total Amount

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SECURITIES AND EXCHANGE COMMISSION SEC FORM I7-Q

QUARTERLY REPORT PURSUANT TO SECTION I1 OF THE SECURITIES REGULATION CODE (SRC) AND SRC RULE l7(a)-t(b) (2) THEREUNDER

30 June 20

l3

For the quarterly period ended 2.

sEC Identification Number

3'

A5094-0088803.

!9!€netsylgolEg{glpotult=on,,, Exact name of registrant as

specified in its

BIR Tax Identificarion No. 004-471-419-000

chartel =

4.

(SEC Use Only)

5.

Industry Classification Code:

of incorporation 6.

7s Floor JMT Address of principal office

ADB A

7.

632) 637-2917 Registrant's telephone number, including area code

8.

Securities registered pursuant to Sections 4 and 8 ofthe SRC

Title of Each Class

Common (par value of

Pl

1605

Postal Code

Number of Shares of Common Stock Outstanding .0O/share)

273,824,220 Amount of Debt Outstanding = 11O*t

9.

10.

Are any or all ofthe securities listed on the philippine Stock Exchange?

All issued and outstanding cor non shares are listed in the philippine Stock Exchange.

Indicate by check mark whether the registrant:

a.

has filed all reports required to be filed by Section

l1 ofthe Securities Regulation Code(SRC) and SRC Rule I l(a)-l thereunder and Sections 26 and l4l ofthe Corporation Code ofthe philippines, during the preceding l2 months (or for such shorter period the registrant was required to file such

reports)

yes [4

b.

has been subject to such

Yes [/ ]

filing requirements for the past 90

days

TABLE OF CONTENTS

PART

A)

I

FINANCIAL INFORMATION

Management Discussion and Analysis of Financial Condition and Results Operations

l. Financial Condition

-

2. Results ofOperations

of

June 30, 2013 and June 30,2012 - For the quarter ended June 30, 2013 and June 30,2012 June 30, 2013 and December 3l ,2012

Financial Condition Discussion oflndicators ofthe Company's Level ofperformance 5. Disclosure in view of the cunent global financial crisis.

3.

4.

B)

Results and Plan of Operations

PARTII OTHER INFORMATION SECTION A - FINANCIAL STATEMENTS

l.

Consolidated Statements of Financial Condition As ofJune 30, 2013, June 30, 2012 and, December 31, 2012

2. Consolidated Statements of Income For the quarter ended June 30,2013 and June 30,2012 3. Consolidated Statement ofChanges in Equity As ofJune 30,2013, June 30, 2012 and December 3 l, 2012 4. Consolidated Statement ofCash flows As ofJune 30,2013, June 30,2012 and December

3l,2Ol2

5. Schedule ofAccounts Receivable

6.

Notes to Financial Statements

Page 2

PERC SEC- | 7Q 2"" Quarter 201

3

PART

I.

FINANCIAL INFORMATION

A.) MANAGEMENT DISCUSS-ION AND ANALYSIS OF CONSOLIDATED FINANCIAL coNDrrroNs AND RESULTs oF oppi;ir-i;ll;" "

l.

Consolidated Financial Condition (June 30,2013 and June 30,2012) As of June 30 (Unaudited) 2013

ASSETS Cash and cash equivalents

$1t,441.420

Financial assets at fair value through profit

and loss (FVpL) Receivables

$20,2s2,287

140,465

Crude oil inventory Advances, prepaid expenses and other current

7o Change

20t2

|,900,252

r$02,746

387,345

7,E00,514

6,943,214

in Total

Assets

-43.51yo

12s,450

2,216,976

%o

n.48%

1

l.9lyo

0.14yo

|

6.67yo

2.22%

158.88%

t.0lyo

assets

Property, plant and equipment_net Deferred oil exploration cost

Deferred tax assets-net

12.3syo

65,945,949

7.83%

32,826,429

100.89yo

66.l9Yo

8,637,126

6,455,502

33.79%

8.67yo

t00.00%

0.00yo

r03,9 t 0

Investment properties-net

3t,417

Advances and other non_current assets

3

Accounts payable and accrued expenses Dividends payable

0.00%

0.03%

,3 t 8.373

84.74yo

2.44yo

$70,344,179

41.66%

| 0O.00%"

.ljyo

2.490/0

|

2,478,733

$l ,577,772

244,262

915,677

-7332%

r65,612

0.25%

228,259

-27 .45yo

0.l'Jo/o

48,27O,082

23,843,793

t02.44%

48.44%

39,1l3

4t,862

-6.57yo

0.04Vo

256,O87

516,524

-50.42%

0.26yo

123 887

90.00%

5l.72Yo

4l.lsyo

Income tax payable Loans payable

Accrued retirement liability Asset retirement obligation

,417

r

TOTAL ASSETS LIABILITIES AND EQUITY

-

Deferred tax liabilities

lll

TOTAL LIAB!LITIES EQUITY

57

0.08yo

Attributable to equity holders ofthe parent

Company

Noncontro

41,008,406

39,016,01I

5.tt%

7,1o7,759

4,204.281

69.06yo

interest

TOTALEOUITY ToTAL LIABILITIEilTbE UITY

I | 6.165

$99

r65

U.33% $70,344.t79

4l

.660/0

7

.l3yo

48.28Y" 100.000/0

Note: Diferences in amounts are due to rounding ofl.

I:#ffiT

amounted

to $99.652 million and $70.344 mirion as of

June 30, 2013 and June 30,2012,

cash and cash equivalents consist of cash on hand, cash in^banks_and maturities of not more than three months. y,11e1 The qz.stih;iia""rease from

ryrtet

placements with original

us$i0.252n,,iition u, of

to US$lt'44r million as of June 30,201t

June 30,2012 i; ;;;;;'dr. t".paymenrs made for progress bilings for the ceothermal P"*.; Pi;;'t rioto; and deveropment .iprnr", in for the Etame ;il'#iifll"JffiMaibarara

Page 3

PERC SEC-17Q 2no Quarrer 2013

Financial assets at fair value through profit and loss (FVpL) amounted to us$o.140 million and us$0.125 as of June 30, 2013 ay io!' respectively. The ll.97vo net increase in this account is due to the

million

positive changes in the market prices of the Company;s investments in stocks.

Receivables arise mainly from PERC's share in the proceeds on lifting/sales. The 16.67%oincrease in this account is mainly due to higher number of barrels liftid and remained ,i.olrr"tJ una higher crude oil price from l8'092 barrels (lifting i?8 &.)?g) at $100.46 pribur..t. to2t,2t2barrets (tifting 143 144)at $103.14 per barrels as ofJune 30, 2012 and,2013, respectively.

&

crude oil inventory pertains to PERC's share in the

ending inventory

as of the 2nd quarter. This .EMp amounted to uS$l'003 million and us$0.387 million at the end of Ju-ne 30,20i3 una zotz,respectively. The 158'88% increase is due to higher number of barrels left unsold at a higher crude oil pnce per barrel from 3,g73

barrels at us$100 per barreis respectively.

to 9,722 barrels at us$10g.34 periarels u, of'.lun. 30, 2012 and 2013,

Advances, prepaid expenses and other current assets consist of short-term investments (money market of more than three months but less than one year), uiu-.". to contractor, deferred financing costs, vAT credit charges, prepaid insurance, suppties inventory, refundable deposits, and other pfepayments' This account amounted to US$7.801 million and us$6.g43 miliion as of June 30, 2013 and 2012, respectively' The 1235% net increase is due to additions to short-term placement with maturities

investments, advances to contractors, vat

credits and other prepayments.

Property' plant and equipment (PPE) amounted to US$65.946 million and us$32.g26 million as of June 30, 2013 and 2012, respectively. The 100.89% net increase in this account is mainly due to progress on the construction of MGPP and Fluid collection and Reinjection System (FCRS) ani additions to welts and platforms- Gabon.

Deferred oil exploration cost amounted to US$8.637 million and us$6.456 million as of June 30,2013 and The

'rr3s'iffiit*ly'

33j9% increase is due to continuous exploration and development acriviries in Gabon,

Deferred

tax assets/ (liabilities) (DTA/L) occurs due to timing_differences in recognizing temporary deductible expenses and temporary taxable revenues such as accrued pr#t ,nura, u"araaon !*'p*r"a, accrued

retirement liability, provision for probable and change in crude oil inventory. Apparenly, the company has ^losses us$0'104 million DTA in June 2012 compared toi-ls$o.osz million DTL in lu""'zoii.

The change is mainty accounted as increase in crude oil inventory.

lnvestment properties remained unchanged

as

ofJune 30, 20 13.

Advances and other non'current assets consists of the non-curent portion of advance rent, advances to contractors, restricted cash and deferred financing costs.

The 84.74% iet addition in zot: i, mainly due to advance rental payment made in the lease ugr"r,i.nt. on Rpril 23,2012, the company entered into a Land Lease Agreement (LLA or the Agreement) w]th the National power Corporation 0.lFCl unO the power Sector Assets and Liabilities Management Corporation (psALM) over the vcpp,s steam-field lot in Sto. Tomas, Batangas' Under the LLA, the company will lease the steam-field lot for a period of25 years, extendable for another 25 years upon mutual agreement of the parties.

Accounts payable and accrued expenses amounted to uS$ 2.479 million and us$1.57g million as of June 30, 2012, respec^tively payable to suppliers and contractor; interest on loan; and i.0,i1 119 -l:.::3:t.in other accruals account for the 57 .10%o change in this account. "*.""r "r

Dividends payable amounted

to US$0.244 and US$0.916 million as of June 30,2013 and 2012, respectively.

Balances mainly pertain to unclaimed dividends.

The 73.32% decline in this aciounr is mainly attributable to June 2012 declaration of l0% dividends, none as ofJune 2013.

Income tax payable decreased by 27.450/0 fuom US$0.22g

2013, respectively due to lower taxable income.

Page 4

to

uS$O.166 million as ofJune 30, 2012 and

PERC SEC-I7Q

2no

Quarter 2013

Loans payable pertains to the uS$54.7 million loan facility availed by MCI from RCBC and Bpl to finance the construction of 20 MW MGPP' As of June 30, 2013 and 2012, total drawao*n, u,n*nt.a to $4g.270 million and $23'844 million' respectively' The 102.44i/o in"r.*"-in this account is due to additional drawdowns made.

Accrued retirement liabiliry amounted to

US$0.039 million and US$0.042 million as of June 2012, respectivery. The 6.57o/o decline pertains to uaaitionur funding/payment of retirement fund,

30, 2013 and

Asset Retirement obligation amounted to uS$0.256 million and us$0.5 l7 million as of June 30, 2013 and 2012' respectively ' The 50'42vo reduction resulted from ih. .r,ung. in estimated ubundon,n.nt costs llom $1.54 million in 201I to $0'87 million in 2012 (PERCixh*. to the total accrued retirement obligation of the

:i?:][]T)C.ffi?,]}i"_H:provided

by a third parry experr, as engaged by rhe consortium oferator of rhe

Equity attributable to equity holders of the Parent company amounted to US$ 41.008 million or us$'.l s0

book value per share and uS$39.0l6 million or uoor. uulu.

3

0, 20 | 2, respectively.

p.,

share of US$0.I42 as ofJune 30, 2013 and June

Non-controlling interest pertains to the 25%o share of rrans-Asia oil and Energy Development corporation (Trans-Asia) and the l0% share of Philippine National oii corporation R"n.ru-bt. Corporarion (pNoc-Rc) in Maibarara Geothermal, Inc (MGI).

Page 5

PERC SEC-l7Q

Zno

Quarter 2013

2.

Consolidated Results of Operations (For the quarter ending June 30,2013 and June 30r 2012)

For the 2nd Quarter

Ending

30-Jun-13 J0-Jun-12 OIL REVENUES

$3,360,556

COST OF SALES Oil production operating expenses

I,360,609

^Kevenues

26.22%

$2,662,391

"/o in Total

106.01%

1,049,678 29.62%

42.92%

.97o/o

58 .27Yo

2t.93%

47 .74vo

25-89%

24.35%

486,665 371,s84 tr921%---

Depletion

| ,847

GROSS

"/" change

TNCOME

'27

4

| ,421

,262

r,sr3,282

1,24t,t29

711 798

613.089

29

GENERAL AND ADMINISTRATIVE EXPENSES

OTHER INCOME (CHARGES)

51,509 (230,832)

lnterest income

Net unrealized foreign exchange gain Net unrealized gain (loss) on fair value changes on financial assets at FVPL Accretion exDense Miscellaneous income (charses)

110,213 127,699

-53.26%

-280.76%

l.62Yo

-7.28%

(2,143) 207.09% -0.2lyo (16,330) -43.60% -0.29Vo 1,770 158.08o/o 0.14%o (190,546) Z2\2Og -186.14% -6!% (6'581) (9,210) 4'568

INCOME BEFORE INCOME TAX

550,938

849,249

-35.13%

17.38%

PROVISION FOR INCOME TAX

393.74s

267.441

47 .23o/o

12.42%

$157.r 93

$581.808

$329,248

s622.063 -47.07%

$157.194

$581,808

NET INCOME NET INCOME (LOSS) ATTRIBUTABLE TO: Equity Holders of the Parent Company Noncontrolling

(172,054) (40,255) 327.41%

interest

NET INCOME EARNINGS PER SHARE(EPS) FOR NET INCOME ATTRIBUTABLE TO EQUITY HOLDERS OF THE PAR"ENT COMPANY. BASIC AND DILUTED

-72.98%

$0.0012 50.0023

-72.98'A

4.96%

10.39% -5.43% 4.96Yo

4'l.07Yo

Note: Dffirences in amounts are due to rounding off,

The Company generated net income attributable to equity holders of the Parent Company amounting to US$0.329 million or US$0.0012 EPS and US$0.622 million or US$0.0023 EPS for the 2nd quarter ending June 30,2013 and 2012, respectively. revenues of US$3.361 million and US$2.662 million for the 2nd quarter ending June 30,2013 and 20112, respectively. The 26.22Vo increase is due to higher share in barrels produced from 27,164 banels at USD 105.50 per barrel to 32,458 barels at USDI02.74 per barrel for the quarter June 20 1 2 and 20 l 3, respectively.

