PNOC Exploration Corporation

February 8, 2000 PSE CIRCULAR FOR BROKERS NO. 279-00 SUBJECT : PNOC Exploration Corporation Attached is PNOC Exploration Corporation's ("PECB") comprehensive corporate disclosure on the following: 1. The Corporation 2. Primary Line of Business 3. History of amendments of Articles of Incorporation and By-Laws 4. Capital Structure 5. Ownership Structure 6. Details of Debt-to-equity Conversions and Private Placement 7. Board of Directors and Executive Officers 8. Material Contracts 9. Milestone in Operation 10. Operational Highlights as of the quarter ended September 30, 1999 11. Legal Proceedings 12. Financial Highlights For your information. cdll (SGD.) MARIA ISABEL T. GARCIA OIC, Listings & Disclosure Group COMPREHENSIVE CORPORATE DISCLOSURE OF PNOC EXPLORATION CORPORATION THE CORPORATION PNOC Exploration Corporation, (PNOC-EC, Company, Corporation), a subsidiary of Philippine National Oil Company created under P.D. 334, as amended and a government owned and controlled corporation was registered with the Securities and Exchange Commission (SEC) under Registration Certificate No. 67111 on April 20, 1976. llcd PRIMARY LINE OF BUSINESS The primary purpose of the Company is: (Section 2, Articles of Incorporation) "To prospect, explore, dig and drill for, exploit, extract, produce, purchase or otherwise acquire, store, hold, transport, use, experiment with, market, distribute, exchange, sell or otherwise dispose of, import, export, and handle, trade and generally deal in, refine, treat, reduce, distill, manufacture and smelt, any and all kinds of petroleum and petroleum products, oil, gas and other volatile substance, orzakerite, sulphur, clays, bituminous substance, carbon, carbon Mack, hydrocarbon substances, phosphates, nitrates, coal, ores, minerals and mineral substances of all grades, kinds, forms, descriptions, and combinations, and in general subsoil products and subsurface deposits of every nature and description and the products and by-products which may be derived, produced, prepared, developed, compounded, made or manufactured therefrom and substances obtained by mixing any of the foregoing with other substances." HISTORY OF AMENDMENTS OF ARTICLES OF INCORPORATION AND BY-LAWS On April 20, 1976, the authorized capital stock of the Corporation was Three Hundred Million Pesos (PHP 300,000,000.00) divided into Three Hundred Million (300,000,000) Shares at PHP 1.00 par value per share. LexLib On June 30, 1976, the SEC approved the amendment to Article VII of the Articles of Incorporation changing the par value from PHP 1.00 to 0.01 and increasing the number of shares from Three Hundred Million (300,000,000) shares to Thirty Billion (30,000,000,000) shares. Furthermore, the Thirty Billion (30,000,000,000) shares was further divided into Class "A" (180,000,000,000) shares valued at One Hundred Eighty Million Pesos (PHP 180,000,000,000.00) and Class "B" (12,000,000,000) shares valued at One Hundred Twenty Million Pesos (PHP 120,000,000,000.00). On July 27, 1981, the SEC approved amendments to the Corporation's By-Laws, particularly Article II and IV, and the Corporation's Articles of Incorporation, Article VI, increasing the number of the members of the Board of Directors from nine (9) to eleven (11). On February 22, 1984, the SEC approved amendment to Article VII of the Articles of Incorporation increasing the authorized capital stock from Three Hundred Million Pesos (PHP 300,000,000.00) to One Billion Two Hundred Million Pesos (PHP 1,200,000,000.00), divided into One Hundred Twenty Billion (120,000,000,000,000) shares of the par value of PHP 0.01 per share. On August 29, 1995, the SEC approved amendments to Article VI of the Articles of Incorporation and Article II and IV of the By-Laws reducing the number of directors from eleven (11) to nine (9). Pursuant to PSE Circular No. 308, Series of 1996 dated August 12, 1996, PNOC-EC amended its Articles of Incorporation to reflect