PXP Energy Corp., the upstream oil and gas company led by tycoon Manuel V. Pangilinan, is exploring farm-in arrangements for its Service Contract 40 in North Cebu to reinvigorate its portfolio amid dwindling production at its primary oil field.

In a disclosure to the Philippine Stock Exchange on Monday, Mar. 2, the company said it is evaluating potential partnerships for the North Cebu block, subject to commercial terms and funding considerations.

PXP Energy identified the area as critical component of its long-term strategy to offset declines in mature assets.

The push for new investors comes as PXP Energy grapples with the natural depletion of the Galoc field in Northwest Palawan. While Galoc continues to generate operating cash flow, management described it as a mature asset with output levels trending downward.

The decline already weighed heavily on PXP Energy’s 2025 financial performance, which saw a core net loss of ₱50.2 million, widening from the ₱33.3 million loss recorded the previous year.

Financial results were further dampened by volatile global energy market and unfavorable currency movements.

Consolidated petroleum revenues tumbled to ₱49.8 million in 2025 from ₱67 million in 2024. The drop was fueled by a 16.9 percent slide in sales volume to 414,124 barrels, compounded by a 12.5 percent retreat in average crude prices to $70 per barrel. Higher foreign exchange rates also added pressure to the bottom line.

Beyond North Cebu, PXP Energy is also seeking capital to activate SC 80, 81, and 86. These blocks, located in the Sulu Sea and the Octon block in Northwest Palawan, were awarded by the Department of Energy to expand the firm’s footprint.

However, Pangilinan had cautioned that deep-water exploration remains a capital-intensive endeavor, with technical and work commitments requiring an investment of several million dollars.

The company’s most significant potential assets, SC 72 in Recto Bank and SC 75 in the West Philippine Sea, remain frozen under force majeure due to long-standing territorial disputes.

Pangilinan has maintained a hopeful stance that diplomatic progress between the Philippine government and China might eventually allow for exploration. The executive has frequently stressed the urgency of developing these areas to replace the aging Malampaya gas field, which provides a significant portion of the nation’s energy needs.

Despite the headwinds, PXP Energy plans to proceed with SC 88 under the updated contractual framework. Total costs and expenses for the year rose slightly to ₱94.7 million from ₱91.