petroenergy-sec-17-a-report-2016 by Philippine Integrated Advertising Agency, Inc.

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no,31&. ff,h. ' mP4. n In oNand r*o HlndEd rriny rwo lid 3enm pesos (f6ee,5r5,2r2

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oal

l]ld FiT paym46

P&osolar .ompr.rd .hc leat vdiabte Rei.wabte Eresy (vRr) @. lirh Nccp for $r rspp i6r 1016 ro rh€ onplisnft of lhe on{ift et(ric,L srtngs ro phitippine cdd cone

0i . 0r,

69 kv swir.hiig sbrion. connsi

*F...- v,;". .,. - r. d is 67,193

Mvh,

Fv.ue or

ljld

Enqy c.n e cotrnd

No.

roq@dt Gdnr<hnop:d\T!Ik(ctr1

Il':"r'rD

-k'- '

9:.l"t1:1

b,"

on Ene*db 6sgy

rck., ,

:' :':.."""1',:'

Lr.en,e.

eqe.b.

ruas Bor, &,!ro ts

Da-rF

:6!oof n.reDl,r.mk\sr ion a ne{ srs nedod ws pu hh

hnoi|qh,JbAe|oF

efre

oil. In m.rfon

Ara$t rminaion or rh. ma*dins m-D*d BEn sd

Rabi

ase

rishi rmm Mo b jlry,0r5.

b mdini4 Ev€nus

ad s.ryic$ AsF.med (cospA)

cd$n hd a cnde er; rclemqi *idj rodr sa ...h"'|..""",.dd"k'p.l",,,Dl|-01. rhe

Phr:iqr rmf$ oflhe oit *a elfel ofloadincves$r (Fpso)ro'hr buyersojl bnkd

F0'

'lr

lhc rod Poq. "oR

IraF,i

sincl! block

otrcd

by th.

For rh. oil inings, rhese For Maibdtra 20

gov.nheii

and have ro .ome up

sord ro a sinste buyer

c.orhem.t Po*s Plen y.m. *hcdn TmsAsi. willbtryr

rirh rh. b6! p

-n..o h. s,db^

coD.aD rndrD)no'sn€n.na rsdmdLi.N'ehi\

.""]-til,T-t

tr'11!'" ". *

?ot -

a,,.."_.." v*",.,:"-._,,""

fq s eoridih.q r-dp"o.,pPr.

illalllljI.s0 oftq sbrehord€n re ate

heins

crefu y ob$r.d

eed{eisreeftrrrober@-'\r

0.70".o,repdir(onp,,]b)drDr\R

o.k d$eoo. fl,. honrcdd,-kb

cmmerene o.Flund qorLr Tre

plmring adivnjes

Deveropmenr

re{rea\

cons for fte oil p'ojeds

se.l6 hilion

nexr

Ndv. (

kadprci.,detdopno,

*s. condud

(a.bon). specincaly dnniry of n.v p

iid

fes

l.ljse *de.onduc@d

nli.Ly non $e developme or Ebn. Erpaison rroiet

ds m.ounr .nounring

bu]k of

2) nomhs due

133 Fsuln .n!loy&s ol b jncH.d votun. ofbGinai

rre aroup. sp.cifically for ns

ftielabt. .io:y busins:.

Bero*

de bE,rdo*n of

qutaem

Pdlnal'Elwnb.nlL*alRhI:h|hePhili.D]M

l:jll!rt,."":

,,;,"...d

".,"a Itr'0'FJ|'*J{.'p.

'iol

I n,.o, rF.a_h.

rn,. . r ,,,., _dm; ,e,

L.r nrrl 6ei.;n ,dme d ie ?$F ft* h'. 3 .o b.* g,sms ;'h. n r prcn , orfi. eorqn.n,

e.. d" L.!.;d |h(

,,"

a. ?Ted .qudr), ud ,

s',.1 i*€ d o|^p;1o

"TT.ber,,

ed""1"e

rc' t, f oI ie pm

A m* HlnD.flbon La* ha ben

uctic ne{

md,o)a

lienk b.foc

00m..

Juty 202r,

*ift

do tunhd d

fisl

rms

ror sll

k. dafts;d,q ,M\er do.\.

req v.brt " p;odrcn sh,trg or,t 1gof ,h\t{, n te FLm;

,he

E en.drnA @,he re;m,

ff d;

mn_ru,tr.,. .rh, b;{r

pi.r

il"t:,jr: " iiiii' ir::rd:':,i{iH.ii:il#ilx*:.::i;T'"ri'n:: ;"";;;-;:,;r : ;:-"f)"T"."j.;,,"fti l;; ;iTt1l

n*r*;;;^,:n_t.,;i l:i Thc genear pdrfticat shulrio. in

proribbirit or de conphy. Any tur-. p"tLrkr

- **.,i.

insubiri,y

aabm mry h!rc

rtqiNe.ftd

dsnNnbeli.tsl]r{trhisalndy

Tne

Ebne crudr oil prodrdiotr

ofishore cabon

or D&?mbq 3t.20

o r ourpui or .m. id Elevar govmfrsr aurhoiiq Morcov.r, tike mon oit dis.o{ry

unexpeded rev.rs

* irh tudhe. diEdr;ns or ih.

cnd. oilsaks and Purh3* sd st1i.6 As*m€nr (cospA)*irh viiol s.a. (viro ), *heE dre rand k obrisql ro anqs p.reniat pri.* fbm rhnd p t btrrr nd ro$ltdje crud. dil ro 6e bd biddd. rmbiriry ofvilot io cavas, $id pdy buys oflerins an oprinun buyiig pric ror rhe.nd. oil may cEaie d sdv. bjtiry Thrs ftk k mirigard by rhe obligd

$bnir

ofrh.biddingpcss.ondudedbyvirol. u0derrh.cospA,virolk

ro rh. consoniun d€

onhnuetodlop'Tonana€etheris

BdledPjbiLighr pdi.ul[ d:b or period. Dded Bed rend ft p .e or .nd. Noih.n Eep. {hire Rabi Lidr rc duing

oit produ&d in

Nonh

ta p,u4B

+L+t!!4e4!nee!, .oma}.rhk!olmekdrnrs] . co|*rioi rnLs fron omlkq

and

bg*ddorheloladida|

tra*r

in rhe

desi9 or.qutpneft o

mnetrht

p.m

rcqnn.menr!,

!€domne below.rpeccd teve d dhef ridrstriar rcrjoN by

. .

pbnn€n and

unptmild po*d our,s*

c0ns@(ion

ad opmriond

force

mFm

dMd'on

dh4

due ro

ahfoe

}e (qws

.ip.nss ofrhe

noi

P.roEi.4] ar

losLfts

whictr

dnery;

expansion snd Efurbishnedi

ror.d o@ss, peNmL injue ro$

or 0 planh and suspeisioi of

.sd

me prcjeds

detars

orsy

of rh€ evenh tisred ab. exp.cred

pFdonmandy deiomiiMd

conFny d0$ mr mma y he4e i3 u.s. Dollr od/d Phirippin. Peso, a rh. cd!

openhos

6su. $ar ruerc 6curcnes similo or disim ild nduft would po{s or nsm gendr.ng ss4j or si The crcup

n,idei!.ej

emtoyes afr-6g

may be,

u s.

(qu*

fi.om any of

Do[$s Ho*.vei rh. oblicdioi aid ny arc d.ioniided in ptritippine

snswd for .oftspondiDs oblisariotrs.

Fitrrn.id nnk M!D3en.n. objetiv6 ,nd potict6 Crup\ pinciFt finmcial inshhenh indde qd eid (fin'ncbl 6ds a' rypl) sd Eceivabt6 rh. nain

I'.

isls ehing fiommecroup\

I':.eimtr,

:li'

I,se.!T pa,s

Aho,

ci,y Tt.

'ilh

finen.

eqrvaledsj tuding

atrd inyedmed

wunr6

iit i.nrumenb

ra,t- (rci

h,nc-

or,he

conpliy ovs ,h.

Mdb8e ha a usto

?60

pDpeny is

ion wonh

d.d !.d

croup

Pdror.um s+n,c. cDorn(B (scJ

Lih

.*,,b,*:e

ofpurchd.d torrob.u€d6

ddirioiel p6p€ny in r[e

Ihe prin iparprepenies ofrhe

ri€e nom

n.{

rwerv€ ( t2) nonrhs

h. phitippind!.d

crbon,ad

wiid rmrgy s.flic. coornd (wlsc, (Nab.sM'hy-Burulisa, Akl,r)

(|:g!m dd BahtreA)

s.r'r Etr.rs s.ri.e coirrud (srsc)

sfr

dscu$'ond

s6rarro/r'r.f

.gtufs

offt€nber

r. I

I t,

20 r6. rhe

compb

PoNofine. colponrion HoB<ofrn\erruft rn..