The Company generated total

oil

expenses increased by 29.62% from US$1.050 million to US$1.361 million in the 2nd quarter 2013 and 2012, respectively due to well work-overs of well EAVOM 2H and ETBSM lH.

Oil Production operating

Page 6

PERC SEC-I7Q 2"d guarter 2013

Depfetion irmounted to us$0'487 million and us$0.372

The 30'97% increase is due to higtrer

ff*.,ffi.:?i:il[,:"":t'transrer

oepletion;";;;

glliT-!,

2nd quarter 2013 and 2012, respectively. us$ 7.79 per banel i" usoro.sr per barret. Higher

orderenJ""'L'ieevorta :u

n.".ropr";;;;il,"

ppE

-welrs which is

Generaf and administrative expenses increased by 25.89%primarily due to the expenses incurred for the

geothermal and wind projects.

other income (charges) amounted to (uS$0. 191) million and us$0.221 million for i, au. to ," ro owing net effects:

2012, respectively. The 1g6.14%net decline

o

53

rhe 2,," quarter 2013 and

26% net decrease in interest income due to the company's decline in reinvestment fund due to of obligations from EMP expansion; progress payments for the MGpp construction; payments for other expenditures; and lower intercst rates i.e. for MCI average interest rates in 2012 ranges liom settlement

4.5%o as compared to

2013

rates

of 2.ggo/o to

o

280'76%o decline in net realized gain on forex changes

c

207 '09%o increase

l.qil";-'

liom us$O.12g million gain in 2012 tous$0.231 million loss in 2013, this resulted because, in oiarter20l2, peso strengthen;d from March 31,2012 closing ofP42'92:lUS$ to P42.12:lus$ ln runJ':0, zotz whire in quarrer 2013, peso weakened from -March 31,2013 crosing of p40.80:luS$ to p43.20:rus$ in June 30, idii,

in net unrealized lossin changes in market values of investments in stocks traded in the PSE due to decline in market ualues of inuertrientr; o 43 '60%o decline in accretion expense resulting from the change in abandonment cost estrmate as discussed above in the asset retirement obligation; ani

o I58'08%

increase in miscellaneoui in.or" which consists mainly 2013 higher rates of dividends are received from P1.58/shar

Aboitiz and

p I .656/share

e

of Seacem.

of dividend income, for the quarter

in

2012

to pi.ootshare in 2013

Provision for income tax amounted to us$0.3g4 million and us$0.267 million ror the

2012, respectively. The 47.23"/onet increase ir

Non-controlling interest pertains to the Geothermal, Inc (MGI).

25%o

or. rrid., tu*able

share of Trans-Asia and the I 0% share of

Page 7

2nd quarter

income as of June 30, 2013.

from

20r3

and

pNoc-RC in Maibarara

PERC SEC- | 7Q 2"d Quarter 201 3

3. Financial Condition (June 30, 2013 and December 31, 2012)

Unaudited

Audited

30-Jun-13

3l-Dec-12

ASSETS Cash and cash equivalents

slt,44l,42O

Financial a.ssets at fair value through profit and loss (FVPL) Receivables Crude

Advances, prepaid expenses and other current assets

Property and equipment-net Deferred oil exploration cost

2,,216,976

t42,827 |,982,027

r,002,7 46

4t4,764

2.22Vo

l4l

.76yo

| .OlYo

20.t&yo

7.83%

28.l6yo

66.l80/o

30.0r%

8.67yo

$99

2,479,733

146,806

-l0O.00yo

0.00%

t,4 t7 2.s22.942

0.OOo/o

o.03yo

-3.46%

2.44o/o

9t,452.765

8.97%

100.00%

-47.73%

2.49Yo

3

s4,742,267

244,262

260,098

-6.09%

0.25Yo

r6s,,612

75,0 t 5

120.17yo

0.170/o

4E,270,082

38,943,444

23.95yo

48,44Vo

39,1l3

78,75s

-50.34%

O.04Yo

256,,087

237,668

lncome tax payable Accrued retirement Iiability

O.l4o/o

6,490,701

Advances and other non-currenr assels

Loans payable

-l .65yo | | .85yo

5l ,455,856 6,643,203

31,417

Accounts payable and accrued expenses Dividends payable

| | .48o/o

65,945,949

Investment properties-net

TOTAL ASSETS LIABILTTIES AND EQUITY

47.Otyo

7,800,514

8,637,126

Deferred tax assets-net

7rl in Total Assets

$2r,622,222

r40,465

oil inventory

Vo Change

Asset retirement obligation

Defened tax liabilities

ll

IqTAL LIABILITIES

|

EQUITY

7.75%

0.26vo

0.00%

0.08o/o

6.24yo

5 | .720/0

Attributable to equity holclers of the parent Company

41,008,406

Noncontrolling interest

TOTAL EQUITY TOTAL LIABILITIES AND Total

UIIY

,308,I 39

-0.73o/o

41.t5%

5,807,379

2239%

7.t3%

t6.165

47.1 15.5 | 8

2.l2Vo 8.97%

48.28% 100.00%

$99.652.165

assets amounted to US$99'652 million and $91.453

respectively.

4t

7,107.759

million

$91.452.765

as of June 30, 2013 and December 31,2012,

cash and cash equivalents consist of cash on hand, cash in !a$s and money market placements with original maturities of not more than three months. The 47,0g% net decline from SZi.dZZ million as of December 31, 2012 to $l l'441 million as of June 30,2013 is mainty due to the pro$ess payments made for the MGpp and development expenses in for the Etame Expansion in CaUon. Financial assets at fair value thro-ugh profit and loss as of June 30' 2013 and December 31, i0t2, market values of the Company's investments

(FvpL) amounted to $0.140 million and $0.143 million the | .65t)/o net decline in this account is due to .respectivety. " in siocks. 'ower

Receivables arise mainly from Proceeds from lifting/sales. The | 1.85% increase in this account is due to higher amount ofuncollected riftings as ofJune 30,2013 cJmpared to December 3r,2012.

crude oil inventory pertains to PERc's share in the EMp ending inventory. This amounted to US$ 1.003 million and us$0'415 million at the end June 30, 2013 aJDecember 3l, zol2,respectivety. The l4l.76vo net Page 8

PERC SEC-I7Q

2no

Quarter 2013

increase is due to higher number of barrels left unsold from 3,783barrels as of December banels as of June 30, 2013.

3l.2OlZ rc

9.722

Advances, prepaid expenses and other current assets consist of advances to contractor, defened financing costs, VAT credit charges, prepaid insurance, supplies inventory, refundable deposits, and other p."puyr11.ntsl This account amounted to US$7.801 million and US$6.491 million as of June 30, 2013 and December 31.2012. respectively. The 20.l8o/o increase mainly pertains to additional down-payments made for the Transmission Line

in connection with the construction of the MCPP, additions to

va-t

iredits, investments in Money market

placements whose maturib/ is more than 3 months and other prepayments.

Property, plant and equipment (PPE) amounted to US$65.946 million and US$51.456 million as of June 30, 2013 and December 31,2012, respectively. The 28J6% net increase in this account was mainly due to progress in the construction of MGPP, FCRS and additions to wells and platforms Gabon.

Deferred oil exploration cost amounted to $8.637 million and $6.643 million as of June 30. 2013 and December 31,2012, respectively. The 30.01% increase was due to continuous exploration and development activities in Gabon West Africa.

Deferred tax assets/ (liabilities) (DTA/L) occurs due to timing differences in recognizing temporary deductible expenses and temporary taxable revenues such as accrued

profit share, accretion expenses, accrued retirement liability, provision for probable losses and change in crude oil inventory. Appirently, the Company has US$0.147 million DTA in December 31, 2012 compared to US$0.082 million DTL in June 30. 2013. The change is mainly accounted as increase in crude oil inventory.

Investment properties remained unchanged as ofJune 30 31,2013.

Advances and other non-current assets consists of the non-cument portion of advance rent, advances to contractors, restricted cash and deferred financing costs amounting to US$2.436 million and US$2.523 mi ion as ofJune 30,2013 and December 31,2012.

Accounts payable and accrued expenses consist of payable to suppliers and contractor, accruals of certain general and administrative expenses and interest accrued pertaining to loans. The 47.73o/o decline in this account was mainly due to settlement of progress billings for the construction of MGpp. Dividends payable pertaining to unclaimed dividends amountsd to US$0.244 million and US$0.260 million as ofJune 30,2013 and December 31,2012, respectively.

Income tax payable increased by 120.77% from $0.075 million to US$0.166 million as of December 31,2012 and June 30'2013, respectively due to additional provision for income taxes current for the 2'd Quarter 2013.

Loans payable pertains to the US$54.7 million loan facility availed by MGI from RCBC and Bpl to finance the construction of 20 MW MGPP. Balances represent the drawn portion of the loan.

Accrued retirement liability decreased by 50.34% due to additional funding of the retirement fund.

Asset Retirement Obligation amounted to US$0.256 million and US$0.238 million as of June 30, 2013 and December 31,2012, respectively. The7.75% increase in this account resulted llom the amortization of the net present value ofthe additional abandonment costs estimate for the Avouma and Ebouri oilfield.

Equity attributable to equity holders of the Parent Company amounted to US$41 .008 million or book value per share of US$0. I 50 as of June 30, 2013 and US$4 | .308 million or US$0. I 5 | book value per share as of December 31,2012.

Non-controlling interest pertains to the 25%o share of Trans-Asia Oil and Energy Development Corporation (Trans-Asia) and l0o/o share of Philippine National Oil Corporation Renewable Corporation (PNOi-RC) in Maibarara Geothermal, Inc (MGI).

-

Page 9

PERC SEC- I 7Q 2no Quarter 2013

4'

Consolidated Results of Operations (For the six months ending June 30,2013 and June 30,2012) For the Six months Drding

30-Jun-13 30Jun-12 OILREVBIT]ES

s6279,90r

$6, 197,0s6

2,429,520 834

2,s03,349

3264.183

3.24t.t85

%

Change 1.34%

V" in Total

101.89/o

COSTOFSALES Oil production operating eryenses letion

GROSS INCOME

-2.950A

39.42o/o

t3.12%

13j4%

0.7lYo

52.960/o

5.871

2.02%

48.930h

147,947

246,280

Q56,645)

)1a )1,)

-39.93% -t93.25%

16,492

-6s.90%

(42,23t)

-56.39o/o

0.09/o -0.3v/o

3,0r 5,718

737

GEF{ERAL AND ADMINISTRATIVE

OTHR TNCOME(CHARGES) Interest income Net unrealized foreign e>ahange gain Net unrealized gain (loss) on fair value changes on financial assets at FVPL Accretion epense Miscellaneous incone (ch

5,624

(18,4I9)

2.4U/o

4.t6%

4.793

8

135.t8%

0.08%

| | 6.700

497.8t1

-t23.44%

-t.89%

INCOI\{E BtrORE INCOME TAX

1344,090

2,186,714

-38.53%

21.8t%

PROVISION FOR INCOME TAX

703.141

t64

16.77%

n.4l%

$640.949

50

-59.55yo

t0.40%

$898399

$1,683,363

46.630/o

14.58o/o

s7.450

IJ

160.54%

4.18%

$640949

50

-5955%

10.40o/o

NETINCOME

NEI INCOME (t os s) ATTRTB UTABLE T0:

&uity

Holders of the parent Conpany

Noncontrolling inter€st

NETINCOME EARNINGS pIR SHAREmS) FOR NEI INCOME ATTRTBTJTABLE T0 Qurry HoLDERS OF THE PARXNT COMPANY- BASIC AND DILTJTED

Note: Dffirences in amounts are due to rounding

$0.0033

$0.006r

-46.63%

of.

The Company generated net income attributable to equiW holders of the Parent Company amounting to us$0.898 million or us$0.0033 Eps and us$1.683 milliln or us$0.0061 Eps for the 2nd quarter ending June 30,2013 and 2012, respectively.