the new par value of PHP 1.00 per share (from PHP 0.01 par value per share), which was approved by the SEC on January 12, 1998. On August 19, 1998, the SEC approved the increase in authorized capital stock from One Billion Two Hundred Million Pesos (PHP 1,200.000,000.00) to Three Billion Five Hundred Million Pesos (PHP 3,500,000,000.00) (Article VII, Articles of Incorporation). SEC also approved amendments to PNOC-EC's Secondary Purposes (Article II, paragraphs IV and VII) of the Articles of Incorporation. LibLex CAPITAL STRUCTURE The authorized capital stock of the Company is Three Billion Five Hundred Million Pesos (PHP 3,500,000,000.00) equivalent to Three Billion Five Hundred Million (3,500,000,000) shares at PHP 1.00 par value as approved by the SEC on August 19, 1998. All the shares of the capital stock of the Corporation shall be common shares, all with the same rights and privileges, with a par value of PHP 1.00 per share. The common shares are divided into Class "A" shares consisting of Two Billion One Hundred Million (2,100,000,000) shares valued at Two Billion One Hundred Million Pesos (PHP 2,100,000,000.00), which shall be issued solely to the citizens of the Republic of the Philippines. Class "B" shares consisting of One Billion Four Hundred Million (1,400,000,000) shares valued at One Billion Four Hundred Million Pesos (PHP 1,400,000,000.00), may be issued to citizens of the Republic of the Philippines or to aliens. The proper distribution of PNOC EC's then 1,200,000,000 authorized capital stock was 720,000,000 Class "A" shares and 480,000,000 Class "B" shares (and not 180,000,000 Class "A" shares and 1,020,000,000 Class "B" shares). The originally reported 180,000,000 Class "A" shares and 1,020,000,000 Class "B" shares was inaccurate and had to be corrected accordingly. Hence, there was a proper allocation of 540,000,000 Class "B" shares to Class "A" shares. The allocation of shares was natural because the authorized capital stock of PNOC EC should maintain a ratio of 60% Class "A" shares and 40% Class "B" shares in order to comply with Section 9, Article XIV of the 1987 Constitution inasmuch as PNOC EC is an exploration company. Authorized Capital Stock, Issued and Outstanding Capital Stock, Treasury Shares, Paid-Up Capital Stock Of the present authorized capital stock, PHP 3,500,000,000, One Billion Nine Hundred Twenty Seven Million (1,927,000,000) shares are issued and subscribed capital stock. The outstanding capital stock is One Billion Nine Hundred Twenty Six Million Seven Hundred Fifty One Thousand Two Hundred (1,926,751,200) shares, which are fully paid. Treasury shares are Two Hundred Forty-Eight Thousand Eight Hundred (248,800) shares. Ownership/Stockholder The Philippine National Oil Company (PNOC) owns 99.77% of the Corporation while the public stockholders own the balance of 0.22%. The Corporation has 0.01% treasury shares. Hereunder is the ownership structure of the Corporation: 1. PNOC Class "A" 1,447,000,000 shares Class"B" 475,532,415 shares 1,922,532,415 shares 99.77 % 2. Public 4,218,785 shares 0.22 % 3. Treasury Shares 248,800 shares 0.01 % 1,927,000,000 shares 100 % Unsubscribed Capital Stock The Corporation has a total of 1,573,000,000 unsubscribed capital stock out of the 3,500,000,000 authorized capital stock. llcd Shares to be listed with PSE On December 22, 1976, the Corporation filed an application for the listing of Six Billion (6,000.000,000) shares at PHP 0.01 par value per share (now 60,000,000 shares at PHP 1.00 par value per share) which was approved by the Board of Governors of the Manila Stock Exchange on January 5, 1977. Pursuant to PSE Listing and Disclosure Rule, all issued and outstanding shares should be listed. Of the 1,927,000,000 issued and outstanding shares, only 60,000,000 Class "B" shares were listed. Hence, PNOC-EC is applying for the listing of 1,867,000,000 unlisted shares. Of the 1,867,000,000 unlisted shares, PNOC-EC is applying for the listing