(Fitipino)

6rcDNofuec.rp{lon.F''p'nor

!! tlu.rohn tokrc &d Y!, mnc ?. Phir \,E Euu $! hc L455

cdmmon Equty (rar 2

ys^)

liiil"Hij:,tE}il*'**s:,]il ff.:Ii:il.i{'",1i.:r,ffi:*,".ff "x';Ti1iii3:fi:,:ff. :?#i",rsj;,[ h" 8".d b ti

r;t;:15a'* *,t',I.$il,

" " -. - o' ""1;";,:;::; Tlia;}t;ii;;,r11. "i;'; Li t,i;"::;;t,;!:,:: i ,,,.;.,i:nt1-'",

;li:tlri

Debr

sEriri.s

'Km

Err

$1. oaumeisrrcd scufiries for rh.

. Nor apJrtiqbte

srck oprids - Nor Appltcabk s€cuiries

orher

::: ",i:.lf

Knnmn ri rro(r) mer

Ird. *6

";,,y"1

subjd

seunres

ro Rld.nprion

Nor Applicable

c,u

Nor Applic,br.

(^udned)

^3orD4.rber3r

Finai.ia|s*d6nYdEeoucrj

Pmp.ftygndequ$m.ilnd

lNdre

joiir vensre

LI^BIITTIESAND EOUITY

roTAL Lr{Brr

rrb {\D

Lor

r!r..:cc,.?

r2r-![0540

rdbrr*.6mounrdro$214.l00nillio.aid rlr7.l3t mittionaorD{ y

.d3ddion

fte6nit%

.66q ]L or solar

Po*d Psjed hd 6c MCPP h

d{rci*

m,*d pL,en i6 {ilh

orisinat

flom Us$12.53? nittioi d of Decembd 3 L 20t6 is mrinly du. ro pryn.d of prcsEs bilin$ for rhe nd

Ph.s€ 2 and

payn.d orcuftrl @nioi of td.s.

preIit'Dd ros (rvPL) lnoui&d

ro us$0.t62

ion

ad us$0.t56

si$ orrceivables fi,on linjntsal* o $16']]'isaccomling.aedby||3ea dins re€i{ble fiom d{ric,ty sales, mainly hon r,

Thn accomt mounred to Us$6.?66

defm.d

sorar

Polr hjed,

fiid.ing.o*

P,ipaid

2015,EspdivdyThe55%ndinc euiomal lor rhe MCPP Phe l Propeny,ord.nd.quipn.i.(PPo) d4lhed bj I r?% non ustr40?24 n bUs$1r3.3?l hillionmainlydu.rorh.inpaimdof rlreclboioiles6 .d io r.rs$r0 84 niLrioi md us$r5.9

dd2015.r.s!.riy.ly rbvdrhorr itr

us$2? 311 mirrion

rhe 36 14%

id d.dse

!i&

lorbi vemrre nf. hd !s$27 r6?ni

.enbs r r,

20r J,

6p€divdy. 'Ihe

e hsrdion sdju{md' from pFvioN P49.72 Us$ 1 a ofiid by rhe income Bemard by PwEl mou i.Ero Us$l lr0million

Der.rEd rrx

N.t

(lirbili.y) (m^,4-)

du. io

'iming

differcrcs in re{s

Ii'bi|ity,povjsiotrfolprcbable|6$i 'Ihe crclp h6 a DTA or Ust0

r0l

milliotr and Us$0.i07nillion

srdion adjudmd of mis P4?

06r r.rss

emml

fro

ro P49.72:US$l

e additionrl input

cDErr

Do{ron 0r

roi

p.yibt. 6 o

rprion

p.tuiis

D-.nb6 I r. 20 16 momr.d.o $r 7!? frilrioi dd $6 55? coilidrdidi c.jy.d iion non.@nrolling hr6c (ff

rd roral

dd Pehsold) in .r..$ of pupc. of,pdyiic rhe $ne $yn. PdoCEen. MCr

txes {ilhin

r|1l

idhoriud captbt ot lnliries uirtrin

rhe crcup,

h rh.

3ro']&!{n' noroto''e;"bngo'

::"ff1'll1"i,Yfi3,-"" rd

labihr

was

tuly

.orhnior

usfi 16Tni ion$d

us$t.095 frilion

&Bed (Pte,* $

fquiJ rfrribd'bhbeqrq

Noo

iftB'

hddf6

L\ror:--h.Lono.u\lvr.w

0icD d of D

r@.srrare of EEt_Pc tn

44% sh@

Perocfti:

ofEEr pc (dir*r.nd 10r.df56%shiie(

Mimt

p€fosotai

lnn [ndd Den&r r (a!did)

!ENEN mHER

sre

AND

IDMIN'NMTNO

rNoM[ (CsRc[s) Dd

Nd roEisr

iioDc (hs)

*d0F

or{oii

siis

d E0NE

(os)

..".,'.'..""'' Eq!i'h|&n.llhLft!|(0nts!'

!!lDl|!drmr$Po $E(rPffi Nd?

DAee{

vture, qh4" T1,! Cmup

unold, t, dR t, rcu4dq

i.ah{

s.@rd

mddiry b

ret

at}

tueqn *.h@se Eciq tu

soin on

lan

mnetidred nd itron. .lribur,bL ro .quiry

us$1.773 minion

shm ,s of De.mbs 31,

$0.0043

ffiiss

per shd.

oi|'ew!6oaT&.db)'3-s!dl

getrenGd by Mcpp

Ffpr. nhanoneas

us$2.630 m

20r 6 and 20 ts, rcsp4riyely.

ig pdw

e cho8$ ar

"on

ad pehsohr. ln.

s0.003

fthd

66.71%

e.;

im6c f

dehi.iiy $r€ p.tuii

cNb

orhd

.6ts didly

'tri6urd

th.

.osb or gendariig eledftiry

ro prod

d Po*d Pmi.d *bkh naft€i

its

oir produdion .xp.n:s (oPf,x) dedemrd by 12.6r% from

b(a$

6 mainly

dslin.

ri.

in .Y$ase crude oir

66.23%

in-*e

prie ad d

in d.pkrion is

d€ h inflasd

$4.219 nirl ot lo*er ro}?l!. (Gabo.) erpenss bbusht abour by rhe

$bFd b depldi

PPE

. (c&A) decded by

? 74%1

ll,20l5 ro Us$3217 millioi !s orD siekRighhol'ering,mdDdunsl,l' mh.i incon.lch'rg6) anofrd

. crin

rion u

(us$i 6r?) hirrion$d (us$542r)nirion a of Dlcenb( I t, 20r 6 dd in.od. Ghfe4) e.ouit

(los) 0n derrv,tv*: ri.bility (PreN rcfer

kbiliry duri4

rhe

Nor

r9 orrhe Aidired

os ii

od (Plese

ftfd

Nor

nane ofa joiD' op.di@r in iune 10,2015, dlus

Fins.i,L siordeio:

ri nsuhd aon $. re

wh.Bl

*!up of dsivdiy. ofrheAidir.d Fiib.i,L sbrn.d); addilroilr

Edu. bease,h.

rhe

€mb€r 31, 20r5 ro US$0.234

I,20r5 roUS$0.040nilion Nndi4d rmn !S$r,392

3r.94%

indee

! us$3.3l

mrrrion

in 20t6 du. ro itudu.lions otpee

hang6 in markd vaLu6 ot mvedmen 31.2015 b US$16,404 a or Decembd

a of D.enbq in

gain

ii@es exp6* nom us$4.935 mi

inplim.

pdcs (pleas rcfer ro Nor r0

r6s

us Do ui

@rn

orft

nirrionaof D.cmbdr,20r6

ion as of Deemb$

ys.

coNoLjd&d

Financiat sbEmens)i aid ^ldired . ridmus$.t4l mi ionaof Dsemb

n.ii

so'p

ar-o

tuded,

n't

u\10 r.3

dna

s!' 4, . n"o-

m. hx

t\e Us$r1rr nilLion beneft n

fognnioiofrh!of

prclino

s ofD*mb$

l,l0t6

neiity petuins

rnHtizd cr

Nob{odnrritrg in&ru, (NcD tr or

44%

$&.

of EEr Pc (dircd)

tcp/. of 56%

shrc (indiEd)

in io

pdmsoL,;

Toer8.rmobcdros237.1} nilionandst42043nil]on60f D*

rhs. The

sb04lrr iny.in.bb

mirrion

m14,

mp&t'.ty.

o s3.592

ni idi

nilioi d ihe e|d

hd pdosolai.s D.br sdyice

and.qurpn.nr (ppE)

fusfelofconlkcdEbn.wdkllo

niltioi

Dsdbd

ernb.