The Company generated total oil revenues of US$6.280 million and US$6. | 97 million for the six months ending 2013 and 2012, respectively. Because temporary shutdown of Ebouri 3H and 4H wells and the iune intermittent shut in of wells while drilling, overall crude oil production and average crude oil revenue for 20 I3 is

:i,

of

lower than 2012's from (loo%) 3.750 million production barrels in 2012 at u-sg t tz.cs per barrel to 3.031 Page l0

PERC SEC- l 7Q

2"

Quarter 2013

million barrels at average crude oil price of US$105.98 in 2013 but due to the downward cumulative adjustment made in 20 l2 as a result of of royalty adjustment from | 5%o to I3%o effective luly 2012, June 30, 20l j crude oil revenue is 1.34%ohigher than June 30, 2012 crude oil revenue.

oil Production operating expenses decreased by 2.95vo rlom US$2.503 mi ion to us$2.430 milrion for the six months ending 2012 and 2013, respectively due to lower royalty expenses paid to Gabon Govemment because of lower lifting from (100%) 3.725 million barels inzolz lo z.llz million in 2013.

Depfetion amounted to uS$0.835 million and US$0.73s million for six months ending 2013 and 2012, respectively. The 13.12o/o increase is due to higher depletion rate from US$ 7.79 per banei to USDl0.9l per banel. Higher depletion rate is due to the transfer of defened costs (EAVoM 3H I)evelopment well) to ppE wells which is now subject to depletion.

-

Generaf and administrative expenses increased by 22.73% primarily due to the expenses incurred for the

geothermal and wind projects.

Other income (charges) amounted to (US$O. I I 7) million and US$0.498 million for the six months ending 2013 and20l2, respectively. The 125.37%o net decline is due to the following net effects:

o

net decrease in interest income due to the Company's decline in reinvestment fund due to settlement of obligations from EMP expansion; progress payments for the MGpp construction; payments for other expenditures; and lower interest rates i.e. for MGI average interest rates in 2012 ranges from 4.57o as compared to 2013 rates of 2.g9o/o to 3.4Vo., o 193 -25Vo decline in net realized gain on forex changes from US$0.275 million gain in 2012 6 US$0.257 million loss in 2013, this resulted because, in quarter 2012, peso strengtheneifrom Decembe r 31,2012 closing of P43'84:lUS$ to P42.12:lUS$ in June 30, 2012 while in quarter 2013, peso weakened from December 31,2012 closing of p41.05: IUS$ to p43.20: IUS$ in June 30, 2013; o 65.900/o decline in net unrealized gain in changes in market values of investments in stocks traded in the PSE due to lower market values of investments; c 56.390/o decline in accretion expense resulting from the change in abandonment cost estimate as discussed above in the asset retirement obligation; and 135'18% increase in miscellaneous income which consists mainly of dividend income, for the quarter 2013 higher rates of dividends are received from Pl58/share in 2012 to p2.00/ share in 2013 from 39.93%o

r

Aboitiz and

PI

.656/share of Seacem.

Provision for income tax amounted to US$0.703 million and US$0.602 million for the six months ending 2013 and 2012, respectively. The l637Vo net increase is due higher taxable income as ofJune 30,2013.

Non-controlling interest pertains to the 25yo share of Trans-Asia and the l0% share ofpNOC-RC in Maibarara

Geothermal, Inc (MGI).

There are no significant elements of income or loss that did not arise from the Company's operations.

Company is expected to have additional expenditures in oil exploration in Gabon, west Affica. The Company's revenue from the Etame and Avouma and Ebouri fields will finance said capital expenditures.

Liquidity may come from internal or extemal sources. Revenues fiom oil production ian provide enough funds for operating expense.

The

The Philippines is still affected by the economic crises resulting in fluctuating foreign exchange rates and increased stock market uncertainties. Uncertainties remain as to whither the country will continue to be affected by regional trends in the coming months. The financial statements do not include any adjustments that might result from these unceftainties. Related effects will be reported in the financial statements, as they become

known and estimable.

Page I I

PERC SEC-l7Q

2nd

Quarter 2013

KEY PERFORMANCE INDICATORS The following liquidity and profitability ratios indicate accaptable levels of frnancial condition and performance of the company:

30-Jun-13

3l-Dec-12

Formula

30-Jun-12

Total Current AssetsiTotal Current

l Liabilities

Current ratio

7.82:l

6.04: I

Debt-to-eouifv ratio

1.07: I

0.94..1

0.94: I 1.63: I

10.88:

Liabi lities/Total Stockholders' Equ iry

Total Assets/ Total Stockholders' Equity Asset-to-equitv ratio Operating profit margin Asset tumover

2.07:l

1.94:l

48.02Yo

44.55%

6.18o/o

14.l0Yo

47.70% Operating profit/Revenue (Oil Revenue) 952% Total Revenue/Total Assets

There was a decline in the group's current ratio as ofJune 30,2013 as compared to June 30, 2012 due to increase of cunent liabilities from progress billings from contractors for the MGPP. Although there was a decline, the goup still has a relativily high .utr.nt ratio as an indication that the $oup is liquid and has the ability to pay cunent obligations when they become due.

There was an increase in the group's debt-to-equity ratio as of June 30, 20 t 3 as compared to June 30, 2012 due to the drawdowns of long-term loans availed for additional funding of MGPP.

The asset-to-equity ratio indicates the group's leverage. This increased because of the additional proceeds from the loan bonowings to support the MGPP. There was an increase in the group's operating profit margin as ofJune 30,2013 mainly because ofthe increase

in oil revenues.

There was a decline in the asset turnover mainly because ofthe on-going MGPP in which the group expects the commercial operation on the last quarter of 2013.

4,

Discussion of indicators ofthe Company's level ofperformance.

Productivity Program:

riin

ro*r" of revenue is from its share in oil production in the Etame field, Gabon' West The Company's Afiica. The 6perator of said project (Vaalco, Inc.) and the members of the consortium have identified some wells to be drilled in order to increase production. Vaalco, Inc. has the necessary skills to manage the resources and complete the work on time and within the budget.

Receivable Management Most of the Compiny's receivables reported in the Balance Sheet are mainly receivables llom sale of crude oil (Etame, West Africa). These are being recorded once sale of crude is made. Payment will be received 30 days after the sale.

For the past one hundred thirty (130) months since oil production inception, there was no event that the buyer failed to remit the proceeds oithe sale. However, the Company is willing to look fot another buyer should there be some failure that may happen in the future.

Liquidity Management

Management of Iiquidity requires a flow and stock perspective. Constraint such as political environment, taxatiJn, foreign exihange, interest rates and other environmental factors can impose significant restrictions on firms in management of their financial liquidity.

Page 12

PERC SEC- l 7Q 2no Quarter 201 3

The company considers the, above factors and paid special attention to its cash flow management. .I.he company identifies all its cash.requirements for a cenain period and invest un.ertricteJ funds to money market placements to maximize interest eaminss Inventory Management The only inventory is the crude oil produced in cabon. The buyer lifts certain volume and pays the same in 30 days' The operator sees to it that crude oil inventory does not reach g00,000 barrels at any one time to avoid overflow and to generate revenues to cover production costs, Cost Reduction Efforts In order to reduce costs, the group emproys eighty-six (g6) emp.loyees with murti-task assignments.

Company

No. of Employees

PetroEnergy Resources Corporation PetroGreen Energy Corporation

20

Maibarara Geothermal Inc,,

53

Total

IJ

86

Rate of Return The company has no existing dividend policy. However, the company declares dividends accordance with the Corporation Code of the philippines.

The Company declared cash/stock dividends to wit: Date of Declaration January 07

,2004

August 17, 2004 June 08, 2005 June 08, 2005 June 8,2006

Dividends per Share Cash

20% 20%

June 8,2006

Jantary 29,2007

Payment Date

January I 5, 2004 3 l, 2004 June 23, 2005

Ig.bruary 16,2004

August

20%

20%

Record Date

Stock

September 24, 2004 18, 2005 September 06,2005

July

25% August 12,2005 June 30,2006 30a/o

w26,2006

August 15,2006

September 8,2006 March 16,2007 September 05.2007 March 17,2008

luly 25,2007

20% 20%

August 10,2007

February 06,2008

20o/o

w24,2008

February 22,2008

30%

July 22,2009

20o/o

August 11,2008 August 05, 2009 March 15,2010 November 08, 2010

August 29, 2008 August 3 l, 2009

June 16, 201 I September 20, 201

July 13, 201 I

&Euary 23,2010 2l, 2010

20%

May 17,20ll May 17,2011

t0%

October

April26,2012

$tril26,2012

l0% l0o/o

t0% r0%l

lqlqary 21,2007

April 05,20t0 December 2. 2010

I

October 14,2011

20l2 September2l,20l2

October 17,2012

May

18.

June 14,2012

5. Financial Disclosures in view of the current global financial condition: Assess the financial risks exposures ofthe Company and its subsidiaries particularly on currency, interest credit, and market and liquidity risks. If any change thereof would materially ailect the financial condition and results of.operation ofthe company' provide a disiussion in the report on quantitative impact or such risks and include a description ofenhancement in the company's risk management policies to addresi the same:

The Group manages and maintains its own portfolio of frnancial instruments in order to fund is own operations and capital expenditures. Inherent in using these financial instruments are the following risks on liquidity,

market and credit.

Page 13

PERC SEC-l7Q 2"" Quarter2013

Financial

Risl<s

The main financial risks arising from the Group's financial instruments are liquidity risk, market risk and credit risk.

a.

Liquidity Risk Liquidity risk is the risk that the croup is unable to meet.its financial obligations when due. The Group monitors its cash flow position and overall liquidity position in assessingiits exposure to liquidity risk.

The Group maintains a level of cash.and casir equivalents deemed sufficient to finance its opeiations and to mitigate the effects of fluctuation in cash flows. To cover its short-term and long-term funding requirements, the Group intends to use intemally generated funds as well as to obtain loan from rmanctat rnstttutlons_

The tables below summarize the maturity profile of the Group's financial assets and financial liabilities ofJune 30,2013 and December 31, 2012 based on contractual undiscounted paymen6:

as

30-Jun-

On demand

Financial assets at FVPL Loans and receivables: Cash on hand and in banks Short+erm investments Accounts receivable: Consortium operator Others Interest receivable

$

l3

6 months but less

thar

140,465

3.527

2,

Less than 6 months

,949

$r40,465

't,9t3,47 |

3,527,949 8,602,826

689,355

I87,818

2,187,818

8,l|9

8,1l9

2t,039

21,039 63. t 25

5.390 Loans payable Accounts payable Accrued expenses Accrued interest payable Dividends payable Others: Due to NRDC Others

|

3.1

s48,270,082

t,294,694 2t2,321

r

63 4,55 t.341

s48,270,082

t,294,694 212,321 837,089

837,089 244,262

)44 )6')

52,540 089

s2,540

1.885.906

Net financial assets (liabilities)

913.47

$3,999,484

$837.089 $7 ,07

6,382

Page 14

$0

077

$689,355 ($48,206,957) ($36,44t,736)

PERC SEC-l7Q 2no Quarter 2013

3l -Dec- | 2 On demand

Financial assets at FVPL lnans and receivables: Cash on hand and

in

banks Short-term investments Accounts receivable: Consortium op€rator Others Interest receivable Restricted

Less than 6 months

6 months but less than | 2 months

$t42,827

st42,827

|,020,234 20,601,988

1,020,234 21,416.729

8t4,741

r.956,341 |

1,956,341 1,969

,969

23,7

t7

t7 63.t25

23,7 |

25.00

t25 Loans payable Accounts payable Accrued expenses Accrued interest payable Dividends payable Others: Due to NRDC Others

3,t93,r 47

$38,943,444

n

942 $38,943,444 3,193.t I I

t,287

47

683,762

|,287

683,762 260,098

260,098

{s to)

<<

to)

180.455 43

Net financial assets (liabilities)

($ I,015,155)

$19,918,226

$814,741 ($38,880,319)

($19,162,507)

The 20 MW MGPP is expected to start cornmercial operations by late 2013. Proceeds fiom sale electricity will then be used to settle the Group's loans payable.

of

Market Risk Market risk is the risk of loss on future eamings, on fair values or on futue cash flows that may result from changes in market prices. The value ofa financial instrument may change as a result ofchanges in equity prices, foreign currency exchanges rates, interest rates and other market changes.

Equity Price Risk The Group closely monitors the prices of its securities on a daily basis, as well as macroeconomic and entity-specific factors which could directly or indirectly affect the prices ofthese instruments. In case of an expected decline in its portfolio of equity securities, the Group readily disposes or trades the securities for replacement with more viable and less risky investments.

Such investment securities are subject to price risk due to changes in market values of instruments arising either from factors specific to individual instruments or their issuers, or factors affectins all instruments traded in the market.

The analysis below is performed for reasonably possible movements in the PSE index (PSEi) with all other variables held constant, showing the impact on income before tax (due to changes in fair value of equity securities and golf shares whose fair values are recorded in the consolidated statements of income). The Croup used the daily average ofmovements in PSEi price indices, plus adjusted betas for equity securities.

30-Jun-201 3

Equity securities Golf club shares

Impact on income before tax % Increase lTYo $20,709

t9%

Page I 5

3.387

Decrease

$20.709 3.464

PERC SEC- l 7Q 2"d Quarter 2013

3I

-Dec-

Equity securities Golf club shares

l2

Increase

Decrease

$20, l6 l

($20.16

3.464

l)

3.464

There is no other impact on the Group's equity other than those arready affecting net income.