of 1,447,000,000 Class "A" shares and 420,000,000 Class "B" shares in compliance with PSE Rule that "all issued and outstanding shares should be listed". Shares Shares Modes of Issuance (@ PHP (@ PHP Amount Reference/Remarks 0.01/Share) 1.00/Share). A. Debt to Equity Year 1998* 77,567,127,100 775,671,271 775,671,271 Board Res. # 11 S'98 1998* 93,166,800 931,668 931,668.00 Board Res. # 20 S'98 1998 575,000,000 575,000,000.00 Board Res. # 22 S'98 1998 57,000,000 57,000,000.00 Board Res. # 42 S'98 1999 95,000,000 95,000,000.00 Board Res. # 21 S'99 B. Private Placement Year 1976 12,000,000,000 120,000,000 120,000,000.00 Original Subscription by PNOC 1976 633,496,100 6,334,961 9,334,961.00 1976 9,496,511,800 94,965,118 94,965,118.00 1982 3,000,000,000 30,000,000 30,000,000.00 Original Subscription by PNOC 1984 8,800,000,000 88,000,000 88,000,000.00 Add'l. Subscription by PNOC 1986 1,400,000,000 14,000,000 14,000,000.00 Add'l. Subscription by PNOC 1986 1,009,698,200 10,096,982 10,096,982.00 Add'l. Subscription by PNOC 114,000,000,000 363,397,061 363,397,061.00 TOTAL 1,867,000,000 1,867,000,000.00 * Pertains to prior year's transactions which were formally documented only in 1998. Board of Directors and Executive Officers As of date, the following are the incumbent directors and executive officers of PNOC-EC: LexLib Ramon V . Mitra, Filipino, 71 years old, formerly served as Senior Assistant to the Mayor of Manila; Assistant to the Chairman of the Monetary Board, Central Bank of the Philippines; Special Assistant to the President. He was at one time a Foreign Service Officer with assignments in Washington, D.C. as Press Attache, United Nations, NY as Legal and Political Officer. He also served as Representative for Palawan; Senator of the Philippines; Member of the Parliament for Palawan. He also became the Chief Negotiator of the Government Panel on Cease-fire with the NDF-CPP-NPA, Secretary of Agriculture, Representative of the Congress of the Philippines, Second District of Palawan. He was the founding president of the Laban ng Demokratikong Pilipino and Speaker of the House of Representatives, Congress of the Philippines prior to his election as PNOC-EC Chairman on August 24, 1998. Rufino B . Bomasang, Filipino, 59 years old, formerly served as Senior Adviser to the Philippine Gas Office; Undersecretary for Operations of the Department of Energy; Acting Executive Director of the Office of Energy Affairs; General Manager of PNOC Coal Corporation and other coal subsidiaries, Chief of the Coal and Uranium Division of the former Ministry of Energy and Manager for Development/Production of the Energy Development Board while concurrently serving as Manager for Engineering and Geology of the old PNOC EDC (Coal Division). He was elected President of PNOC-EC effective June 10, 1996 and yearly thereafter. Pedro T. Santos , 70 years old, Filipino, is currently a Consultant at Department of the Interior and Local Government (DILG). He is a Legal Counsel of 22 firms in the practice of the legal profession. He was elected Director of PNOC-EC on July 15, 1998. Augusto B. Catindig, 57 years old, Filipino, held the position as District Sales Manager of Johnson and Johnson Philippines and later became the Regional Sales Manager of the same company. At present, he is the President and General Manager of KARJ Marketing, a family corporation. He was elected Director of PNOC EC on September 19, 1999. Rafael G. Mangubat, 61 years old, Filipino, graduated with a degree of Bachelor of Science in Civil Engineering at Polytechnic Colleges of the Philippines. He was elected Director of PNOC EC on September 19, 1999. Jose M. Asistio, 59 years old, Filipino, a Mechanical Engineer and Businessman. He was elected Director of PNOC-EC on September 19, 1999. Lourdes Ll. Pimentel, 61 years old, Filipino, served as Dean of Women of Xavier University, Cagayan de Oro City, Guidance Counselor of St. Mary's College; and a Placement Director of Ateneo de Manila. She was also active in social and civic projects. She was elected Director of PNOC-EC on July 17, 1998. Luis P. Poblete . 