3r. 2or5 and csMd a! af6ljaE,

(cabon) .ndiis

d 1bft|.

iildroo rhn

o' D...nb1

Fep4rffr n a.ror. dnolirtr

prr

and t3.572

o adv,n.s

Ust:.qs3 nir o, L or D

s.Gup o] Mcr

Prepery.

ymdkelpL&.ms6{ilhdiciml 4 ol D@mbq r t, 20 r{ io

ftom us$1.313 miLlion

(srD conlnr

s$0.4r9

incF*

h.rofirrnd los (rypl) amou.rd ro Lrs$o r56mi ionad usto 16l ofDeembs31.20r5 sd 2014, rcsp*riv.ty Ttu4 tsyo0dde ofrhecompmy\ invedmenh in rc

D.mbq rr,

ni io' od

' ' 0|1;

r)toI7

paymed Accoum (DspAJl

$hr Povs Prqifrr

is up by 7613% riom Lr$?e.731m maiiL] du€ ro rhe devdoen.d of rtre

t,20|l

sota povs pnidr and

D.[.md oir dpronrioo .ct moud.! h uss 15 920 mi]tion and us$ t9 I B nifiion as of D€cembd ] r. ?015 dd 2014, rcsp&rlyely. Th. 16 70% nd d€e* is du. ro hansfer of .osG of comDtded *dk tfr.m Eum. Expasion Proj*r in Gabo\ w$r Afijca) fiom dr ftdc66roppE.

Invd.m.n t in r iori t v.trrn ( dlB I the Nab€s wind Pow Ptujlc! (NWPD. In Febru.ry la, 20ra,

mnddion

hi.rred bx mst (irbihy) (DrtL) riabirhy, pmvision for probabte

Th.

cf up hs' m

The soup

c.n

drt

wE l rh. mmpmy rhd dektop.d sold 50% or ir 30% shre hordings

P.focfti

,2015 ed $2?61 niLridi as or fmm P*o ro usD

adjdned

rlning dir.rercs rn

to$s,

of us$0.r0?nilrion

ad us$0

ar$ n.ord.d a $r.614 nithon

202

atrd $J 123

s orD-enbr m tion Dt.L

of D&.nbs 3t, l0t5 and 1014, f ii!d(m.d a5 0l rJ*mb€r I.

iutEg|eo'sha.6nolradedinlh ustr023r ot$

suppliert

.ontu'on

mirlron and t5.{10 nirrion

knbdr.20r5 rd

Pow Ptojd. lion dnd USts r42 nillion s or setrpmenGprog4*bi|ljnesliom

for r\e

soLr Po*s Proj4r.

Majody or $. orFd podion or rm lods payabh ornatunty nor nore rhm Tn. croup n.ord.d

ailrad Us$?r

Tne rminimr 6x*

pry.bre aE

one ( | )

yer;

income

6i p,y,b e6ofDeenbqJt,

'nd

rhe reda$ificdron

z0t5 ad ?0t4, Bpedivdy.

ERc and PcEc, rhey subjed !h (MCIT) due !o low rdabte inconei and 'o . Fd Mcr, i. c sbjd 6 $e spsiat Rs6 uidq Bor, rh inqtive

roaN to fimtrce rh.

rd abrndoinln!

p.y'br. notr.rretrl p.driis b rhe lom facitity iviiled by con{mdjoi oirre 50 Mn sotn Pow Prcjd.

ro us$t.ogJ mrlionatrd ust0.609

ioi s of D.canher

20lJ

r0r5

enimd. for rh. Ebn. hFBion. iis ro rh. plrlrl sdd!re and pur atrd irroid *tup ofd4ivdjye tiabiliiy du ncrhe pmd

^ftnsd

diftmenr rirbiri.y

amouried ro us$0.066

ion and us$0 069

niLlioi

as or

D{.nb..

.rriburrbr. ro ?q yhord.dofrh.PaEntcomprnysmou.drous$66]]5ni iotrorbookvatue she ot Us$o 162 s of Ds€mber I l, ?01I ed Lrst5o 09r million or Ust0.lsrbook vatu. pd she s or

Equity

Notr{rtolhs inrrcn (xcD a

e .

44%

she

or EE1 Pc

(dn{t

orPNoc.Rc, aid roe. ofrhe 6i%shlftorEElPc (indired) in

and loto or 56% share (indiFc!)

ii P.'tusoLr;

whihasorD*embdr1,20la,ftisp€n

003 €minss

ps shaE

and

Us$

a3e niLLion

lsso0l1 .mings pd

ypowftgemntdbyM,ibaiMao'h

ftr,0bAonp3r.db,0'4

o pndkrm dp.ns t4.2re millioi

(oPEx) d-Fed by r?40e. fmm 15.112 mi of D-embd lr,201t b$8. or b*d myalty (aabon) *penss bmughi abod by

ss io PPE-{erh

n,iihm.. csc (o&M) of pdw.r phd nd

$bjs' b

m€

deprdion and hichq

baftk prod!.d df6 17

aidje'ioi sys.h

(FcRs). depn.ia,ioi. md

aujd ortudbn md

miig.].dri.ilyrx.l?23%inseae

20rssompr.dro2014,vhichsd.donrylifebruiry20r4 ds and pqsoiiel .ost in puEuane ol rlre opsdrons s

201,1 ro Us$3.91

amhdion

I nillion s of D€.e of sord Po{s Pbjd

AGo,

$ft ,(

dpe.$

llke iisurumes,

(c&A) indded by le.r5%from u

'he

o.h( iuconeGl'rrss)

high6

amounEd to (usla.637) nillion ind (us$4.571)

a ome Gharset rccounr.

d{line ii i.r un*ali4d gain in charsF in markd varu* of iivesmenb PSE non US$0.026 niUim as oftrembq 11,2014 b us$r,rg2 aofDe

s4.6?%

eftomUS$051 milliondorDEem

90.93%.hsge ii nd 4ri4d ro* on forex chan36 ftom us$0.094 mjl 20r 1 r0 us$o r79 iirion tos lor rtr. s

shd. ii ftr gain r to$) of d *$jd., pwEt amouncd ro $0.241 mithoi dd vs$ozr nllioi ro$ !s of Dr

nsb

tud€d d rh.

. lnbrci.xp.ns mouftd Decenb.r

]l, z0r4

Thr

ro us$4 9r5 nilLloi !s

e 07%

inf.se

de b:

ofD{cnb6 rr,2015 aid

ncome nom us$0.24r mirrioi ro

us$4.5r4

hirlld

ust

idirryaolrremb€r3r,:014 rcsurr nilion rss on dsiverivA rrdling consol'&td Financial Sbr.neit) r (uss10.755)

nom $€ pur md

oprions (pteas. refd ro

Nos le or 'he

ddlida|$!upofdqivdjv.hbi|il}

Thegsry3ho@ordedaUS3o'$r)mi||ionand'l96cni|l]oipm!nioi 20r5 dd20r4, rEpsrivery. Bulk ofr rhe PsE.

fi.

chdge

lax rare

ased

Nob{obtdnhsin@r.nOcDaorDsembsrr.20r5petuiisrorherorLo

hd orPNoc.Rc, sd

44%

s\a. of

EEr-Pc

Irl'ile d of Ds.mbn I l.

(dn&,

20 r4. rhis

and t07o of 56% shde

p.eiff b

rhe 2570

ng.

r0% ofuhe 6570 share ofEEt pc (indircd) in

(idiFd)

in io

pdbsot4

shiie of TmyAsia rnd rhe rllld sh!rc orPNoc-Rc

K.yPerldnme|odicdon: Th.

rorrowitrg riquidity

.nd profib

LbbiiicsToE|5]o!}ho|deE'E4ui|'

ftear

DrcrtoDenrinr Rfl.nue

r.io a of D..embd 3r,2016.onp

dnetohiehdequi'ybrcughlaboutbyad

gDup\ tevenge. Thisd(tined drro high4 equit. Thert

sligh! deline in

op.nring piofii nrrgh

of De.hber 3l

mughr ahour by d€ctin. in crude pric.s. Thh indhdB in.

yd&ri.! ofrlr

For iddnionar KPh,

phae *e atuch.

tu iliri6prognm ror Dcu rpprcla

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.oidd Th.