Foreien Exchange Risk Exposure to currency risk arises liom general and administrative expenses, assets and tiabilities in currencies other than the croup's functional curency which is very minimal since the croup,s oil revenues and costs and expenses are denominated in US Dollar. Currency risk is monitored and analysed systematically and is managed by the Group.

The analysis below demonshates the sensitivity to a reasonably possible change in the philippine peso exchange rate which is the only source of the Group's foreign exchange risk, with all other variables held. constant, showing the impact on income before tax ldue to changes in fair value of currency sensitive to frnancial assets and liabilities). The Group used the yrir-uu".ug. forecast from the Business Monitor lnternational in the analvsis.

30-Jun-Z013 Increase/decrease in P

on income before tax

+2.5s%o

$91 ,335

-2.55%

(e l,335)

3l-Dec-2012 Increase/decrease in Php rate

on income before tax

+2s6%

$8t,617

-2.56%

(81,6

l7)

There is no other impact on the croup's equity other than those already affecting net income.

Interest Rate Risk The Group's exposure to market risk for changes in interest rates relates primarily to the Croup,s shorttefm- investments amounting to US$8.602 million and $21.42 million foi June lO,ZOll and December 3l' 2012' respectively. Interest rate of loans payable is fixed for the first five i5; years and will be repriced thereafter.

The table below demonstrates the sensitivity to a reasonably possible change in interesl rates, with all other variables held constant, of the Group's net income. ih" G.oup uJ"d thr forecasted one-year Treasury Bill rate in performing the analysis below.

30-Jun-2013 Increase/decrease in interest rate

lmpact on income before tax

+51

$l r0,894

-51

(

| l 0,894)

3l-Dec-2012 Increase/decrease in interest rate

Impact on income before tax $ | 09,606

+51 -51

(r

Page 16

0e,606) PERC SEC- I 7Q

2no

Quarter 20 | 3

There is no other impact on the Group's equity other than those already affecting net income.

Credit Risk There are significant concentrations of credit risk within the Group since most of its financial assets are with consortium operator, although credit risk is immaterial.

The table below shows the summary of maximum credit risk exposure on financial instruments as

of

June 30,2013 and December 31,2012:

3l-Dec-12

30-Jun- | 3

Financial assets at FVPL: Marketable equity securities Golf club shares

$r 24,030

Loans and receivables: Short-term investments Cash in bank Accounts receivable: Consortium operator - net Others Interest receivable Restricted cash

$

125,531

16,43s

t7,296

8,062,826 3,512,623

21,416,729 l ,01 6,093

2,1 87,81 8

1,956,341

l9

t,969 23,7l7

8,1

2l,039 63.125

63.125

$I3,e96p15

$24,029

The Group has a well-defined credit policy and established credit procedures. In addition, receivable balances are being monitored on a regular basis to ensure timely execution of necessary intervention efforts, The Group determines the credit quality by class for loan-related consolidated statements of financial position lines based on the following: Cash in banks qnd short-term investments -based on the nature ofthe counterparties and the reputation of the fi nancial institution.

Receivables - based on the payment behaviour ofthe counterparty. High grade pertains to receivables from consortium operator and interest receivable from short-term investments and standard grade pertains to other receivables. Both are neither past due nor impaired.

The tables below shows the credit quality by class ofasset for loan-related consolidated statements financial position lines, based on the Group's credit rating system as of June 30,2013 and December 31,2012:

of

30-Jun-13

Neither past due nor High Cash in banks

grade s3,5t2,623

Short-term investments Accounts receivable:

8,062,825

Consortium operator

2, r 87,818

Others Interest receivable Restricted cash

8,1l9 2t,039 63,125 $13,855,549

Page 17

impaired

Standard

grade -

Past due u.

no^.-^,

rmoalreo

To,ul

-

s3,5t2,623 8,062,825

62,094 -

2,249,912

8,1t9 2l ,039

63,125 $13,9r 7,643

PERC SEC- l7Q 2"d Quarter 2013

3l-Dec-12 Neither past due nor High

grade

impaired

Standard

past due

gradc Id .

Tota

Cash in banks

Short-term

investments

21,416,729

$21.4t6.72g

Accounts receivable:

Consortium operator Others Interest receivable Restricted cash

I

-

,956,341 1,969 23,7

$2,021,687 $

-

t7

63,125

-

s24,477,974

Il"-991".

3t.2012.

65,346 -

1,969

s23,7t7 s63,125

$65,346

524.s43.320

below show the aging analysis ofthe Group's receivables as ofJune 30, 2013 and December

30-Jun-13

I to 90 days

Over 90 days

Total

$2, I 87,818

$62,094

s2,249,9t2

Accounts receivable

Consortium operator Others

8,1

Interest receivable

l9

21,039

8,1

I9

21,039 $70,213

3 I -Dec-

Ito90

I2

Over 90 days

Accounts receivable

Consortium operator

$

r

,956,34 I

Others Interest receivable

23,7 t7

$65,346

$2,021,687

1,969

t,969 23,'717

As ofJune 30' 2013 and December 31,2012, the Group has no past due receivables that are not impaired.

Past due and impaired receivable pertains to a long-outstanding receivable ffom a consortium member

which is fully provided with allowance.

With respect to credit risk arising from the other financial assets of the Group, which compose offinancial assets at FVPL, cash in bank and short-term investments, the Group's exposure to credit risk relates to default of the counter party' with a maximum exposure equal to the carrying amounts of these instruments.

Page 18

PERC SEC-I7Q

2nd

Quarter 2013

B.) OPERATIONS REVIEW AND BUSINESS OUTLOOK A. Oil Exploration Foreign Operations Gsbon, lYest Africa The oil production from the three fields (Ebouri, Avouma and Etame) during the second quarter of2013 ranged from I1,400 19,500 bbls/day, with an average daily production of 16,891 bbls. The fluctuations in the daily production are caused by the following: a) intermittent shut-in of ET-4H which requires build-up of pressure prior to production; b) platform shutdown due to successive drilling activities in the Avouma and Ebouri; c) FPSO production process shutdown due to Fire & Gas loop failure; d) ET-5H and ET-6H wells temporarily shut-in for gaslift compressor maintenance; and e) trip in diesel generators. The new well EAVOM-3H was put online on 9 April 2013 with an average production of -2,200 bbls/day. Three liftings were done during the 2nd quarter and values ranged lfom 150,000 to 700,000 bbls.

-

The Ebouri wells EEBOM-3H and EEBOM-4H, which contribute -2,000 bbls/day, have been shut-in since July 2012 due to high H2S. These wells are programmed for shut-in services after the drilling of EEBOM-5P. For safety purposes, the installation of H2S detection device in the platform had been performed. To be able to utilize these wells with high H2S, the Ebouri Crude Sweetening Project has been kicked offand is currently in the Pre-FEED stage.

On the Etame and SEENT projects, structural fabrication is ongoing for the new platforms. The Transportation and Installation (T&I) contracts had been finalized and awarded ro EMAS.

The work-over in EAVOM-2H and ETBSM- I H to replace their Electric Submersible Pumps (ESP) were conducted on April l0 to May 4 and May 5 to May 20, respectively. The rig was mobilized to the Ebouri platform starting 20 May 2013 and started drilling the new well EEBOM-sP on May 27 . The drilling campaign for EEBOM-5P, which lasted 34 days, yielded negative results as the two target reservoirs are both waterbearing. By the end of June, the rig was skidded from EEBOM-5P to perform the well service operations for EEBOM-3H and EEBOM4H. Philippine Ooerations SC l4-C2

-

IVest

Linapacan, Northwest Palowan

Operator RMA (HK) Ltd. is continuously doing its review work for reserves certification and reservoir simulation, alongside further mapping of the West Linapacan field for additional leads and prospects. In parallel, well trajectory and drilling objective planning and costing are also being conducted towards early production and full field development in West Linapacan.

SC

5l - East Visayas

After securing the LGU endorsements and landowner permits, site preparation and ground levelling have started mid-April 2013. The Operator, Otto Energy, called for a technical committee meeting on 22 May 2013 to present the geological prognosis, as well as the updates regarding site preparation. Mid-July is the scheduled spud date for Duhat-2 well which is programmed to reach a total depth of 1,050m. Duhat-2, a commitment well under Subphase 5, has an estimated cost of $7.56 MM, in which PERC is canied free.

On the other hand, the negotiation between potential Farminee in the south block, Frontier Oil, and the Farmors is still on-going.

SC 6-A - Octon-Malajon Block, Nortlrwest Palawan On 7 June 2013, Operator Pitkin Petroleum announced that the Sangguniang Panlalawigan of Palawan has given the endorsement of the bathymetry and seismic activities in SC 6A. Final endorsement by the Palawan Council for Sustainable Development is now being sought by Pitkin.

Page 19

PERC SEC- I 7Q

2no

Quarter 2013

Meanwhile, the Operator is still searching for a suitable vessel for the seismic survey.

Summary of Petroleum Properties:

Contract No Production Sharing C.ontract (PSC) 93 - Gabon Service Contracts (SC) - Philinrines SC 6A - Octon Malaion Block SC 14C2 - West Linapacan SC 47 - Offshore Mindoro

Contract

hpry

Participating lnterest 7o

2014

2.525Yo Gabon Offshore

2024

5.O0l%o Northwest Palawan

2025

1.034Yo

pending

2.AO0P/o

SC51 - East Vis ayas

20r4

The Company derives its revenues from its Gabon Operations.

Govemment are complied with.

Location

Northwest Palawan

Offs hore Mindoro 4.0t2yo East Visayan Sea

All contractual obligations with

the Gabonese

B. Renewable Energy Nabas ll/ind Power Project PetroGreen Energy Corporation (PGEC) started the road rehabilitation of the existing barangay road going to Barangay Pawa, where the wind farm will be developed. A ceremonial kick-off of the road rehabilitation was conducted last 3 May 2013, which was attended by Director Mario Marasigan of DOE and members of the host LGUs from Aklan Province and Nabas Municipality.

PGEC has given Maintenance last

a Conditional Award for the Wind Turbine-Generator (WTG) Supply, Installation

and

l6 May 2013.

On 28 May 2013, the Malay Municipality, through the Sangguniang Bayan, has given their favorable endorsement of the project. Lease contracts with various land owners of priority WTG sites had also been secured.

On 3 June 2013, PGEC received from the DOE the confirmation of commerciality dated 19 May 2013 for PGEC's 50 MW Nabas Wind Power Project (NWPP) signed by DOE Secretary Carlos Jericho Petilla. This approval means:

l)

NWPP is pre-qualified to compete for the 200 MW FIT allocation for wind projects in the first round of the Feed-in Tariff(FIT) system;

2)

The Nabas Wind Service Contract is effectively converted from pre-development to development stage with a total contract life of25 years, and

3)

PGEC can "officially" start development works in Nabas.

On 14 June 2013, PGEC secured from the Civil Aviation Authority of the Philippines (CAAP) the Height Clearance Permit (HCP) for the 25 WTC towers that will be erected for the 50 MW NWPP. Maibarara Geolhermal Power Project Steamfield and Power Plant construction for the Maibarara Ceothermal Power project is on-going.

As of quarter-end, over-all progress for the steamfield Fluid Collection and Reinjection System (FCRS) is 90% with the following breakdown: Engineering Design 98%, Materials Procurement 100oh, and Construction at 847o comDlete.

Page20

PERC SEC-17Q 2no Quarter 2013

Progress

for the FCRS engineering

components are as follows:

Mechanical 98%, Electrical 98Vo and Insulation 3g%.

Civil and Structural 100%, piping

and

Two major activities were completed in the second quarter, first is the FCRS flushing activity last May 17,2013 and the other is the FCRS Pressurization last June 20,2013. The purpose ofthe fluiling was ro clea; the pipes

of

debris

in

preparation

-

for further

FCRS pre-commissioning and commissioning activites. For the pressurization, well Mai6D was used. The well was connected to the line and to the separator until the ideal operating separator pressure was obtained. Steam condensate sampled after the separator has 0.3ppm Sodium content, indicating good separator efficiency.

The over-all EPC progress for the Power Plant constructio n is 960/o as of quarter ending June. Breakdown of compfetion is as follows: Engineering 9670, Procureme nt gTyo and Construction at 95y0.

Construction of the turb_ine-generator building is 80% complete while installation ofthe components and equipment js at 92vo. The cooling tower installation is 9970 complete while construction ofthe pump house and gas extraction system is at 90%;o

and

85/o respectively.

For the Transmission Line (TiL) construction, 82 out of the 96 T/L poles have been erected as of I July 2013.

RoW negotiations for the remaining T/L poles are ongoing. Foundation excavation for the Communication Tower required by NGCP is already completed and ictual construction is underway. over-all switchyard construction progress is 90% as ofend June 2013.

Plan ofOperations for the next

l2 months

A. Oil Exploration Gabon. IYest Africa The activities for the next 12 months will focus on commissioning the Avouma water knock out facility and completing the drilling ofthe new wells and workover of existing wells. The on-going construction ofthe new Etame and SouthEast Etame North Tchibala platforms will be continued.

B, Renewable Energy Nabas Ilind Power Project The activities for the next twelve months

Maibarar a

G

will focus on wind farm construction.

eotherm al P ower P ro i ect

with

the target date of commissioning on 3'd quarter of 2013, construction of the power plant and development ofthe steam field will continue.