68 years old, Filipino, is currently a Director of Petron Corporation and PNOC EC and Chairman of Filoil Development & Mgt. Corporation. His career evolved in the shipping and petroleum industry, specifically PSTC, (a PNOC subsidiary) and Petron Corporation, a semi private corporation. He was elected Director of PNOC-EC on July 15, 1998. Telesforo A. Unas, 72 years old, Filipino, formerly served as a Vice-Mayor of Maragundon, Cavite, Vice-Governor for the Province of Cavite and Congressman for the 9th and 10th District of Cavite. He is also a member of the Integrated Bar of the Philippines. He was elected Director of PNOC-EC on July 17, 1998. prcd Rafael E. del Pilar, 48 years old, Filipino, is the Vice-President/COO and Treasurer of PNOC EC. He also worked as a Geologist/Geophysicist, Senior Geophysicist, Chief Geophysicist and Division Manager at PNOC-EC. He served the PNOC-EC Board as a Director from 1993 to 1994. Elpidio M. Gamboa, Jr ., 53 years old, Filipino, presently the General Counsel and Corporate Secretary of PNOC-EC. He is also the Corporate Secretary of PNOC since 1992. Stock Transfer Agent The stock transfer agent of PNOC-EC is the Philippine National Bank - Trust Banking Group (PNB-TBG). Auditor As a government owned and controlled corporation, the state auditor, Commission on Audit (COA), audits PNOC-EC. List of Top 20 Stockholders The number of PNOC-EC Stockholders of record as of December 31, 1999 was 1,399. cdlex Top 20 Stockholders as of December 31, 1999 are as follows: 1. PNOC 2. Guillermo Dychiao 3. Vicente Dychiao 4. Santiago Sio Soy Une 5. Romeo Espino 6. Delfin Go 7. James Go 8. Alexander Onglatco 9. Francisco Villanueva 10. George U. Young, Jr. 11. George K. Young 12. George Ka Siong Tiu 13. Mary Uy Lui 14. The Best Company, Inc. 15. Sergio Barrera 16. Josephine Chua 17. Jacinto Galang 18. Minerva Javier 19. Antonio Nazareno 20. Gloria S. Pe Dividend Declaration History The Company paid out PHP 3.2 million in cash dividends in 1996 and PHP 2.01 Million in cash dividend in 1999. Materials Contracts The following is a brief description of the material contracts entered by the Corporation for the last two (2) years: Memorandum of Agreement between PNOC-EC and Philippine International Trading Corporation This agreement was executed on 15 August 1997 between PNOC-EC and Philippine International Trading Corp. Its objective was to enable Philippine Companies to participate in the development of certain oil fields in the South of Iraq, and involvement of Philippine Companies in the exploration and development of an oil block in the western desert of Iraq under a production sharing agreement with Iraq Ministry of Oil. Deed of Assignment PNOC-EC, DOE (representing the Govt. of the Republic of the Philippines), Philodrill Corporation, Alsons Consolidated Resources, Inc., Anglo-Phil. Holdings Corp., Basic Consolidated Inc., and Vulcan Industrial and Mining Corp., Geophysical Survey and Exploration Contract (GSEC-98) The Geophysical Survey and Exploration Contract (GSEC-98) was executed on 23 June 1998 between the Government of the Republic of the Philippines as represented by Department of Energy and GSEC-98 consortium consisting of Philodrill Corporation, Alsons Consolidated Resources, Inc., Anglo-Phil. Holdings Corp., Basic Consolidated Inc., Vulcan Industrial and Mining Corp., and PNOC-EC. Above mentioned companies hereinafter referred to individually as "Party" or collectively referred to as "Parties". The objectives of Geophysical Survey and Exploration Operations includes the delineation's of potential oil and gas bearing structures and/or the drilling of exploratory wells to detect the possibility of the existence of oil and gas in potential bearing structures. Co-Operatorship Agreement This agreement was executed on January 1998 between Globex Far