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cddium

a*lnins DoE.s fdnat opprovat ofih. nvGed work pmgr pdr prcsure rudy hd sayiqr $oer

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T1,.

prar *ill b. ii conrinuous opedrion non me t3 wras omprisjns

Th. plmr wirl codinu. ro supply et{dcity

vrbm

onmscbl

Grchmd.

by 2d

tn.

1,.,,

,he

p4jers ph6e

Tdl,. ph6$2 iie ongoiis inctuding .o iiurion of scuing p.frns. ptusdd ains ro

201?

,vtr F\ffio,

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parelr iptrbe

ougr .,r

ForoiIfv.nE,|heopgddof9idprojed,VAALcoaabon(Ehmo.|ic.s hav. d.fin.d some *drs ro b€ dr rj rh. For rre d.cficiry sar.s, cxpa6io.

br cmied on $is y.& (i.e

ro rhe srid. prcpamiions ror

oprniarion ofemj4r coss, orneke btd pcpararionsi sd d.crde rsPP.2

dtliries *ill

pow

ftcsry

projed

) d,tr v,u?,a

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rhe

w iic&e rtre powd

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For me foud.en

04) yers lince oil er up is

fims ii hinas.m.nr oithen Tr'e ctuup

'd4rifia

find.ill

$Iinsi;

bok

Ltquidiry.

onsidss rhe abow facroB fd Gh rcqujremenb for a

arr lts

Thrd|)Ne|'oq,fe.rud.o|r

dive

exp.i*

i. eq!ivat.nr ro 6 e9% ofrhe rorat

roleN.

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a \a

ben e' dor .d b

Aldir sic* or scv for rhe.atedtr yeo qd€d Decembtr 3r. :016 !@m.nb ofrh. company, rcvi.w of 'n.

Ycitrh\md |{hrse

nr'

lacd ro fitins of

rmns

made

lirh

s7 r,r,r

r nd sr6,ll9, for ln€ yan

scv.Re\t".f+mdj-dmn'"|",nmDd hBaYaigrinedu\rc'lmb'h.Gbofu

The Audn

comnine appDved rh. arrov.

ft{

bad

on rhe

*nE* Eided

and rh.

enh6ofi||dindonandc{emiv.ol1im.nd,]]

d|1.,'rcquft'wo'aN||f.oipa). cdh@y\ Bord olDrEroa

provided b.tow

nnMolth.Bmd

Hlde YCC

hc, s*noii R.err( MMrsemnr & R$u(., h! MFirod,nss

,ri

Co.ponr Seni6, tn.

I I

Phir Lmg Dnbrce Tet.phorc

conpany,Mrco I

!4!!!ndmi DrRhr ro3 b Pcdr

rP€.pre, Inc ,

SdrEn

Coat

Conpay ad

FomdChi.fExrcdvr omer

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wordrd

ric (wsD Ptrbrh"id4 rnc

sysems,

!!Psrn.

orfitr;jm;Eip.,rene

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ch.t

Developned coForarion

qj!€rbr-s.prmb?r :007 k

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Pr.rd

In\ I C!'T.

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onm

;. Asso.idion, tm.

Membf, Bodd ot Diffiro^ of

sh@lsreir.ln(., Mslrj!n tirlfuk

rH K )

prific conpurr, rn Sr'frori R$ores coDorlrion.

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corp skr.6ry (t006

pruert)

s.afi od RdouEs corpodion

Asr. corp, s4'.t.ry t2ixrs ro 1015) avP r43atrDd (20r5ro ^dminbkirion Pdrccrc.n Ei*s, coDodion

chi.f r|brn.e ofii.er (200&101{)

avP Firrnc.(r0l4roPreno

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il.

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.ap'br $ocr. RcBc

lii

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rhe

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of rhares

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lhe

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20r 6

ofihertdionshiF ofrhe conpm Apprcd

'he

BoD upo rcemmmd or b) rhe 4ud I comn

r{orn4J\03I!n|$rur..ocflThomERc onh-

BoD.i" a1,.r\o..,,oF ,a,ng

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#ift,Sr"i*:;;trll;i:il:"iiii'.tfiTir",ti;

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7/F JlUl Blttdhg, ADB Avenu., O.ljgas Ce.ler P6ig City 1600. M.tro M.ntt , Phitippleg rd:P34a37-2e17 Fa!: (632) 631J066

PETROEIERGY RESOURCES CORPOiiATION

E-m.ll p.to_.n€Ey@D€lr!€rEl€v.@d,ph

STATf, MENT OF MANAGf, MENT'S RESPONSIBILITY FOR FINANCIAL STATf, MENTS

February 23, 20 I 7 S€curiti€s and Exchange Commission PICC, Roxas Boulevard, Pasay City

The mamgement of PetroEneryy R€sources Corpomtion is responsible for the prepa.ation and fair presenlation ofthe consolidaled financial statements includins the schedules attached th€rein, for th€ yea|s end€d D€&mber 31, 2016 and 2015, in accordanc€ with the prcscribed financial reporring fi€mework indicated therein, and for such intemal conhol as managem€rit det€mines is nec€ssary to enable the prepamtion of finarcial slatements rhar are fiee from malerial misstat€ment, whelher due to filud or enor.

In preparing the frnancial sratemenrs, management is r€sponsible for assBsing the Company's ability 10 continue as a going conc€m, disclosing, d applicable matters relat€d to going concem and using the going ooncem basis ofac.ounling unless nanagement either intends to Iiquidale lhe Company or 10 c€as€ op€rations, or has not realistic altemarive but to

The Bodd ofDirectors is responsible for overs€eing th€ Cornpany's financial reponing process.

The Board of Dir€.io6 reviews and approves the financial statem€nts including the schedul€s atbched therein, and submits the same to th€ stockholders or nemb€rs.

& Co., the independent auditor appoinl€d by th€ stockhold€rs, has audit€d rhc fina'cial ofthe company jn accordance wirh Philippine Slnndards on Auditin& and in jts repod ro rhe stockholders or

Sycip, Gones, Velayo statements

membe.s, has express€d iis opinion on the faimess ofpresentation upon completion ofsuch audn.

SUBSCRIBED AND SWORN to me before this April 10, 2017 in Pasig City. Affianrs exhibited to me their Ta\ Identification Number (TIN) indicated below €ach nam€.

NAMES

TIN

Milag.os V. Reyes

\00"732-775

Carlora R.. Vi|ay

100-732-809

No. ?-t9 : rug"No. T6 , sookNo. / ; Doc.

COVER SHEET AUD|rED FIXANCIAI STATCMEN'S

E T R

N E R

'Rlic|'^L

c B s

oFFIcElM

R E s

E s

/h,e4y/.'/'dlfu J

fu T

) D B

B P

Fro-d4@tsre0r€{.

tu&bdde@r!/!!brmrdhto@i6

Onts celrer, fudedee&!bd?ndeP@

7rh Fbor, JMT Builditrg, ADB

(j'ffifuh'11']#&Ffu

Av.nu.,

Pais city

fu4r&b69.d*'h66'h4d!b@fulMd e@ditrh@@dfu

iln[il]tmmuil

INDI Pf NDENI AUDTTOR'S REPORT

Die B6d of Dn€toa sd SloclholdeB PetoEnsgr' Resoues cdlont@ 7lh Floor, JMI Buildin8, ADB Alenuc,

wcisve

dibd rhe consolid&d

firuci,l sbrment

PtuEndgt RcsouE6 ColpoEtion sd i6

subcidiarics (rhe cronp) ich conFise th. cosolid.lod sbbent offintucial posilid 6 al Decmber 3 I, 2015 fld 2015, dd lho a@lidftd shhenb of contrchesive iname, comoli&red sbtenena of ohdges in equit dd €nsoli&Ld slo&mentr of c'sh flo*s for each oflhe the yem in lhe Dcriod ended De€nber 31, 2016, dd not6 ro the aMlidiled fiMdal sbremenb. including

summry of siSnificdt &munting policis. In

coMlidted period

tuhenL pr.Ml fanlt in dl tuisirl 6 al D*nber I l. 2015 md 2015, $d its dd its oonsoli{tded c6h flo$ for eoh olthe LllEe t€m in rhe

the r€hpmying coMlidaLd fimcial rhe con$lidaled finmcial posirion ofr& GrcuD

ou opi.ioq

ffirb,

fiwirl psfm*

sded Deembd

31, 20 | 6 in

aadm€

with

lhiliptin. Fine.hl

Reponins

Sb&tds

we mnducted our aldits in loord@e *ith PhiliDDinc St ndrtds on Andniq (PS{s) Olr Bldsibirirtes uder rhe sbnd.ids N lunhd dFcribed in the -.l,ard t s R.spNibnftie: lN tl|. ,{ulit af the Co$otidded Fiwncial,tde'.,rs $ction ol ou toport, We m indep.ndst ottc Gnup in accodoca Nilh the Cdde ofErhics ld PDlesioal Accounba in tb. Philjppines (Code of Elhict toserher *ilh th. clhical EquiEmmb rh'r fle Fldmt 10 our udil ofrhe coaolidared finocid siahentr i the Philippines, md ur bNe turlled ou orhs ethi€l sponsibilili$ in ecudscewithrhse ie{uiEmdls udtlECoi.ofEL\ics. We beli.v.lhal lte ludit widene *e haw oblained is su6cienl od app@piat rd pbvide r bsis for ou opinton.