Part

II

- OTHER INFORMATION

The Company has no other information that needs to be disclosed other than disclosures made under SEC Form 17-C (ifany).

Page 2

I

PERC SEC-l7Q

2no

Quarter 2013

SIGNATURES

Pursuant to the requirements of the Securities Regulation Code, the registrant has duly caused this report to be signed on behalfofthe undersigned thereunto duly authorized.

Registrant

PETROEN ERCY RESOURCES CORPORATION

Signature and Title

/)/ Signature and Title

frm,t A4/

Yvdnne S. YucllAngco

-

Treasurer

,^) Date

Page22

PERC SEC- l 7Q

2no

Quarter 2013

PEIROTI\'R,GY R"ESOI,JRCES COMORATION .AND CO\-SOLIDATE) SrE

S

UBS

IDIARIES

Unaudited

Audited

30Jun-13

30-Jun- I2

3l-Dec-12

$11,441,420 140,465 2,216,976

$20,252,287

$2t,622,n2 14,827

ASSETS

Current Assets Cash and cash equivalents Financialassets at fair value through profit and loss Receivables Crude oil inventory

Advances, prepaid eryenses and other current .fotal current

orr",.

1,002,746

125,450 t,900,252 387,34s

1,982,027

assel f-.r80-0-:51-t z,soo.srl _q9a:,ztq ^;;';;; 22,602,12O 29,ffi8,548

4t4,764 r'r"u'' o,+90,zot 30,6s2,541

Noncurrent Ass ets Property and equiprFnt-net Deferred oil eryloration cost Deferred tax assets-net Investment properties -net Advances and other non-curenI assets

Total Noncurrent Assets

65,,945,949

32,826,429

5l,455,8s6

8,631,126

6,4s5,s02

6,643,203

03,910

I46,806

t

31,417 2)435,552 77,050,044

40,73s,63t

60,8cn,224

$99,652,165

s70,344,t79

$91,4s2,76s

s2,478,733 244,262

$1,577,772

s4,74,267

l6s,612

228,2s9

75,015

2,888,607

2,72t,708

5,077,380

31,4t7

31,417

l,318,373

2,522,942

LIABILITIES AND EQUITY Current Liatrilities Accounts payable and accrued erglenses Dividends payable

Inconr

tax pav able

Total Cunent Liabitities Noncurrent Liatilities

Ioans payable Accrued retirenrnt liability As set retirenrent obligation Deferred tax liabilitv-net To ta I No

n

cunen t Liab ilir ies-

Total Liabilities

Retained eamings

Appropriated Unappropriated

260,098

48,270,082

23,843,793

39,1l3

4t,862

78,755

256,087

516,524

237,68

l

38,943,444

$82.r l 48,647,393

24,4tr.2,179

39,259,867

5l,s36.000

27,123,887

44,337,247

6"321,533

6,321,533

6,321,s33

25,.244,737

25,244,737

25,244,737

3,149,555 6,610,260

2,055,555

2,055,555

6,033,179

vr7v,,a1z 6,%7,942

41,008,406

39,016,011

4l,308,139

&uity Attributable to equity holders of the parent Company Capital stock Additional paid- in capital

915,677

zzs,:zz Noncontrolling inerest r oral Eq ulty

4,204,281 48,116,164 $99,652.165

43,220,292 $70,344,179

5,807,379 47, | 15,518

$91,452,765 er 20l3

PETROB{MGY RESOURCES CORPORATION AND SI,tsSIDIARIES CONS OLIDATE) STATE\,IIT{TS OF tr.rcOl,|E'

Unuadited

30Jun-13

30-Jun-12

For the 2nd

Quarter OILREVB{TJES

$3,360,556

For the 2nd

To date

Quarter

To date

$6279,901

$2,662,391

$6,197,056

2.,429,520

1,049,678

2.503.349

COSTOFSALES Oil production operating erpenses

Depletion -

r

J60,609 ^486-66<

GE\ERAL AND ADMINISTRATIVE D(PTNSES

Rl/ ((r

11t <o^

'"rvrlr'+t

t,847274

3,264,184

t,42t,262

3,241,185

Lll3rsz

3,ols,7t8

t,24t,129

2,955,871

777,798

1"554p28

t3,089

t,266,968

147,947

n0,2t3

246,280

(2s6,644)

t27,699

'r1< 'r't',

6

oTHm. rNcowtE (CHARGES) Interest income Net unrealizd foreign exchange gain (loss) Net unrealired gain (loss) on fair value chanses on financial assets at FVPL

Accr€tion eryense Miscellaneous income (charges)

5l,509 (230,833) (6,581) (9,210) 4,568 190

5,624

(I8,419)

(

(2,143)

rc,4n

r6,330)

(42,231)

4,793 16,699

1,770

2,038

221,209

497,8t1

849,249

2,186,714

INCOME BIFORE TNCOME TAX

550,938

1344,090

PROVISION FOR INCOME TAX

393,745

703,141

267,441

602,r64

157,194

640,949

58 r,808

r,584550

622,063

1,683,363

NETINCOME NET INCOITdE(t

oss) ATTRJBUIATBLETO:

Equity Holders of the Parent Noncontrolling interest

Company

Nf,'IINCOME

329,248 898J99 $t57,194

S640,949

$58r,808

$0.0012

$0.0033

$0.0023

$1.s84.550

EARNINGS PER

S HARE FOR NE-I INCOME ATTRIBUTABLETO EQUITY HOLDERS OF TI{EPAREI\T COMPAT{Y- BASIC AND DILUTE

Page 24

PERC SEC-l7Q

$0.006r

2nd

Quarter20l3

PETRONM,GY RESOURCES CORPORATION AND SUBSIDIARIES CONSOLIDATID STATET,ID\TS OF COMPRE{U{S IVE INCOME Unaudited 30-Jun-13

NETINCOME

3GJun-12

$640,949

$

455 103

I,001 /6J

r,s84,550

OTIIM, COMPRFJIMIS WE INCO ME Cumulative trans lation adiustment

TOTAL COMPRUIO\S N'E INCOME CoMPRIITEIS tvE INCOME (t,os S) ATTRIBUTABLETO: Equity holders ofthe parent Cornranv Noncontrolling interest

I,100,598

Page 25

PERC SEC- I 7Q 2no Quarter 201 3

Unaudited

30Jun-l J

Audited 3l-Dec- 12

lGJun-12

CAPITALSTOCK Authorized-330,000,000

s

hares

Issued and outstanding -273,g24,220 shares

ADDMONAL PAID-IN CAPITAL

737

APPROPRIATU) RETAINID EARNINGS Balance at beginn ing

ofyear

2,055555

25.244,737

25.244,737

2,055,555

TNAPPROPRIATD RETAINID EARNINGS Balance at beginning ofyear Net Inconre ( see note I )

6,907,942 5,637,881 5,632881

796316 r,683,363 2,557,737 _ (t,288,065) (t,287,676)

Cash Dividends

Additional

appropriation

(1,094,0001

CUMTJI,ATIVE TRANSI,ATION ADJ T,tsTMU{T Balance at beginning

ofyear

778372

Movernent of umulative translation ad

(s6,228)

(s6,228)

-317 41,108, r39

NONCONIROLLING INTERES T Balance at beginning

ofyear

5,807J79

Net inconre (loss) Increase in non-controlling interests

QS7,4so) _

stock issuances

l557A3l 7

Page 26

,107.761

3,851,627

(98,813)

45t.467

3,851,627

(223,t37) I

I

PERC SEC-l7Q 2nd Quarter 2013

30Jun-I

30-Jun-l

For the 2nd

angc galn

Interest income

(gan, on fair value changes on tinancial assers lo:s at ralr vatue through prolit and loss .n of q.p"rty, planr and equrpmnt 3'n N:.t

.t

op.,ur'g'"o,,* bEo"iiil-illEf rJecrease (mcreasel in

iililiiilE

t,083,263 |

2,156,035

911,995

34203 3I,E95 (506,150)

(t6,492)

(24,880)

rro.iffiilif

2,535,2U

47,836 Q34,949) .ry.785

(838,7r7) (ss7,e82) (220;.8n) (s26,32t) (1J09,8r3) 265.35s

Interest rcceived

740 (73E,678)

(2,240,242)

68,502

150,625

I

4l

act|vItes

cAsHFr,o\tsFRolrn-]!|]}__'ffinlc;ffi

2.t43

(384.278) t,t3r3,392

(17,892)

Crude oil inventory Advances, prefraid epenses and otrrcr current assets ,lncrease (decrcase) in accounts payable and

Income ta)€s Net cash

(s,624)

r( sQt

Receivables

4,229,659

l'75,7U 60, 54

.t

I

620,885

410 1,79t,653

t,739,263

91,3@

245,506

629.1

t,53'1

32,735

t,o3s,26s

6,480,093

4U,433

l.Bl

tEs

planr and cqurprnent

of

(1,6 | 1,4

49)

0 s,037,624)

Property and oquiprnent

Fmancialassets at fbirvalue through prolit and loss m capitalized interest

(5,026,813) (t2,444,s53) (32,353,91 t)

,lncrease

(3t,J

t7)

122345

t7J90

(1,rs8,s93) 0,993,e23) Ner cash used in

Audted

2nd

9384 (276.8t6) e7sl32) -.0-'1:0. e773s4 tut:l1l (340) Q9,642) 424.M2 844,341 9,209 t8,4t9 21.5% a) )11 (sf .sr0) (4i,s411 1ro,2r3) rzi.iiol

and amo(i.ation ccrued rettrement liabtlity

oleroeeny, l:1:iltilns rtoceeds liom disposals

ahe

$550,937 $1,344,090 $849,243 $2,r86,714 $3233.369

AdjustnEnts for.

accrued {lash generated

For

(3%,073)

-

Et,997

-

(t,263,6rn)

2,t57,885

(623,834) (8

activitics

,s35)

cAsHFLo$,sFRo\rr{r:Tft iNE;cTnrry--

rroceeds hom long_term debt it |onal capital liom noncontrolling Interest t,rvlqends patd Add

(2,822,ss4) 792,432 (13,729 t r,6

Net cash

9326,63E 1557,83

9,971,5f0

9,971,510

25.648,305

(645,481)

(t,2s2.489)

r

(r s,836)

t

2,178,8m

(u9,289)

459

rFEcroIFoR.o(D(cFi;i;TEc-cES-

9,78t.741

IN CASHAND CASI I EOI JWA r FN-rS NcR EAs E (

\Er

EQUTVALE\"m

"1?f,

DEcr@hG;IiD- cEE

ffifi :ffifl ^L''rrs Ar

B

EGIr\{NNG o F

(7,496,903) (t0,t80,602) 2r,622,222

Page 27

s.889,524

(1,6st,941)

(282,062)

2l

PERC SEC-I7Q

2no

Quarter 2013

PETROhRG}' AcrNG

RESOT'RCES CORPORATION

oFAccorNrs nrr.,vvl'rl w rutuuodEi)

AS OFJt]NE30,20r3

Total

0-30

dap 3t{0

daw

6I -90

dals

Nature/Descripaion

90 Vaalco, Gabon

$2,187,818

Alcom Petroleum & Minerals Inc. Interest Receivable

2t

Othen

r

,039

8,1

Impaiment loss

$2, t87,8 t8

62,094

l9

21

62,$4

,039 8,1

Lifting proceeds ano oy€rpayment Advances fbr orl eploration

l9

(62,0%)

-

(62,0%)

('(el

_

_ ---

-

Page 28

PERC SEC- l 7Q 2no Quarter 2013

l_gTEs

ro

TNTER!M FTNANCtAL

JUNE 30.2013 (In U.S. Dotlars)

l.

Corporatelnformation

a.

Organization PetroEnergy Resources corporation (the Parent company) was incorporated in the philippines on 29' 1gg4 and. started com....r"irp"*ir"ns in lgg5.