East, Basic Petroleum and Minerals, Inc., Oriental Petroleum and Minerals Corporation, Petrofields Exploration and Devt. Company, Inc., Alsons Consolidated Resources, Phoenix Energy Corporation, Southwest Resources, Inc., Seafront Resources Corporation and PNOC-EC for Geophysical Survey Contract (GSEC-76) to conduct certain geophysical (seismic survey) work and to drill on exploration well as required under the Contract. Milestone in Operation The PNOC Exploration Corporation (PNOC-EC) is the oil and gas exploration subsidiary of the Philippine National Oil Company (PNOC). It was first created as a department under PNOC in April 1975 before being incorporated as a subsidiary and registered with the Securities and Exchange Commission (SEC) under Registration Certificate Number 67111 dated April 20, 1976. Its primary purpose is to explore, exploit and develop oil, gas and other energy resources. Moreover, it can purchase or otherwise acquire, operate and maintain all kinds of plants, warehouses, terminals, docks, pier wharves and other water-work facilities. On August 19, 1998, the SEC approved the Company's additional secondary purposes and their activation-mainly: a) expanded operation of the Energy Supply Base (ESB), and b) generation, co-generation, transmission, buying, selling and distribution of electric power. The Company's current business interests are in natural gas development, petroleum exploration and production; integrated coal development and energy supply base operation. llcd PNOC-EC was created initially with the mission of planning and implementing PNOC's oil exploration program and giving it the flexibility for joint venture undertakings. The stakes were high at the outset because there were not too many investors in the industry and few major exploration works were done to determine the hydrocarbon bearing potential of rock formations in several parts of the country. In fact, multinational companies did most of the preliminary explorations dating back to the late 50's and 60's. With PNOC-EC entering the industry, it assumed most of the inherent risks as sole operator but enabled the government to gain valuable geological and geophysical information through extensive studies and surveys of potential oil-bearing Philippine basins. This initial pioneering paved the way for PNOC-EC to discover in the eastern portion of Mindoro a sub-basin that was previously unknown to both local and foreign geologists. PNOC-EC can also be credited for staking it out in the Cagayan Valley Basin when all other exploration companies looked the other way. This led to the drilling of the San Antonio-I well in Isabela in 1980 and the eventual operation of the country's first and so far, only gas-fired power facility the San Antonio Gas Power Plant (SAGPP) in Echague, Isabela. cdlex This three-megawatt power facility uses environmentally clean natural gas to generate and supply electricity to at least 10,000 households in the three towns of Echague, Jones and San Agustin and part of Santiago City. The plant is the model for utilization of small gas fields in the country. PNOC-EC's exploration activities also resulted in an oil discovery when the company, in a consortium with other exploration firms, drilled and flowed about 300 barrels of oil per day from the Maniguin-2 well on Maniguin Island, Antique. The discovery is regarded the first significant oil find outside of Northwest Palawan. PNOC-EC also gained ownership, management and operation of ESB from Petron Corporation, which was able to turn around into a profitable undertaking. The base facility, located in Barrio Mainaga, Mabini, Batangas, is accessible to major shipping routes and provides ship-berthing facilities, ventilated warehouses, spacious supply yards, bulk storage facilities and the use of transport and cargo-handling equipment for exploration and commercial companies in the Philippines. As a whole, PNOC-EC is widely recognized for its involvement