l0 ofrhe coMlidanii Jinmill sftnenb, *hich discuses th€ snsp.nsion in lh. West Linlpam Oil6eld. Among lh. other op€mrioc ofrh. Ctoup, prdudion adivilies in ihe wesl Limpoo Oilneld aises dRdainlies 6 io tle the susDosiod oithe p(lit bilig of lhe ptulem opddions in rhe eid oilfield. Itie profltabjli9 of p.ttoleum opsatoN relaEi to the sid oilfi€ld is dc!.tulert upon di$overy ofoil in comdoiol qwlftfu thrl woDld Esult fsh the srcce$irl Ed{eloDmmr &ti!iti* thdon. Ou opinion is nor qudilied in resp€t of

w. d6r

aneniio' b

ofthc Drdudim adilitie

ililtililmIlilul

-7-

Key audn natten m lhs. mn N thof, in our pof$sioal judgnent tuft ofbosl signin.mce in our audit olilc consolidrbd fimdal shbnenb of the c!ftnt priod. Ibero naft6 seE addressd in dE conbxr of ou audit ofrhe cdnolidakn fid&cid slalemdls 6 a wholq rd in foming ou Fd e&h matht b.lo\ opinion tl€Mn, dd w. do no1 proride . seprate opinion on drese our desoiotion othow our andn addK!.d l)le nite. is @vid.d in lhat conlql

tuns.

dsribed in the,r&tir,.'s Xsrp"tuibnniet lor the ,ardn o/&. Finaeial Stden?nb srion of olr retoG inoluding i relation ro th*e ntd*. Cohsalidat?d pcrfom$e Aedingly, ou audit includ.d the ofpDcedEs d6i8led ro espond b olt 6se$nert of rhe risks of mdial DistuDenr of rhe comolidrred frdcid slocmdls. The 6uh5 ofou ndil prcedu6, including the prccedfts pdfomed to oddrcs tie m,teB below, p@vide rhe bais foi ou audit opinion on the Nconpmyirg @nsolid.led finmcial shrden6. We hive fiiJnlled the Esponsibililies

vat"dio"

oJptu

caa

oli.rc

laludion of Pdocrem Ener8/ Cotpontont (a subsidhry of peboEmlgy) ddivatv. liobiltry Flrted b lh. pur sd call options on tne shm pmhde 4sm.n1 micEd ilto virh C,pAsh ASEAN wind Holdinss Coopenriefu.A. oler lh. inv€te Compmy, PtuWind Endg/, lnc. (rekwtnd) is hded on ctuin dsumplioN sd enimares. nies imlude thc probabilily ofo liquidiry evd thrt wiu lminore the Dur Dd call options, rh. omplbliar ofstike price ar exeris. dtrc, th. tuiurc Derfo'fuce of lerowird, md rhe rjst ldjured dkaDt ne. we focu.d o tiis @ bmuse ofthe nsagmmfs judgDent invohed in rhe laluidd. T1| .fied on rhe 2016 m'sdlidakn ns incomc of rhe Fnaument of thc dedvotive liabilig moud ro $10.76 niuion. See Note l9 of rhe €nsolidaled nmoirl sardenls. Tho

L\e valurtior nodel u*d by referedcing 10 conmon valution rodeb We Ficwci lhe *ey inpnb used in the lab.lian seh 6 lhc pobabiliry ot m *en! tha! aiu trige.r tne pnt or 6u, nre, nakd bda tud uquoi.d mskel by Efemdng ro ntuk con@tual c6h llors, ris* of the dabonMluatiddate In addilion, {c involvci ou in&nul sp€cialisl in the nerhodolqy dd lhc ssuptions nsed.

W. sse$ed

pri6

fr*

sid

'Ihc estimles ot oil e6 aepes rcquiE siglificdrjudend dd ue of Nmptions bt .he be6!s. mmlgeDenr includins inpu6 froa int mal We focus€d on this cs.iml.s havc a mlaid imp,cl on ihe consolidared fndcial slot mdls, 6 theso @ urilized in h$ing impaimenr, mlcularins d€pleialio4 derletion dd moniadoq md estnnating d€nni$ioing prcvisions.

.4ins.

ftt

lhe

Dnfrinty iNolved in e$ina1i4 ENe qwtiries b€m$ of lle cdplex anbacrdl sd3lmcnll d.ldli4 the Group's sh@ offfieres in Gabd dd othd l@al seryice sntacL oler *hici tl'e Compmy ha peticiparing in@ss. Illis DnMin!, ako depends on lhe mount of Eliable sEologic dd dginerhg dab avdhble al lh€ rime ofthe edintle dd llc inrrprebtid ofthesc drll by lhc nilageDent Se Nob l0 oflhc consolid.l€d fimdal tunda. 'nrere is m innae'r

ltilililtItt$mtl

rhe mmslnenlt *linotion pFGs, including the asumplios used i' refedce !o lhe dsumpriotu oflhid parq esdnlis md rstd rhe relddt conrols We pflfom.d m dalysn otfie yee Esnes cdDed to lh. prior ys sd inquiftd of uy ch$e6 i' tbe chbges in lhc uderlyin8 ssunprio.s u*d. We dalu!&d dE amp€enc., spobiljlies sd objsiiviry ofrhe Wc engineN en98ed by rh. Goup to perfom d iideD€nd.nt Gsesmqt of ib oil reviered lh€ spoidi*t rad dd oblain d m ud.Ebdiry ofrhe natw, s.ote sd objedives of chdg$ in lhe Eserye his wo.k od bajl of die Blimo&s includins

W. Eviewed

.uol

ftsfle

Etitulo,

M ..ti'w^t

oblizdtuB

h6 prcvisions for cl6e dom, restoraton ud envimmental obligarions on ii5 sol& po*er pldt in T6lac, geothemal po*s plant it Bolog6 sd iimi in oil fields in G$or The calcul.tion of rhese plovisions FqDt* rhe 6c of nmagmenrjudgndl in esrinating lururt @sts dven the nature of@h si&, rhe opsarins actililies donc, md dE facifties coatucl.4 oong other The GbDp

Ihs

!o ssme q rc@nable 6te €lculatim ftquire rhe considemtioB. 'rmagenmt pEsenr ulue al Ep.ni4 d.1e rh* fuore ssb to

dis@unl

ftviess dr closeim, restorim md envircnmmral obligations on o unu'l b6is ne Coun s6 m eftmal tshni€l sFcialisl to 6ss ib shd in abmdonFenr @s in Gnbon oil noUs, md m intul bchni@l Broup lo estimre rhe furure rcsldalio' c6b of ib sole od Beothmd porer plsls sibr Berue dfrhejldgnenl ud snbjecrivi9 involv.d it dF Btinatio. pie.$, wc corsjdered rhis ro be a kel audit nonr. As ofDeMbct 31, 2016, provisions Elald 10 Net dnenenloblieltimstobl€d $1.3? million. seNob l3todie snsolidaled finocial $rd.nll The OouD