The registered companv is 7th Floor, Jrrar. euildinJ, of the ebt-al,.nu., ortigas centei-p"rlg office address petroEnergy Resources corporation and its subsiiL.i., u."'inuoru"a ;.-;;;r;*;iln"uno deveropmenr of petroleum, geothermal.and. *inA ,n..gy ,"rour.rr.' ffr".parent Compiny,s shares of stock are listed and are currenrly traded at the fhilippii'e Sioct e*"f,unee tpSel. September

f

ciry

on July 22' 2009' the Board of Directors (BoD) and of incorporation of the- Paren^t c"tpu"t;Jl;t'oJ'irr. Srockholders approved the amendment of anicles uu"in.r, of generating power fiom conventionar sources such as coal' fossil fuel' nitural gur, nu.Lu, and other traditionar ii."", of po*"r and from renewabre sources such as, but not riritrj tq uio,nlss, hydro, sorar, wind, geothermar, ocean and such other renewable sources of p"*r.. ifr.-#."arn., *ut approved by the Philippine Exchange cor,nirrion (SEC) Securities and on september 23. 2009t:

on February 23, 2010, the^BoD approved the creation of a wholy owned subsidiary, petroGreen Energy corporation ("pctroGree" ti.t-riuil ou, rrr" i"n"*uii.-"iergr pro.,ect, ro.tte Parent company' The SEC "ipcec;l upp.ou.o ttr.

ii.iilili;"

"_urry petroGreen on of June 30,2010.

on May lg'2010' petrocreen signed a Joint venture Agreement (JVA) with Trans_Asia and Energv Development_corpo=ration and pNob .,Jv RC") (co'ectively

oil r"i*".dii'l R.;.;;il;rporation (,.pNoC_ partne;li;;;ff il'ru o1*1.g i*;;;; ili# resources tosether lJ.*,:ffi#':i:'*:T:"ffJT:J:rH:t"J*ilHi,'#" the Maiiarara cJ",i..'"r.ni"ro 'r,,.ffi.t, on August I1,2010, approved.the in.olpoiuiion of MGr. rh; sEc *hor" prin.ioutTl]:-t:^ti !y:l); sream nerds una po*.ipru,t' p,'..u,niro,il'iuf,'ffff::J;:ff""'1ff?,i.",:.Tf Tran-Asia and pNoc-Rb horo zjz" anJ Iri'J.ri"rry. MGI is effectivery, a subsidiary Parent company through petroG.r"", '01",',ilt:l.l ^i8,Tffiil of rhe 1i."" tire

PetroGreen owns more than half of the

"ri"g

p"**

"f

VfCl

company who'y owns petroGreen

and

Through a Special Meeting ofthe Board of Directors in January 20 r3, petroGreen created its own wind subsidiary, petrowind r"". *,,, una"rtar.e th; N;;;;.ivind power pro.yect (the "Nabas project"). TT-..qy:

G;"il;;i'**

*"i i"|".p".#ji rr,tu..r, e , zots iip.;;;n,.

Irq".","g subsidiary. It wiil underrake whorry_owned ttre Nauas fui;;;;, projecr as an incorporated -(30%), Joinr Venrure and; Fir;;"" partner (30%) 3:f"".1#;T:1,:rf:T?:'ff,.:13:';;; i"'ii*" o"**

b.

The Parent company, Petrocreen, Petrowind and MGI are collectively referred to as the Grouo.

Nature ofOoerations The Group's three (3) main energy businesses are petroreum, wind and geothermar enerev.

Pelroleum

Petroleum production is.on-going in the Etame (Gabon) concession, whire the other petroreum concessions in the Philippines (Noihwest p"i**-, d#rnor. Mindoro, Eastern visayas) are aclvanced exploration srill in stages or pre-development staees.

Page 29

the

PERC SEC- l7Q 2'd Quarter 201 3

Wind Energt The wind project in Nabas, Aklan is in the 3rd and final year of feasibility studies while the other wind service contract in Sual was dropped d", t" l";;;;;]"

rn 2012' PCEC moved

t" the proje* rowards evenruar commerciarirv. acrivities centered on securingrriticar The key 11g^?11i'ce govemment permits, completing technicai f..r;;i;q, srudies, and mltlatmg request for engineering, procurement, and construction bids for the wind farm.

Geothermal Energt

The geothermal project is the 20 MW Maibarara project in sto. Tomas, Batangas where MGI is now constructing the power plant for commercial operations Uy late

2.

ZO t

l.

Summary of Significant Account Basis of Preparation

The accompanying consolidated financial statements h^ave been prepared under the historical cost convention method' except for financial utt.o u,'fair varue through profit or ross (FVpL) Parent company's crude oir inventory and the "urri"a h;;';;;;;easured ar fair varue. Figures are presented in united states (US) Doilar ($), the parent c";;;y';;;;tionar ,urrrn.y. All amoulnts are rounded to nearest dollar unless otherwise indicated. the

rd

Statement of Compliance

Ill'#:iil#J,l?;n:'j:::':gritTciar

statements have been prepared

in compriance with phirippine

Basis of Consolidation The consolidated financial statements comprise the financial statements of the croup as at June 30,2013 and December 31' 2012' The-financial subsidiaries are prepared for the same reporting year as the Parent

d.;;;;ith.

Company, using consisten, u..oun,inf

PCEC

foi,.r.r.

l00Yo

PWEI

t00%

IO0o/o

65o/o

65%

65o/o

l00Yo

t00%

t00%

1000h

MGI Navy Road Development Corporation (NRDC)

Subsidiaries are consolidated when control is transferred to the Group and cease to be consoridated -pr"lu,n.o control is transferred out of,the when i, to exiit when ,r,. crorp owns directry or .a:loii indirectly through subsidiaries, more than halfofthe uoting po*". ofan entity unress in exceptionar cases, it can be clearly demonsfated that ru.h o*nr.Jip-i".r'""i l""uirte contror.

o*o

The consolidated financial

st

andother,""",,r"',i''ir*;1Til".,:li.:::Xiiffili#"liif and expenses and gains and rosses

i::::,ft ,:,ffiffiH?il *. "ril;;;;;"i,i'ir,. f#i":ilTT*ff .onroliail;:;ffi;#ompany balances,

transactions, income and expense and profit and loss are-eliminated in full.

Non-controlling interests are presented separately fiom the,parent company,s equity. The portion ofprofit or loss and net assets t tlltl!]1n.,J"i*liriv:"*"i" are presenred separarely in rhe consolidated

:s:ffi:iiH'J:ff:1fi"Tnfi":xl#"'"rid;"J;;;;;'ent olosses

Lf changes

il d;6,

within a subsidiary are attributed to the non-controlring interests even

Page 30

if

witnin equitv in

trre

that resurts in a deficit

PERC SEC-l7Q

2no

Quarter 2013

#i#,ffi1iT.Tffit"i,:::::',|"",,;:i::x;1ft#'Ilt r

' r

a ross orcontror, is accounted ror as an equity

Derecognizes the assets and liabilities of the subsidiary, the carrying amount of any non-controring interest and the cumulative translation aiff"r.*.r, ...*ded in equity.

lT:il',ffin#Jffi;f,T:,::L''0",",'on

received, rhe fair varue of any invesrmenr retained and

Reclassifies the Parent company's share of components previously recognized in other comprehensive rncome to profit or loss or retained eamings, u, upfffiu,".

SEC Memo 3-2012

In compliance with sEC memorandum circular No.3, series.of 2012, the Group has conducted a study on the impact of an earrv adoption of pFRi 9.' ei.r'ru.rn r .onrr;;r"ti;;;. evatuarion, rhe Group trasteci on rhe impact i,ins s ro,. it"r;n;:-0, ^ea December 3r, "l"pi rherefor". rh.'";;;'roj;d;.i nnun.iur sratemenrs do not reflect irltr'.flrfl:T**orting. the impact or

n*,o.-iv

il'i.r"n, i,i,i."o

SEC Memo 6-201 3

In compliance with SEC r study rhe impacr of the

circular No'6, series of 2013, the Group is has conducted a

",,Jri,ilonlunout

Ihe adoption of the amended PAS 27 do not have ignificant rmpact on the fi nancial statements the entities in the

separate

Financial Stat€ments

amendments affect tsclosures only and have no lmpact on the Group's

Disclosures- Oft!etting Financial and Financiat Liabilities

A reassqsment ofcontrol was performed by the parent Company on all tts interests in

additional enrities that need ro be consolidated or entities to Financial Statements

adoptron will not have an rmpact on the Group's

Disclosure of Interests in Other

financial position or

entlttes

Page 3 I

PERC SEC- I 7Q 2"d Quaner 2013

3.

Cash and Cash Equivatents This account consists of:

Cash on hand and in banks

Short-term investments

30-Jun-2013

3l-Dec-2012

s3,527,949 7,913.471

20,601 .988

$t,020,234

$l r.4il.420

$21

cash in banks earn interest at the prevailing bank deposit rates. short-term deposits are made tbr varying pedods ofup to three months depending onihe immediate cash requirementr C-.""p, and earn interest at the prevailing short-term deposrr rates. "rin.

In June 30, 2013 and December 3 I 2012, the Group , invested $0.6g9 million and $0.g I million, respectively ' to short-term investments with periods more than three months but less than on" y"u..

rr,".a

were presented under advances, prepaid expenses and other currenr assets.

investments

Interest income earned on cash in banks and short-term investments amounted to $0.14g million and $0.51 as ofJune 30, 20l3 and December 3l,2012, respectively.

million,

4.

Financial Assets at FVPL This account consists of: 30-Jun-2013

Marketable equity securities Investment in golf club shares

$

3 I -Dec-20

r24,030

l2

s r 25,s3 I

l7

16.435 $ 140.465

$142.827

Net loss on fair value changes on financial assets at FVPL included in consolidated statements of income amounted to $5,58 l and $24,880 as of June 30, 2ol3 and December 3 r , zo r z, r"sp.ciiveiy.

5.

Receivables - net This account consists of:

Accounts receivable from: Consortium operator Others Interest receivable Less allowance

30-Jun-20 l3

3l-Dec-2012

$2,249,9t2

$2,021,687

8,1

l9

|,969

2t.039

23.7

2,279,862 62.094 t6.976

for

t7

2,047,373 OJ

027

The Group's receivables are mainly. due consortium operator and are due within one year. carrying ^from values as ofyear-end approximate their fair values.

The table below shows the disclosure of reconciliation ofallowance for impairment losses for receivables from a consortium operator:

30-Jun-13 Balances at beginning of year

Effect of forei Balances at end

$65"346

translation

3l

-Dec-12

$61,1 87

4.159

of

$65

Page 32

PERC SEC-l7Q 2"'Quarter 2013

6.

Adrances, prepaid I

n*pffi

nls account consists of

:

Advances to contractors Short-term investments

-

i

30-Jun-13

ent portion

Input VAT Prepaid expenses

Defened financing costs - undrawn ponlon

3-Dec-12

$4,020,851

$3,817,79s

689,356 2,545,512 347,336

709,412

8t4,741 575 6{

176,355

Others

(

s42,498 $6,490.701

Advances to contractor pertain to the down-payment to EEI corporation and various contractors for the construction of power plant in the MGPP. This *iir'i.'apri.a against future bilings in the course of construction. The current portion of $4.02 mirri"n uiJ sli2'miuion December 3 l, 2012, respectivery, which are, esrimated ro be appli;;';gainst progress biilings ''oone year from within reporting date are crassified under

; ;il;;;,;6il

"Advanr"r,

;::frf"T":Htments

pr;;i;.;enses

and other current assets,,.

pertain to monev market placemenrs with maruriries of more rhan three months but

Input VAT is recoverable in future periods.

Prepaid expenses incrude prepaid insurance and professionar fees.

Defened financing cost (DFc) undrawn portion represents the portion of the incidentar costs incu'ed in obtaining the loan pertainins to the undrawn urouni ,. rotal roan. As of December 3r,20r2and June 30' 2 t 13, DFC - undrawn pJrtion urount.d t" ic';;ili;;

oi

$0.

"others" pertain to software 'icenses,

and $0.54 miilion.

advances to emproyees, supplies and deposits.

Page 33

PERC SEC- I 7Q

2no

Quarter 2013

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PERC SEC-l7Q 2no Quarter 2013

8.

Deferred Oil Exploration Costs 30-Jun- I 3

Balance at beginning of year

$6,643,203 t,993,923

lntemal development Reclassification to wells, platforms and

31-Dec-12 $s,831,668

8l t,535

other facilities

Under the SCs entered into with the DoE covering certain petroleum contract areas in various locations in the.Philippines, the participating oil companies (coltectively Lno*n u, contractors) are obtigea to provide, at their sole risk, the services, technologr and financing n.r".rury in the performance oftheir obligations under these contracts. The contractors are also obliged io spend specified amounts indicated in the contract in direct proportion to their work obligations.

However, if the contractors fail to comply with their work obligations, they shall pay to the government the amount they should have spent but did not in direct proportionlo their work obligations. The participating companies have operating Agreements among themielves which govern their rigitr;n; obligations under these contracts.

The full recovery of these deferred costs_ is dependent upon the discovery of from any ofthe petroleum concessions and the success of h.rture

oil in commercial

quantities

deveropment thereof.

9.

Investment Property

As of June 30, 2013 and December 3r,2012, this account consists of land with total carrying value of $3 l.4l 7.

The fair value of the investment prop-erties of the Group amounted to $47,6g3 as ofJune 30,2013 and December 31,2012. The fair values ofthe Group's investment properties have been determined on the basis ofrecent sales-of similar properties in the same aieas as the investment properties and taking into account the economic conditions prevailing at the time the valuations were made.

Except for insignificant amounts ofreal property taxes on the investment properties, no other expenses were incurred, and no income was eamed in relation !o the investment properties in June 30,2013 and December

31.20t2.

lo.

Investment in Navy Road

As

of

peffi

June 30, 20 13 and December 3

t,

20 12, this account consists

of:

Acquisition cost

$260,388 54.032

Advances

3t4,420

Less accumulated

314.420

$Investment in NRDC represents investment in subsidiary due to the Group's 100% holdings in NRDC,s capital stock.

