PXP Energy Corp. has approved the conversion of about ₱561 million in debt into equity in its subsidiary, Forum Energy Ltd., as part of efforts to strengthen the company’s financial position.
The upstream oil and gas firm said the move involves turning outstanding loans into newly issued shares of Forum Energy. The transaction will allow the company to reduce liabilities while increasing its equity stake in the subsidiary.
Under the arrangement, Forum Energy will issue 561 million new common shares to PXP Energy in exchange for the debt owed by the subsidiary. The debt-to-equity conversion effectively removes the loan obligation from Forum Energy’s balance sheet while raising its capital base.
Forum Energy is a key subsidiary of PXP Energy and holds interests in several offshore petroleum assets in the Philippines, including areas located west of Palawan that are believed to contain significant oil and gas reserves.
The conversion forms part of PXP Energy’s strategy to support the operations and financial stability of its subsidiary while maintaining progress on its exploration projects. By replacing debt with equity, the company aims to improve the financial structure of Forum Energy and strengthen its capacity to pursue energy exploration activities.
Industry observers note that debt-to-equity conversions are commonly used by companies to reduce leverage and improve balance sheets, especially in capital-intensive industries such as oil and gas exploration.
PXP Energy continues to focus on developing energy resources in the Philippines, while navigating regulatory and geopolitical challenges that have affected exploration projects in recent years.