W. rcvie*ed

the tlllmsEmenf s

pllEs

in alcularins rhe piovisions for

ser EtiEnenl

obliealion,

andtned$eEldtutconltols imludinschmses inrhe saidprorisios in2016 W.Evieueddd discws.d wilh the ndasme Flevdl dcumenrs od rstd rhe doutts ofthe 6sDed Hloiarion and Ehabilibtio. by comparlnB these b rhe repon offie dhnicol specialisr. W. reviNed the lnft ondihalesused inalcnldingrhe pbvision. Wc 6r*qi the conpelen€, apabilitis dd obj*rivig of the lfuasemcnl's irteDal md *emal r*hnicol speolist rtilized ro prcduce lh6e Val@ion ol invnw"t in Goboi,

fie

GrcuD

Alrica

tv?n

Linap@

hs irvelrrent in Gaboa We$ Afticodd wesl Li'rpacm inchdcd in wells,

phdm

plat ad equipn tu snian e bsd fd iepaimdl and oder frcililiff' accour 0nds Ppp vhm therc .ie indicoljons tirt tne crryin8 values oftle inv6hent nay eica.d rovemble tty,

aeomt ofthe d.clinc ir oil pries in 2016. which lMogomsr ansidsed d inprimenl iddi€ld, lhc mmag€menr perfomed m inFaimdl 16l D4 rc..rdingly, @ogni4d o inpiidmr lo$ mounring to $3.33 niuim. nE de&mimtion ofrhe recovdble moub oflhe 43.* b.ing tsd for inpaiment r.quies e*imrim involing lh. w of intdal asuiptions such 5 tutue pldduclion 14eh ud msb, md eftbd sumplions sch a oil pflB dd disout 6b Bsus. of $e signincmtjudsndr iNolv.d in lh. esliDdion ps*, we consideEd rhis ro be a koy udn roftr. s€ Not l0 0f dle @nsolide! ntucirl stllrnents On

lililtrm|llmm[l

w.obtainedtnemsagmencsdse$m-tof itsiNeslr!'ens HMbbilityrhroughthetdisonnred c6h now psledim. In ftldiion, we tesbd dE Asmprim lsed lo complte vdue iluse of eich invesbent such d funire 6i io* poj€tion, cmodiy trices, disur nrs, dd exchdge mb our poo.du6 ako include snladng lhe osupiions usen b those povd.d by rhid Frt estimdes. We also iBpecd lhc serice onhcb rd @lddl joinl opedions 4redds of @h explohrion pojels lo deGdi.e lnd the psiod ovd viioh de Ghup hN lh. riShl 10 exploE in the speofc ma has nd expi.ed dd $a(he Grcup na rishts dd obligdions Dds rhe ontr&b thDugh pdiciparing interesL We obainei the lat6r nMgm.nr discl6Es rest.ding lhc slotus oftnen senicc contrb md asesed the rd.qu.cy lo suppon lhe ffi6snen1 olnsogpmor restding .h. sovombility of these inv6b.nts. we dso involved ou incmd sp€cialhr bm to revis lh. calcularidn oflhe Ecoverable mounb ofthe invdlll.nls for pu.pGff of impaiment testing-

Mdaldent is rsDonsible fd rh. otnt inf@arion Die olhd infonation mnpiis.s tle infmrion includan in $. SEC Fom 2OlS (Delinitivc lifomalion Sbhctt) SEC Fod l7_A md ADual R.pd for tl'e ys etuled D.Mbs I I, 2016, but dos no1 include the @6olid.Ld fi'mci'l slstnenb Dd or audilor's Fpofr thedn. ]t SEC IoD 2GIS (Defmilive rnforurion Sbemdt, Fom 17-A md An'ual Repon for rb. yee odtd Decemb€t 31, 2016 ee exte.ie! b bc rode waihble lo N afte rhe dale ofihis audibr's repd SEC

Ou opinion or lh. consoli{t nol cxpres my

fod

r€d

flldid

sMr@

slolemenb does nor

avd

lhe

oths infomalion md we *iU

anclGidn .h4on.

ou tDdib ofthe eBolid{ed flMci.l sbrenena. olr rcsposibilit is ro rcad the other infolmtion iddlificd above vhen it b*ones ovdlable dd, in doing so, consider vh.lher the olhd hfmriio is meiauy inconsislenr vith rhe @nsolidlted finmcial sEtsdls or ou knowl€dse ohained in rh. .udils, or orhegie app.s 10 b€ marerially missLl€d Ir

onnolion

R.sDo.sibililig

Mr.ag.n.nl rhd Thk Ch"rg.d rirL Governone

for th. Consolid.ted

Muagemenr is Hp6iblr foi lne pEp€Etion rd faii prcsentation ofrhe consolid.led fmcial shrflients in aeodmce wirh PIRss. md fd suoi iDtedal contol d mmlenert ddmind is nece*sary to dable rh€ prermlion ofconsoli&red fDmcitl sMentr dlar de fiee fton material

mislabmsr. *herhd

dDc 1o

ud or

*or.

E.paiine lh. coNlidared fitucial slalem.nt, mm'gdent is rdpocible for as6sing tlF cronp\ ability ro contin!. d a goiry 6n(a di$lsing, $ applicable, nand relaled b song con;n dd 6inc the going @'cen bads olMnnring unle$ mma8ensrt eider intcn& io liquidate the GrcuD or to e6e oD.'atios, d h6 no Ealiiic albidi!. bul lo do s In

TlGe chrged lh Bovdsoe

ftsponsibl.lot ovffiinA

the

Gblph lbocial Fponhg pme$

lltiltl|t||fiilI|[[

,{udilor'rRspouibitit'e!rorrh.Auditof rheCotrblt.redrim.ci Srrro.trb our obislivd ee lo obbin Eenable a$dde aboul Nhelier the mnsolidared 6nddd slaldeds 6 a whole ft 6e fron aacrial nisloLnen! vherher due io liaud d e]ff, dd lo isue m rudtoas EDd.halinclud.souopinion. Re6onable dsurace is a hie! lael of dsumcq bur is not I gudotc thol u audir conducred in Mddde lh PsAs will alM,s debct a mlsid miss&lemert wien it exisb. MissEhdt 6 4isc frcm liaud or etur dd e mnsideFd nabrial ii individlally or in the 4lrcgole, lhey could lffiombly be *peLd to itthene dE 4monic &4isids ofusm Lk n or dE h6is ofrhse co@lid.ted nmoiol slo&menb. Ar pd of m oudit in aaordmce with PSAS, se .xdisc pofssional JDdgDenl Md mainbin Diofe$ioMl s*eprickn rhnughour lhe audii. We lho

nisslaLsml oflhe coNolidatd nmn.iol si3bmenb. vh.lhs dne to lBud or ed, &si8n dd t€rlom Ndit pbc.dwe ietoNive b rhGe risk, dd obhin audit eliden* lhat is snfricient md rppbpirE lo pryide a basis for ou .pinion The risl ofnot d.letire a mabrisl missbrdml Fsulring fron ts ud is hiShd lhr for orc rsulting fton ercr, 6 fraud nay involv. slluior forlery. inb.iontl omissioN. nisFpreMblio6, q the overide of incml @rtuj. Iden.iry

ed ss.$ rie isks

d udstording

of mersial

dbol

reldml10 rhe audir pre.nws thal @ in lh. cifmstoces, tul nol for the purtose or expre$tng 'pprcpnit opinion on rhe efredivrnds otlhe GEup\ intbll mtfol Obbin

ot inbrnsl

Evilu.le lhe lppbpriaroe$ oa&couling policies tr*d md $e ffinrblde$ of s.ourins estinatB md rela!€d disolosw Dade by nmeFmol. apFopri.t ne of llbagFmmf s e of tie gping cmo basis of lmutng md. bsed on th. audil {idm€ ohbinc4 shelhs r nat.ial unetbinly exisb relaled lo evdrl or cuditioB rhar niy cdt si8nific$l dotrbt on rhe Grcur's ability ro cmtnu. a a go'ng aned If se conclude .hal a n.terid uetuinB exists, wo e Equired b dra* atlention in du Ndibfs ftodt 10 lhe rclatd disclosr* id tht coMlidarei fi.mcial sloLment or, if such disolsu€ m iradequsre, to modiry our opinion. Ou conclDsiod e b6od on the audn *n dce obbin€d up to the d.te olou luditoas repon. Howe!4, tunG evmb or conditions ncy caw the Group lo Conolude on dre

ce6e ro contnue

a goBa

concen,

sdc.w dd @ntenr ofrhe cosolida&d ,ilmchl sbEmdts, the dislosres, dd rh.lhr de coNolidrred fimnchl tusenb replg.tt the

Eral0a@ th. ovs&ll pesenhrioq

inchding lnderlying

bm&rioN md evdb

in a

lllsmd

rhar

&hiw6

fair presmulion.