and experience in Philippine sedimentary basins and engages in drilling and seismic operations. It has provided technical and professional services to local and foreign companies in the form of basin evaluation studies, surveys, seismic data processing and interpretation, well planning and drilling management, reservoir engineering, log analysis and well completion. cdll From a company which began as a frontier basin explorer back in 1976, PNOC-EC has accumulated new and important information in six previously unexplored and underexplored Philippine sedimentary basins. PNOC-EC currently serves either as lead operator or joint venture partner in eight dominantly offshore areas covered by Philippine geophysical survey and exploration contracts. The company's head office is located in Fort Bonifacio, Taguig, Metro Manila. And as part of the company's recent diversification thrusts, PNOC-EC is exploring with the aim of developing a lignite deposit and minemouth power plant in Cauayan, Isabela. The undertaking represents PNOC-EC's first major involvement in the local coal industry and the Philippines' first in the area of developing and using its still untapped lignite (brown coal) reserves for minemouth power generation. It can then be said that PNOC-EC has transformed into a more holistic energy company with business interests now spanning natural gas development, petroleum exploration and production, integrated coal development and energy supply base operations. cdll The following are the Operational Highlights of the Corporation as of the quarter ended September 30, 1999: A. Service Contract No. 37 San Antonio Gas Field, Cagayan Valley For the quarter ended September 30, 1999, the San Antonio Power Plant generated 1,878.66 MWH of energy. Gas production during the period reached 32.88 MMSCF. Cumulative gas production since 1994 is 1,410.63 MMSCF, while cumulative energy generation is 73,306.86 MWH. Power Plant was on shutdown since August 14 due to mechanical problems in the generator. Repair of the generator at Asia Brown Boveri (ABB) is expected to be completed by 2nd week of October. It is noted that the generator was donated by Petro-Canada for testing purposes and the unit was not designed for continuous use. B. GSEC 73 Cotabato Basin Spudded SSB-1 well and reached total depth of 2,000 ft. in August. Completed flow testing in the same month with a flow rate of approximately 200,000 cu. ft. of gas per day. Spudded SSB-2 well and reached total depth of 1,701 ft. in September. Completed flow testing in the same month with a flow rate of approximately 270,000 cu. ft. of gas per day. PNOC EC shall conduct Extended Well Test (EWT) on both wells by October. C. GSEC 88 Offshore Mindoro (Maniguin) Farm-out efforts are ongoing. D. GSEC 76 Ragay Gulf The DOE approved in September the consortium's request for the extension of the moratorium on the GSEC term effective 20 October 1999 to 20 July 2000. D. GSEC 84 Babuyan Channel (Fuga) PNOC EC formally advised Fuga Island Holdings, Inc. (FIHI) in September of its intention to invoke the DOE's right to exercise the power of eminent domain should FIHI continue to delay the negotiations on access to Fuga Island. The Republic of the Philippines through DOE and PNOC EC shall file an easement case against FIHI by October. F. Natural Gas Projects New Zealand Partly-Funded Project Completed study of potential gas demand based on the gas market survey in Southern Luzon and the National Capital Region in September. PNOC EC shall present the results of said study to PNOC Investment Appraisal Committee (IAC) by October. SC #38 Camago-Malampaya Project PNOC EC, in coordination with Lehman Brothers (LB), completed the due diligence report and valuation study (i.e. project valuation, risks, contractual commitment and funding requirement) in July 1999. Negotiations for the entry terms of PNOC EC in Malampaya Upstream project with Shell will commence in October 1999. G. Energy Supply