Below is NRDC's financial position as ofJune 30, 2013 and December 31,2012:

Financial Position Current assets

s-

Noncunent assets Allowance for

366,193 366. 193 Page 35

PERC SEC-l7Q 2nd Quarter 2013

1

Total Assets Current liabilities Noncurrent liabilities Total Liabilities Net assets

$As ofJune 30,2013 and December 3l,20|2,NRDC has not commenced commercial operations and has not incurred any expenses as ofJune 30,2013 uno zorz. rnlunag.m.ni-#;;r";" liquidare NRDC and has provided for full impairment losses on tf,i, inu"sirnent.

n..*C.rlj,

I

l.

Advances and

OtGi Xincurrenr

Assets

Advance rent - noncLrrrdfi-o(ion Restricted cash Advances to contractors

q,

30-Jun- 13 11<

3l-Dec-2012 62,457,440

"<"

63,125

63,125

Deferred financing costs - noncurrent Others

on April 23' 2012' the company entered into a Land Lease Agreement (LLA or the Agreement) with the National Power corporation (NPC) and the power ir*. arrr* and Liabirities Management corporation (PSALM) over the MGpp's steamfierd rot in sto. iomar,"eurungur. Under the LLA, the company will rease the steamfield lot for a period of 25 years, extendabl. parties' Advance renlnoncurrert portion pertains iol unott.. 25 years upon mutuar agreement of the to the aduanc" rentar payment paid for the rease agreement' The current portion due in on. y.u, is shown as part of"Advances, prepaid expenses and other current assets" in the consolidated statement offinancial position.

Restricted cash pertains to the Parent company's share in the escrow fund to secure payment and discharge

oflthe Parent companv's obligations

ri".,irg;;r""'"."riliage and offloading (FPSo) contract' The amount was parent companyis deducted fiom the""i"rirt. share on liftinf iro.".o, during the in November 200t u,l"ra il

-a

l;il1;#a; ,l:;;f ."

iiuuiriii.,

il ;;

t.i[ *;;i#;

;ilil,

ar the end

orthe

Other noncurrent assets pertain mainly to defened input VAT.

12. Accounts tayabl"

unf-{c.ru"d E*pEG

30-Jun-13

Accounts payable Accrued interest payable Accrued expenses Dividends payable Withholding taxes payable

$1,294,694 837,089

Others

3l-Dec-20t2 $3,226,210

ztz)zI

683,762 471,287

244,262

260,098

70,6t3 64,0t6

125,261 235.747

30-Jun-t3 s1t2,992

9224,884

Accounts payabre consist ofpayabre to suppliers and contracrors.

Accrued expenses are as follows:

Profit share Professional fees and other fees

39,372 Page 36

3l-Dec-12 91,465

PERC SEC- I 7Q 2nd Quarter 20l3

-3Sick/Vacation leaves Insurance

59,612

67,739

34s

35,770

6r,429

Trust fees

Accrued interest payabre pertams to accrual for interest on roans.

Dividends payabre pertain to uncraimed checks as of June 30, 20 13 andDecember

3

l,

20 l 2.

other payables mainry pertain to accrued security services, utilities and condominium dues.

The Group's accounts payable-and accrued expenses are due within one year. canying values approximate their fair vatues as of June 30, 2013 and o*.riU.,

illirij.

13. Loans Payable (For updarel 30-Jun-13

Loans payable Loans

3l-Dec-2012

$49,537,037

payable

/

'oJJ

on september 26,2011, MGI together with PNoc Renewables corporation and Trans-Asia entered into a $54'7 million omnibus Loan and Security ag.""r.nt-*ith RcBc and Bpr specifica y to partialry finance procurement, construction, operarion and mainten;nc" oi it, g.othr.ral power lll"llllilrl*elopment, As of June 30,2013 and December

lil:t;J;:r'o*riverv.

The loan is pavable

3

l,2OlZ, Mclhas outstanding drawdowns of $49.54 million and $39.95 *itt L.-Jubs"qu"ntry a.u*n u^"i on a cerrain drawdown

The remaining uutuo",

tt-t-Ti:?]Y

within ten (10) years from and after the date of initiar drawdown the signing dare, pavments ro be.made in (r4) semi-annual principar i:*,lt:t^ commencing tlowing on the Inslalhent end of 6th semester liom the date of-fourteen the initiai arawoown, inclusive of a or thirtv-six (36) months. rhe amount oi.roun, pavaure is part ofl noncurrent

;;;;;;;

fi:il;,rn:l'"d

The rate of interest applicable to the loan is fixed for the first five (5) years from the initial drawdown date based on the sum of the prevairing nxed benchm; ;;;.'o" the pricing date and ir,. of 2.5%;o per annum (the "lnitial Interest Rate'). five years r.om ttre date'of thJ firsi i"iili'ar.*oo*", -After rhe inreresr for the remaining 5 years tenor shall be repriced uurrJ on the higher on to trre sumli,h. ,h.n prevailing fixed benchmark rate plus the margin of 2.25%p"r o, tii) the Initiar Interest Rate.

,.g,

u-"r,

Deferred financing costs are incidental costs incurred

in obtaining the loan which includes documentary stamp tax' transfer tax, chattel mortgage, real estate rno.tguga, professional fees, arrangers, f-ee and other out-of-pocket expenses.

Total deferred financing

costs amounted to $1.6 million. As ofJune 30,2013 and December 3l,2012,the portion pertaining to the drawn amount of the loan amounting to $ I .267 million and $ l.0l million is presented as deduction fom the loans payable u..ount'una is amortized over the riie oitt. roan using the effective interest rate method Amortizatitn of defen.a inu*i"g cost will u, ."pir"rt.i untl all necessary activities to prepare the power plant for its intended use are'suUstantially complete.

Page 37

PERC SEC- l7Q

2no

Quarrer 20 | 3

-4Details of unamortized defened financing costs are as follows:

P'rg

L'elered linancing costs on loan ah.r--.._ r.. ! drawn durine

, the

$1,007,835 or'uu/"tJ5

___l393Jr $39'', ' '.

to the undrawn amount of the loan is presented as an asset in the position. As of June 30, zot3 consoridated ana.n"cemue, ll,loJi l",l.jr,.iltion e presented i'' c,rrenr asset and $0.86 under "aau-""r,

pr.ifi'#;;;

i'[irH,,JJ'.','.T,.,X."i:l::1J1",1,'*,,lll,L

'

f;1,,;11ffi",('#r'

o

and other current

#". ,ffi;Tfl.,J,iT:.:il;$:ipment

to be used as power plant site,

Chattel (under ..property, plant and equipment,,)

amounrins

ro

under ,,property, plant and equipment,,) -

_

$0.742 million.

BelowaretheaccumuratedcapitarizedbonowingcostsasofJune30,2013andDecember3l,20l2:

30-Jun- t3

Lnterestonloanspayabl"Balances at the beoinnino

3 I -Dec- 12

^c,,---

Deferred financing Balances at the beginning ofyear the Balances at end of

159,3

Amortization

Thel

5*j

3

8

7,240

33.881

098

t93.2t9

159.338

$ 5,433;784

$2,327,262

t

*::iJ",::gT#.ft:l[::!t!i::TtB$3ffillii:iTil:,:Hlfii,,"

14. Equiry

On February 23,2010, the BOD approved.a

il;T,,lr,fi

,,

i0,

311J,1,

ru5:;

l:t

Stock

Riel5l?ff".ing (SRO). Under o

**n ;i:*'_,"L. tif *litr:l Page 38

"'0

il ;;;

the SRO, the shares 1",

PERC sEc-

"* l7e

2"d

euarrer 20 t3

-)As

of

June 30, 2013 and 273,824,220issued and

31, 2012, capital stock consists of 330,000,000 authorized

and

"r,rr]:::iTl ffi :J,.[1?J,[iil"j;:;::!1,*li1i]l*:1#x,"",,tJ#

*:*]y;:.*#{1",:",,jilifi Capital Stock

The Parent Company's track record ofcapital stock are as follows:

Number August I l, 2004

Add

(deduct)I

25% stock dividend 30% stock dividend

84'253

Number of

of

'606

F3/share

21.063,402 r,595,102

P

3

August 4, 2004

l/share Septcmber 6, 2005

Deduct; Movement December 31, 20ll Deduct: Movement December

A

3

2,t49 273,824,220 2,123

l. 2012

dditional p aid- in Capital

Balance at UegtnniniilGii Stock issuances Balance at end of

2012 $25,244,737

201|

2010

$2s,244,737

$

$25

$2s,244.737

r3,390,875

I1,853.862 737

Dividends The BOD approved the declaration ofcash dividends as follows:

l!, 20 I 2, I o% ;lilo-ttilfr;;;Jdividends

eor.i.t

.

to all stockholders ofrecord as of September 21, 2012 amounting to $643,g3g.

The dividends were paid on Oitober

l7',2012.

A.pr.t.lJ!,20t2, t\%oi$O.Ooz per share cash dividends to all stockholders of record as of Mav l8,20t2amounting ro $643,838. in. OirjA.rli

were paid on June 14,2012.

May.1.7,2011, l0o/oor $0.002 per share cash dividends to all stockholders ofrecord as of

September 20, 201 I amounting to $631,95t.

The dividends were paid on Oitober 14,2011.

Muy.l.7-,

Z0lt, l0% or $0.002

20r2

20ll

$643,838

$_

2010

s_

643,939

|

-

631,95

s-

$62e,r20

_

per share cash

to all stockholders ofrecord as fr-vifgnOs ofJune 16, 20 | I amounting to $629, 120. ff," Oi"lar"J, were paid on July 13, 20 | I .

October 21, 2010,10% or $0.002 per share cash dividends to all stockholders ofrecord as of November 8, 20 I 0 amounting to $63 I ,295. The dividend-s were paid on December 2, 2010.

t.?l1y

23.20t0,20% or $0.004 per share cash dividends to all stockholders ofrecord as of March 15, 2010 amounting to $606,20g.

The

Page 39

-

631,295

606,208 PERC SEC- | 7Q 2"d Quarter 2013

-6dividends were paid on April 5,2010.

appropriated Retai ned Earrungs On January 15, 2009, the BO*D. Ebouri

approved the appropriation of $0.49 million for the development of the

o'fierd in Gabon' in aaaitioi to ttre;;:t;?',iff deveropment ortne pbouri

:l'Hr.:r"JJ#he

parent companv fi!r;;;;il"-iginatv

appropriared amount. has been approved by the

BoD

On July 24,2008, the BOD,

sro,1rri."1",iil';.;."ffi.'"',Tir:'J;::li:iTJiiif:ffi'ilX'l"l;il'"amounringto Total appropriations for the development of Ebouri oilfield.a-s to $2'06 million' Furthei t*punrion

of

ortrrJraii oirnero

fi;:*to

on February t9,20r3, the BoD approved additional

il']i'|lifi:]"

ror rhe parenr companv's

,h.;i;;;

June 30,20l3and December 31,2012

is on-going and is set ro be compreted in

approp^riated retained earnings amounting to $1.09 list orthe commined werrs in cabon amountins ro

Capital Management The primary objective ottnt management is ro ensure that it maintains and healthy capitar ratios in order a strong credit raring s:::l'^t .:oital its to support business and maximize sharehorders, varue.

The Group manages its capitarstructu-re a1! marles adjustments to it, in right of changes in economic conditions. To maintain or adjust- the .uiitut ,tru"tur.,_ the Group may increase its debt from creditors, adjust the dividend pa),ment to shareholders

or issue new shares.

f;:,li"illir,',j.'013'

the Group monitors capital using a debrto-equiry ratio, which is totar riabirities divided

As ofJune 30,2013 and December

3l,2'l2,the

Group,s sources ofcapital are as follows: 30-Jun -20t 3

Loans payable

Additional paid-in canital Retained Earnines stock

3l-Dec-20t2

$48,270,082

$38,948,444 2s,244,737

25,244,737

9,759,815 6,321.533

8,963,497

6,32t.533 s79,473.2t1

$89,596,167

The table below demonstrates the debt-to-equity ratio of the Grouo as of June 30, 2013 and December

)nl)

30-Jun -2013

Total debt Loans payable

Accounts payable and

accrued

expenses

Asset retirement obligation rncome tax payable

Accrued retirement Iiabil Total equity Capital stock Additional paid-in capital

3|

s38,943,444

2,805, 106

s,002,365 237,668

165,612

75,0t5

l3

'18,755

$s l,536.000

s44,337.247

$6,321,533 25,244,73?

25,244,737

39. I

Page 40

I,

-Dec-12

$48,270,082

256,087

3

$6,32 1,533

PERC SEC- I 7Q

2no

Quarter 20 | 3

Retained eamings

Appropriated Unappropriated Cumulative translation

3,149,555 6,6r0,260

adjustment

Noncontroll

2,055,555 6,907,942

(3 17,680)

interest

7

.107

.7

59

778,372 5 807.379

Based on the Group's assessment, the capitar management objectives were met in June 30,20r3 and December 3 l, 20 | 2.

15. Related Party Transactions Parties are considered

to be r€lated if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making nnan.iul uni'op".u,ing decisions.

i:ffiXT.?::.':;T:''ff|,,'inii'::HJ:['J",ft1:,subject

to common contror or signincaniinnuences.

Transactions with related parties consist mainly of unsecured, non-interest bearing advances to subsidiaries, which are currently due and collectible and which will be settled in cash. These ui"un.", ..p.rr.nr expenses incurred by the Parent company in behalfofthe subsidiaries for the wind and geothermal energy projects.