apprcpd& rudil .vid.nce rega'ding rhe fhscial inforuri@ oflhc enritid m bBinss aclivities villin tte C@uD ro expigs d otition on rhe cNlidal.d ,i'mciil shrdents. We @ FsFnsible fd rhe di@don, supmision ed Fntnoce ofthe ludit we rdoir sol.ly HpoBible foi ou tudit opinior. Obrain sufiioienr

|M||lrfl[|mllfi[l

W. commuisare *idr rhce cheged lh goremde Egdding, mdg olhs mftq the plm.d scop.rd timingofth. Ndi$dsiSnificmraud nndings, includingmystnificdtdelioienciff iD i dd cmrol tnat we iddt,i duing our audil.

govtuc.

relevmt rh o slo&mot rhat *e have @mrli.d we rlso povide lhos. choeFd with 'nh Eldidshipd ed md 10 vith th.m all almunicale elhisl EquiEmenb regarding ind.p.nddo.! ild whee atplioable. orher maftd rhit nay idombly be thoulhr rd bd on ou indep€ndence,

Fioh th. natteE oomDunicrred rirh thos chdged *irh sovemmce, vc deremine th* ntttem thar sere ofnsr signifid€ ir $. au'lit ofrhe consolid.ied finoncial sbrsena of$e curcm period ad lhdfd. $e key audn ndets. W. deqibe ltese mne6 in oui tuditors rcpofr unl6s laa or ftgulalion pEludd public disclosu. about tie Dsds or who, in cxttnely rm circmsbcB, we debnine rhat . nrttr should nol te onnunicii.d it ou! Fpd b€c.us. th. ldv.Ne @sequdc6 of doing e rould @'rbly b. .xp..t d lo oulweiSh rhe public intul b€nefis of s@h

Thc

engsgflmr

sYcP

pder

cotRts vELAYo

/rl, t

&. audil Fsuhing

in rhis

indeFndot 4diror's FDoit

is .r.hn T. ViUa.

& co.

ttaa

AdFdibtion No. 0733-AR 2 (Gbup A) May l, 2015, valid util April 10, 2013 Tu ldenrificdion No. 901-61 7'005 BIR AccEdibrion No. 03-001993-76-2015, Febrary 27. 2015, volid util Febrxary 26, 2013 PTR No. 5903775, Jsuary l. 2017, Mokti Cny SEC

tmilruililil||I

PFTROTNERGV RTSOURCES CORPOR,ATIO\ AI\D SI. ESIOTARIES CONSOLIDATED STATEMENTS OF FTNANCIAL POSITTON

t0t5 ASSETS

dd ca$ equivalenb iNol6 6 ud 27) Fimcid 6setr ot fan vdE tnou8n profit or lo$

!2,914,533

cnsh

R*ivablcs (l.lore PEoaid

exms

5, 3 and 27)

md othft cutrnt arei,

ed 10) 5 dd I l)

Pdpdg, pldr sd .quipnent

(Notes 5

Deleren

(N@s

lnvehdr Irvstn€nl

$l:,516,605

exploation

€st

id .join. vent!€ (No&s 2 md p@penies (Nor6 5 13)

l2) 31,417

Derfled d 66eb - het O]ob s sd 2l ) Orh.r nonlutrdr ets aNoE 14

r0JEr,8:l $117.,t0,540

I,IABILITIES AI{D EQUTY Accomb palabl€ ,rld a€rued exp€ns* O.lob l5 dd 27) curdt ponion of loss payrbL (Nol6 l6 sd 27) Inoone d psydle (Nd 2l ) Depcia fd fritu sdk subsqiDrids (Nole l7)

lrss Ase.

payable - ner of

e.nmr

crmt

pofrion o,lob I6

dblig.lion (Nols

Derivotive liabiliy (Note 19)

Defeftd

liabilftiB

(Nd

dd l3)

$t3,795,72t

6,557,224 4r,392 021

2, r0,355,936

21)

Tohl Noncuftnt Lilbilidg

|lt[lfltxlrumlI

2016

tol5

Andbul$le b equity hol&6 of lh. Pabt CompMy capiill slox (Noro 20) Addirio.il paid-in ciDibl (Noc 20) Approprided (Nore 20)

Rensucrents of nel eorucn Edment liabilily Cmularive tuda.ion idjBhdr Equiq

Gfle

0,rore 20)

Non6'tolling i.is$a (Nole 30) ToL tqur) TOTAI LIAIIIITITS AND EQUITY

1,t49,555

o7,136)

(16.227J

(2,543,323)

1,359,1?3

24Jn2,014

3e;?3,9-5

32,t77.570 $237,130,540

fiiltil1]Luil]l

PETROENERGYRESOURCESCORPORATIONAND SUBSIDIARIES CONSOLIDATf,D STATEMENTS OF COMPRtrHINSIVT INCOMD

cc. ot.rrdhiiy d6 0{or

ExPf,NSE (Nor a) cIliRL !M ^pMNrtrsTrvE oDn rNcoM.l.eRGB) - d

(b$)

sh@ io

Nd roEiF

crtr

dslvs

cNoE

b@ru oos) ot,joEr

r,qr,032

3Jt6eB

Mft or& n)

qdos! gds (bs6)

tuugh Pft.d d bs (xor 7) oD

rJ17Js

disd o.brctur

(Ndc

6re

tr)

rRov6roN roR (BBEnr rRoM) Ncom

Nor2p

trxd!

(3,132,qn

5.q3.72

OEER COMPiEts'NSIVT INCOME O-oSS) t4 b b' 4ctatj.d b NaIt or t6' h tubqwd 4'ie Mrdllr b dhd'!rchshid djussr- ddd

Nt b tr rct@ifed h Fojt

t tw

rrrr,0q, ^NruBUAB!E

EOUITY

IIOLDM

(r.rt)4ro

B' 10

thil[[|I[ilm|l

F4uiryhd&BdePao'coope' \oiq^h I ir r|!$Nd 10)

l,msjcl

s5'!$.:31'1.609.0'0'

nllruilNililil[l

!'i

i !

!.!

d s

E Ez

€ .5

IE !

;! : i :

:!g€ ,5

I i

! :

d ZE

ii3

3 a

j{ j t 3

e E

i:L,s

i;:.-l

d o

5 4

I F.

+;l

qlE :,

g:l

a! .t

-H

Ui ! rlt

'E !E

{

;? I

{

!94 is E3a

i: ! a

6!:

t I

:r; !Fe :

r = I

-i

E" E

I g

::q

lil itii !:!l

::1

:ii

! a T

g $

I t!

M-;

!, ,! €t t3 .!! i

EI3

Eti 3it '|EZ

l ! j

PETROENERGY RESOURCES CORPORATIONAND SUDSIDIARIDS CONSOLIDATED 5TATEMEYTS OF CASH FLOWS

CAStr fl,OWS

OPEUTING

'TOM

^CTIITTIf,S

Itudn .xFEr (Not 16) Inrridd! ls! d cabdi Ed (Not 10) Depletid, d.re.i'iio,nd mdizatioD

dr34,63:

a6did .rla$

0{de rt) wncott of'Lr.n.d .xplmrion cosb on dbp{.,r of invaft.ni Orot 12) Los (srin) od d.nvative (Not le) she in n. ro$ (in.oi.) or, joint v.nM Orote

cain

Nd @.iri'.d fwisi dcb'ngc los Gaii') Nd siir d rin hh. chdg* on rmial s* hir slu. deu€n pnfir r los (Not 7) cain on ele of.qlipn.d ilot 2l)

12)

(1,8r)

Divjdmdinon. (xor 7) opmriry incom. 6efor N*iis opibt chrs6

aeomE @FbL sd rcqu.d

d@rs

Ndc.shomudedbyoFnbsdivitjB

o,?01)

(2,0re)

r,4661!L

)n9?,t5.)

!J0!,061 2r.49r,129

16,451.592

C^SH 8I-oWS TROM INVESTINC ACTIVITIES

Proc..js6'onsaleofFop.nyedlqDpm.hl AcquisirioB orprcpsry, pld .nd addirimd deLred oil elrldion

,."]