Base (ESB) ESB generated total revenue of PHP14.33 million for the third quarter of 1999. Per business category, pier accommodation and space rental have generated a combined revenue of PHP12.79 million or 89.25% total revenues during the period. ESB accommodated 70 vessels in its pier facilities, and warehouse occupancy averaged 90.73% per month during the third quarter. H. Integrated Coal Mining and Minemouth Power Plant Project In line with the Phase 2 infill drilling, drill hole location survey commenced in September 1999. As of end-September, completed surveying of 31 drill hole locations out of the 72 programmed. Phase 2 infill drilling will commence in October 1999 and is expected to be completed by end-December, 1999. I. Other Exploration Projects (EC as Non-operator) Domestic SC 42 (former GSEC 77) Northwest Palawan Geological and Geophysical studies/evaluation of the Pagasa and North Coron prospects are ongoing. prcd GSEC 98 Onshore Mindoro The DOE denied the request of the consortium for a 2-year extension of the GSEC term. GSEC 78 South Cebu The term of the current GSEC expired in July 1999. The DOE has denied Stirling Resources' request for further extension of the GSEC term. Overseas Iraq In September 1999, PNOC EC submitted the draft Joint Venture Heads of Agreement to Gulf Resources for their review. Legal Proceedings The following are the pending litigations as of June 30, 1999 involving the Corporation: 1. Criminal Case No. 1901, People of the Philippines vs. Felimon F. Joson, 1st MCTC, Mabini-Tinglong, Mabini, Batangas. This is a complaint filed last December 22, 1998 against Mr. Joson arising from his issuance of a check in the amount of PHP 100,000.00 Philippine Currency, which was drawn against insufficient funds (DAIF) . 2. Criminal Case No. 1902, People of the Philippines vs. Felimon F. Joson, 1st MCTC, Mabini-Tinglong, Mabini, Batangas. This is a complaint filed last December 22, 1998 against Mr. Joson arising from his issuance of a check in the amount of PHP 100,000.00, Philippine Currency, which was drawn against insufficient funds (DAIF) . 3. Criminal Case No. 1903, People of the Philippines vs. Felimon F. Joson, 1st MCTC, Mabini-Tinglong, Mabini, Batangas. This is a complaint filed last December 22, 1998 against Mr. Joson arising from his issuance of a check in the amount of PHP 100,000.00, Philippine Currency, which was drawn against insufficient funds (DAIF) . 4. Criminal Case No. 1904, People of the Philippines vs. Felimon F. Joson, 1st MCTC, Mabini-Tinglong, Mabini, Batangas. This is a complaint filed last December 22, 1998 against Mr. Joson arising from his issuance of a check in the amount of PHP 100,000.00, Philippine Currency, which was drawn against insufficient funds (DAIF) . 5. Criminal Case No. 1905, People of the Philippines vs. Felimon F. Joson, 1st MCTC, Mabini-Tinglong, Mabini, Batangas. This is a complaint filed last December 22, 1998 against Mr. Joson arising from his issuance of a check in the amount of PHP 100,000.00, Philippine Currency, which was drawn against insufficient funds (DAIF) . cdll 6. Criminal Case No. 1906, People of the Philippines vs. Felimon F. Joson, 1st MCTC, Mabini-Tinglong, Mabini, Batangas. This is a complaint filed last December 22, 1998 against Mr. Joson arising from his issuance of a check it the amount of PHP 568,230.95, Philippine Currency, which was drawn against insufficient funds (DAIF) . 7. Criminal Case No. 1907, People of the Philippines vs. Felimon F. Joson, 1st MCTC, Mabini-Tinglong, Mabini, Batangas. This is a complaint filed last December 22, 1998 against Mr. Joson arising from his issuance of a check in the amount of PHP 448,006.99, Philippine Currency, which was closed account . 8. Civil Case No. 142, PNOC-EC vs. AALTAPHIL, This is a case for Unlawful Detainer with sum of money and was filed before the Municipal Circuit Trial Court of Tangloy, Mabini, Batangas. 