The Parent company's transactions with related parties consist mainly of reimbursements of research costs and payments of management fee, which are recorded under miscellineous income in th" parenr company statements of income. There were no outstanding intercompany balances as of June 30:,;o]and December

3t,2012.

Details ofrelated party transactions are as follows: Related Subsidiaries PetroGreen Resources

party

Nature

Rental income

Amount oftransactions 30-Jun-20f 3t-Dec-2012

3

$-

$11,792

Duc to

30-Jun-2013 3l-Dec-2012

$-

Terms and

Conditions

$-

Corporation Advances

l,l5l $l.l5r

Maibarara

Management

Geothermal ncorporated

income

$77,610

24,004 $35.796 9152,725

Rental income

14,421

Advances

2t.047

Accounts payable

$8r,t59

$ 188. | 93

$-

$-

$52,540

9s5,292

$52,540

ss{ to')

Noninterest

Below are additional O,r.

Advances pertain to the reimbursable exPenses incurred by the Parent company in behalf of its subsidiaries.

Rental income is derived from the sublease agreement between the parent company and its subsidiaries, PGEC and MGI, who, together with the parent company, occupy a single unit in the JMT building.

Allocation ofrental charges is pro-rated based on aciuaiarea occuoied.

Page 4 I

PERC SEC- l 7Q 2"o Quarter 201 3

-8Management income from MGI is based on an annual management fee of $0. l2 million, by virtue of the agreement between Mcl and the Parent company thar rhe lartter will b. p;;;iil;;;nagement services to MGI in exchange for the annual management fee.

Accounts payable to NRDC pertain to the long-outstanding amount owed by the parent company to NRDC as ofJune 30,2013 and December 3 l,2Ol2.

There are no other transactions with any party aside from the above.

IO. OTHERS

a'

The Interim Financial Reporl (June 30, 2013) is in compliance with generally accepted accounting

principles.

b'

The same policies and methods of computation were followed in the preparation of the interim financial report compared to the December 31,2012 Audited Financial

statem;nts.

c'

No unusual item or items affected the assets, liabilities, equity and cash flows of the June 30, 2013 Financial Statements.

d'

Eamings per share is presented in the face of the unaudited statements of income lor the period ended

June 30,2013 and2012.

e'

No significant events happened during the quarter that will affect the June 30,2013 unaudited Financial

statements.

f'

There are no seasonal aspects that had a material effect on the financial condition or results of operation

ofthe Company

g' h'

There is no foreseeable event that will trigger direct or contingent financial obligation that is material to the Company, including any default of acJ.rut.d obligation.

There are no material off-balance sheet transactions, arrangements, obligations and other relationships persons that were created during the period.

ofthe Company with other entities or

i'

There are no changes tl^:,]11,:: tiounts reported in prior periods of the current iinancial year or :f changes in estimates of amounts reported in prioi financial years that could have material effect in the current period.

'

1:lli:of

the company's Additional Paid in capital were issued as srock dividend and paid in March

we are not required to disclose segment information in our financial statements oil operation.

one source ofrevenue which is

because we only have

There are no changes in the composition of the issuer during the interim period, including business combinations, acquisition or disposal of subsidiaries una long term investments, restructuring and discounting operations during the period Our Company has no contingent liabilities or assets during the period.

Page 42

PERC SEC- I 7Q 2nd Quarter 2013

PETROENERGY RESOLTRCES C9ryORATION AND SUBSIDIARI ES SRC 3931u"5;1-*^' RULE 68 AS AMENDED JUNE 30,2013 Philippine

securities and Exchange commission (sEC) issued the amended SRC Rute 68 which consoridar"..Jn. Securities Reguration code Rule y.:.r"0;;"'.rJr'ji"o''"rr"o i" ,r,.

It also prescribed the additionar r,,and,.part rr,,,

i"r"-r,i"" l"a schedure

fi:lilil;'t

required :i":]"fl:l[ttTl;:11*P1"n.and isschedures presented

of the basic financiai

,o,.,n."1.1-""on

ft'n"jpul s.to"kt,oldgr, (oth",

iot'!il,j,'nr

,hun

schedure of advances to

equif

securities as the total

FV'L amounting i0, 20 r3.

assets of the Group as at June

to

with balances above F 100,000 ($2,3 r 5) as at June

Balance at

Collections/

of

Vitt.niGEa

Additions

;ffiH:TJ#ffi'il?:r:Fffi,,?,|I"";Ho*'are ". r-uulslat

bv sRCRure 68, as Amended (20r r) thar are irt.'sic"rd is nor required parr

R;tu;Ail;;;:

rrprov.iliiihicroup

Name Engr. Jose V.

issuers or securities to

for purposes of firing *i,rr

The Group it not t"qud-disclose the financial assets in $0' t4 milrion do nor constirute 5% or more ;i;;;;;;;r

ang

.r""or."iillr"n

d;;.r"il';;

Balance at end of30-Jun- l3

demandabre and are crassined under current assets.

btatgments

ff:illi;":#ilTi:::ill,:"rr:Tivabres

from rerared parties, which are eriminated in the consoridated

Balance Name and Designation

ofdebtor

at

beginning

nruiu**uc.oiili;il."""

Additions

f::.1: collected

Amounrs off

written

Not

Current

Balance at end of

$40,587

$-

$41,73 8

Page 43

$-

40,587 $4

t.738

$-

F

PERC SEC-l7Q 2nd Quarter 2013

l0The Group has an insignifrcant amount of intangible assets as ofJune 30, 2013 amounting ro us$0.037

mi'ion

.

Schedule E. Lons+erm Debt uelow is the schedule of long_term debt ofthe Group as ofJune 30, 2013:

Title oflssue and type

of

obligation

Amount authorized by In Original Curuency - PHp

ffi

Loans payable Less: Unamortized deferred

The Group has no

'

Amount shown under caption portion of

indenture rong-t",rJ"6f;;n ,:y:nt In

USD

F2,140,000,000 $4t53?"0t

Noncurrent portion shown under caption .d"^;#i:ii

the Statement of in the Statlment of FinancialPosition Financialposition $$49,s37,037

ou,ro

r.

Schedulg. G..Cuarantees of Securities of Other Issuers I ne uroup does not have guarantees

of

*.u.itGiiiither

issuers as ofJune 30, 20r3.

Schedule H. Caoital Stock

Number

of

and

reserved for

outstanding

options, warrants,

shares

shown under related balance sheet

authorized 330,000,000

273,824,220

Number

Common Shares

of

Shares

a-s

Title of issue

Number

shares issued

of

conversion and other

Number

of

shares held

by related

Directors, Oflicers and Others 2,

Page 44

il5,010

PERC SEC- | 7Q

27t,709,2t0

2nd

Quarter 2013

or r n,rNcrar-, soDffiNtis ::TrJ*1l As oF JUNE 30, 2013 anit 20r2oNo

r

NDr

nles

cAroRS

or6"ni'i;iT:;rT;

F i nanci a I Soundness I n di cat or

Below are the financial ratios that are relevant to the Group:

Financial ratios Current ratio

30-Jun-13

30-Jun-12

3l -Dec-12

.61:l

10.88: I

6.03: I

0.03:l

0.09:l

0.09:

Total Liabilities Total Stockh older's eqrriry-

1.07: I

0.63: I

0.941:l

Total Assets Total Stockholdrr', .quity

2.07:l

1.63:l

1.941:l

0.44:l

3.03: I

1.50: I

$0.003

$0.006

$0.009

$42.33

$22.86

$16.51

10.21%

23.67%

t8.t1%

I:l

0.55: I

0.83:l

1

4.4

2.93

Total current assets Total current liabilitiei

7

Solvency ratio

Long-term + short+.rm Debr-ro-Equiry Ratio

Asset-to-Equity Ratio

Interest rate coverage ratios

liabilitG

Eamings before interest and taxes Interest expense*

Eamings per share

for

Ner

Income

Net income

Attributable to Equity holders of Parent Company Price Eamings Ratio

Weighted average no.

ofshares Closing price Eamings per share

Retum on revenue

Net income Total revenue

Long

term

debt-to-equity

ratio

Long term debt

Equity

EBITDA to total interest paid

EBITDA*,', Total interest

paid

I Interest expense is

capitarized qs p.art of the consrruction-in-progress **Earnings accounr under ppE. before intirest, tax"s, d"pr"ciati"" ,r'a')r'"rii'"rion (EBITDA)

Page 45

PERC SEC- l7Q 2nd euarter 201 3

I

JUNE 30,2013 Retained Ea Net income based on the face

of

$8,679,204

financial statements

Less: Non-actual/unrealized income net oftax Equity in net income ofan associate/Jv

Unrealized foreign exchanr

anributabre

,r.;:;'.;l;;;*t

suln

1,439,933

- ,., {""..pr

those

Unrealized forex gain (9,384)

Fair value adjustment (marked-to_market loss)

Fair value adjustment of investment properties resulting to Adjustment due to deviation from pFRS/GAAp earnlngs

gain

or adjustments to the -.rru,n.O as a result __-, of _-..4.n transactions accounted for -. certail

Other unrealized gains

under

_

5,624

pFRS

Add: Non-acfual/unrealized losses net oftax Depreciation on revaluation increment 0": to deviation from pFRS/cAAp - toss

lj:lT:,1 adj ustmen t of in vestment oroo.ni, }:::j::l in"1r".

Movement defened tax assets Net income actuaUrealized 1,435,173

Less: Dividend declarations during the year

Totat Ea rn

paren

ings A va ita bte

ro.

riinio end

b;.r; ;;;i;",

:;ffi:

Page 46

$10,114,377

PERC SEC- l7Q

2nq

Quarter 201 3

cn

() ltl

z

l.l Fr

ca

fr

X

tFr

ID

OA caY

EE

frtg

Ele

I a,\ ixd, :

2lz

'trq& .s=F PZ(t .3 Ei

<lFl

,^ ;t

Yt tu '.\ a4t-

PIF -'tF

a\Y

.=

EYQ G|

o.Z

zl= olz Ftf {lE l,/ | x

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l-

l*l tvl

t*l tl

-+ t-t tsl tol

lol t-l

L-J

--------'

Xls xtF vlF

q) (.)

0l l-' frJ | ;.i

B

o

&lp

Ela ral z

6

>lFi (Jl<

.:

I

E]

L: ------------|

th

O ^'' I!

tr

.h

h0

c

(l) b0

ql'.1

Et>

or

IJ./

=El

al9

5tx 'lv st<

rr ;. l,

th-A =4-)

zt> 4la

ztH

trJ

\o

oi U1

G'

\A

sg Ytr

F

i(!

6.g $3 o-: \J

c.)

(\ aa

II]

o

(|r Page 41

PERC SEc-tAQ 2nd Quarter 2013 .l

PETROENERGY RESOURCES eOBPORATION REPORT ON SRO PROCEEDS JUNE 30, 2013 on February 23' 2010, the Bo.^D approved a the period June 28 ro 4,20t0. 'urv

irt.

I:

I stock Righls offering (SRo).

p-.J.

The sRo was undertaken during amounted to $r4.8 mirion.

"iil';il

As-disclosed in the prospectus the. company expects to raise gross.proceeds of approximatery usD r4.g2 mrllron or Php 684'56 Million and after'deiucting rirtine, r;glrou,ion r.., ,..iurrl"toli. o]n ,. orsr+.75 milrion or Php 681'656 million' These proceeds will ue u-sea to-dnun"e the group,s share in the consrnrction of 20MW As of June 30,2013' remaining proceeds amounted to $3.4 million or php 195.42 million.

ilil::':ff3;,::il:'l;ff:::11:;i[**ts;each

expenditure irem where the proceeds were used and rhe

Procee& from the SRO Cl'oss Proceeds [,ess: Usting and registration fees Net Proceeds

$

14,817,328

24,333

t4.792.995

2010,20t1 &

20r2

lst

and 2nd

Qrtr 2013

Lcss: Expenditures DOE awards sgrvice contract

LdJ & stakeholder coordination Ccoscientific studies & res ource ass es s rnent

Land rights acquisition Obtain DENR Clearances & Oher permits

Btablish logistic station land & water supply prepantions Well workover & drilling preparations Work-over of three (3) wells Drilling of two (2) new wells FIow test & bore output nrasurcments Engineering & des ign ofsteany'brine Iin es

9,0t7 7,891

9,017

I,068

8,960

30,295

r,810,057

69,636 1,779,762

69,636

71,886

7l,886

t2,829

12,829

42,492

4n,492

144,789 r,825,811

144,789

568

3,s93,337

t,826,379

t27,251

357,763

3,720,s87

9t,232

448,9s

67,439

Page 48

67,439

PERC SEC- I 7Q

2nd

Quarter 201 3

-5Financing, Gid Impact Study& power Contract

Construction of fluid collection and reinjection system Power Plant General & administrative epenses

Incorporation of MGI Property & equipnrent

Total

t2,405

1,259,261 53,298 1,082.980

t0,770,59s

Remaining Procee& as ofJune 30,2013

12,45

294,837 87.757 633,009

1,s54,09 53,298

|,t70,737

n,403,ffi4

$3J89J92

Remaining Procee& in php

P t95,416J06

Page 49

PERC SEc-l7Q 2no Quarter 2013