9. Civil Case No. 11-2292, Republic of the Philippines (thru the Department of Energy and PNOC EC, as Operator of GSEC 84 Consortium) vs. Fuga Island Holdings, Inc., RTC, Aparri, Br. 9. This is a case filed by the Republic thru DOE and PNOC EC, in the latter's capacity as Operator of GSEC 84, seeking the issuance of a Court Order to gain access to Fuga Island to conduct exploration and drilling activities. FINANCIAL HIGHLIGHTS 1996 1997 1998 1999 (unaudited by COA) Revenue 41,184 37,366 41,467 46,032 Net Income 6,773 2,190 4,025 5,279 Current Assets 99,916 101,086 165,981 137,027 Fixed Assets 99,916 101,086 165,981 137,027 Total Assets 1,453,862 1,619,080 1,812,013 2,003,107 Current Liabilities 40,768 47,954 22,978 115,791 Total Liabilities 411,929 575,506 23,039 115,852 Total Stockholders Equity 1,041,934 1,043,573 1,788,974 1,887,249 Current Ratio (B/A) 16.45% 5.86 9.71% 11.47% PNOC EXPLORATION CORPORATION SCHEDULE OF EXPENSE/ACTIVITIES/PROJECTS UNDERTAKEN FROM APRIL 1976 TO DECEMBER 1998 (Amounts were rounded to nearest thousands) Year Particulars Amount (PHP) 1976 Deferred Exploratory Development Expenses* 34,300,000.00 Purchased of Fixed Assets** 7,200,000.00 1977 Deferred Exploratory and Development Expenses* 42,900,000.00 1978 Deferred and Exploratory and Development Expenses* 27,000,000.00 Purchased of Fixed Assets** 1,400,000.00 1979 Deferred Exploratory and Development Expenses* 33,200,000.00 Purchased of Fixed Assets** 500,000.00 1980 Deferred and Exploratory and Development Expenses* 50,100,000.00 1981 Deferred and Exploratory and Development Expenses* 35,100,000.00 1982 Deferred Exploratory and Development Expenses* 59,200,000.00 Purchased of Fixed Assets** 1,200,000.00 1983 Deferred Exploratory and Development Expenses* 121,200,000.00 Purchased of Fixed Assets** 3,600,000.00 1984 Deferred Exploratory and Development Expenses* 146,500,000.00 1985 Deferred Exploratory and Development Expenses* 47,700,000.00 1986 Deferred Exploratory and Development Expenses* 18,000,000.00 1987 Deferred Exploratory and Development Expenses* 25,500,000.00 1988 Deferred Exploratory and Development Expenses* 26,500,000.00 1989 Deferred Exploratory and Development Expenses* 36,700,000.00 1990 Deferred Exploratory and Development Expenses* 77,900,000.00 1991 Deferred Exploratory and Development Expenses* 32,000,000.00 1992 Deferred Exploratory and Development Expenses* 49,900,000.00 1993 Deferred Exploratory and Development Expenses* 91,500,000.00 Purchased of Fixed Assets** 40,400,000.00 Investment in Joint Venture Projects*** 65,300,000.00 1994 Deferred Exploratory and Development Expenses* 105,100,000.00 Purchased of Fixed Assets** 12,400,000.00 Investment in Joint Venture Projects*** 55,900,000.00 1995 Deferred Exploratory and Development Expenses* 84,900,000.00 Purchased of Fixed Assets** 20,600,000.00 Investment in Joint Venture Projects*** 82,200,000.00 1996 Deferred Exploratory and Development Expenses* 57,600,000.00 Purchased of Fixed Assets** 7,500,000.00 Investment in Joint Venture Projects*** 64,300,000.00 1997 Deferred Exploratory and Development Expenses* 93,400,000.00 Purchased of Fixed Assets** 16,200,000.00 Investment in Joint Venture Projects*** 62,200,000.00 1998 Deferred Exploratory and Development Expenses* 65,000,000.00 Purchased of Fixed Assets** 9,300,000.00 Investment in Joint Venture Projects*** 20,000,000.00 1999 Deferred Exploratory and Development Expenses* 76,200,000.00 Purchased of Fixed Assets** 5,400,000.00 Investment in Joint Venture Projects*** 13,400,000.00 Total 1,927,000,000.00 * Refers to deferred operating expenses of the company such as materials and supplies, purchased services, repairs and maintenance, salaries, etc. ** Pertains to the capital expenditures of the company such as office furnitures/equipments, transportation equipment, general facilities and buildings, etc. *** Pertains to the company's investment in various joint venture projects with other companies for oil and gas exploration and development in the country and abroad.