.quipr.d (Not

.6 CNo@ l) D.c& (incl%t io orb{ nucenr !s Addjriod,l invBftmt in ajoid mtu (Nd. 12) N.r c,sh

iniw

trom

10)

ca,8ee.?2t 00,041,65rJ (5,6t6.616) (?,715,161)

(630,33t

(5.303,110)

deomlid:riu ofi lublidioy

tilililmNIil|lil

C^SH FI-OWS TROM FIN^NCINC ACTIVITIES hos-tu debr (NoF 16)

Pm.€.ds fion availnent or

contullins inrsess (NoF 20) Pm.€.is r,on nsuuc. ordoc*s (xoe 20)

addirimr €pid aon nomnEollins D,no.o3r pro

$55t1r,ry7

illd

o.rde r0)

(s5zrtr)

t76.?I,632 4,669,613

13,44s,629

r3r,0r0

(20,000,t9

(ej377,6,r.) O,06r.tr) Cs)

OoE:0,

EQrrrvaLENrs

(: r0or59

3r?{d3 0,04e,?e,

NET INCREASE (DECRE^SE) IN CASII

(?r3,0r2)

IND

C^SHEQUIV^LENTS C^SII AND CASH EAUIVALENTS AT 8ECINNING

II\D

CASII AND C^SH f,OTTW^LENTS

YEAR(N"E

$1r,rt4$

ilLill|iltillimill

PETROENERGY RESOURCDS COR?ORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCTAL STATIMENTS

corponl. I.rom,rio. PetroEne.S/ Resources Co4ddid ('P!RC". "PtuEne.s/ ' or tbe "Gdup '). fomdly Petoreh Consulunr5, Inc ! s6 orgoiad o Set'tenb€r 29, 1994 io pEvidc sp@idia!

tehni€l wices

ib pdnr ampany. PetuIields Colponrion, fld

mnpdi* exploins

for oil in the Philippind

'ft.

icgislc€d offc. dd principrl place of bNine$ oflh. Ptrdi CmpMy is 7/F IMT Building, ADB Alenue, Ont6 Cflrs, P6is Cit. s nmc 16 fmally chmgod irto Rsllre CoDomtion", Nitn dE chsge in ib prinary purpose litrn Endsing rechnisl sedi6 to oil "elroEnere/ expldaljon and d.velopm-r dd 6inin3 stivities.

1997, the Group

sinultusN

lme 25, 1999, rhe Dep.tuenr oflnery (DOl) aurho.izd the sumption by lb. GrcuD ofPhilippine oil *plorltion @nt&ls. $e Minislry ofEn€By ofGrbon, wsr A6i* hrd also ben duly norified ofde bosfer b PERC ofPtufields Prcdudid Shaing Cmhcl covsins the Etme discovcry block in lhe Addtic shcll Or N{ay 23, 2001, rhe Secuttics lnd Exchsee CommGsjon (SEC) lpporcd rhe Goup\ applicdion fd a d€rctre in aurho.izd Capibl 6on One Billion ( 1,0n0,000,000) smmon shN at a ttr $lu. of Ono Ps (?l.00) ter she to Thr* HDdEd Tniny Million d rpa 00)po LI10.000,000)

"hrs

"hr

',lueofonePe\o(?

On July 23, 2004, rhe Philippine Inlrodudion oflhe entire issucd

Stck E\chmse, rnc. (PSE) apprc!.d lh. Lisri$ by way of FDiid ofdc GrcnD

on Algusl 4, 2004, ihe sEc hs@d !o lh. coup thc erlilicste oIIEmil lo olls sediries for sde. Tlis cdtines $ar rhe sh,H olrhe C@D hrve b€en Ednftd dd licen*d for Lining by Way oflnlroderion dd by thd be $ld oi ofiered for s.le ir the thilippins. On aususr I

2004. dre Gbup's

rhfts

listd

lh.

PSE.

Bdrd ofDir*ron (BOD) appoved the mmdn.nt oftho adiclG ot inoQoralion of?ERC !o includ. lhc bNine$ oi !.nsating pows iioD @nEnrion'l solllq such 6 c@1, fosil fiel, mtud Es, nud* rd otls hdirional $urc6 ofpoqa, ud nlm Hewabl€ snch 6. but not limicd rq bioms, hydro, solar, wind, e*lhetml, ocm ddsloholhdrenemble surc6 ofpo*ei Tne mfldm.nr ws qprored by the Philippine Secuiries md Exchmge Commision (SIC) on Sepbbs 21, 2009 On Jnly 22, 2009, the

su6

on Februry 23, 2010, rhe BOD Apprcved r l: I

Sbl

Righb Of.ring (SRO). Under rhe

SRO, rhe sh'e {se ofiftd at P5.00 pr sbe, giving a net pl@is of P631.436 million, ehich Na Ned ior th. 20Mw Phe I ofihe Mdh'ffi p.wer hoj*l OrcPP). Th. sRo

ffi

udetulen duins

rh€ period

Jue

23. 2010 rd

luly

5, 2010.

OnDeceDb€r5,2014rheBODapprcveda2,ISRO. Ihe SRO vs rdort l.n duing rhe psiod Mry I I b 15. 2015. The psceeds oflh. sRo mounled lo F599.6?5 niuid and uiu b. us.d b pdidly finuG the dprsion, conshdion md d*elopmar oftdeuble endg/

u[llfiflmflmil

prcjecis, such

Ehe Prcjcr

6 in

th. MCPP iPhs. 2) ed solai P.wer Proje! c$otr, west Alric4

s w.ll 6

lh. *pssion offie

incEse in Aurhodzed On June 01, 2015, SEC app@!e'i lhc Goup\ ,gplicdion for Capihl fton Three HddFn Thirty Million 030.000,000) shde at pa value of One Peso (ll.00) 10 S.!en Hutulrcd Million (700,000.000) sh@s ol pr vdue ofone Peso.

h oder b insul& PehEnergr''r

core oil busines

frcn iL renN$L .ndgj/ vdtures,

P€toEncleJ/, rilh lhe appDul otthe Boord on February 21, 20r 0, cEabd a wholly oMed subsidbry c'lled PeboGEn EneB/ CorpoBrion (PtuGred). PtuGen shall cdry{ul

rd.wabl. cnr8y poj@ll ofPeaoEnsgy. flE Peto6ro on Mmh 3l , 2010. the

SEC appovcd tbe

inelpordion of

vniF

on May 19, 2010, P.toclw signed ! Joirl AgRDenr (JvA) *iih TmlAsia oil Energ)/ Dewlopnent Colponrion (.TmlAJii), no* PHINMA End8y Corponlion od PNoc Rde*lbls corpoFrion ("tNoc-Rc") (.oll@livoly ihe Jv Peln6 ), wh.Eby me rd d*elop W Pdcn aere! lo pool dEir resoues logelher ed enb inb rjoii md opede the Mribffi G{t}emil Field L\hugh rh. fm.lion of a joinl venl'ft nmed l4aib6@ G.o.hdmal, Inc. (MCl. On Augu$ I l, 2010, dE SEC apprcved tne incorponlion ofMGI, whN p'incipal bBirss is ro d$elop ud opsar. georhsnal ied nclb and D.rd plrnb Pu66t b the wA, P.tocen holds a 65% inteE$ in MGI, shile Ta asii md PNOC-RC hoid 25qlo sd l0%, Bp{iively. OD Jau&} 5, 201 1. rh€ DOE appbved lh. of rhe Miibatua GREsc fton PeroEndg/ 10 MGL

vtu

tuld lr

Jmuarr 2013, duough a SpEial Meding of.h. Board ofDiEclon, Petocen cErred a slbsidir/, P.dowind EnereJ, lnc. (Pelrawind) rhat will uderbl<e rhe Nibd wind Povs Poj@r CNWPP). Ptulvind *6 incolponed or Meh 6, 201I *hdin Petsocen innia[y held l00o/o inrered Oi tuly 15,2011, EEI Po*er Coaorrrion (EEIPC) subsnibed toa20% equit she in Pctowind. EEI}C fonally b€.me a sbcknoBer oftettowiDd upon rhe SlC s approlal of PtuWhd s increGo ir ulhorizd mpibl dek on AugBi 23, 2013. En-rively a ofDem6er 3 I, 2013, Peboclen held 30% equiy shN in Petowind.

P.ffi'tr

md CapAsh Asm Wind Holdi4s Coop.iaii.f U,A. o]r Nowmbd 21, 201l, (CapAsia) enbEn inb a Shre PEchae Agendl (SPA) {hioh sets oul the p,ni6 nutul agesdr $ 10 llle saL of2,l75,00! shes in Perowind held by PtuGen, which is equilolent to 4Csli ollne rohl issEd md ouMding shes of terowind The pmh6e for rhe sale of slfts, & set our in S*rion I of tie sPA, shdl b€ $5,13?,0?9 upfiont payndl md o prmim oI S2,600,000 wnich *ill h€ paid on a stagBcrcd bais.

d€

Simulhausly on Novehbd 21. 201l, P.tocrcen, CapAsia md E€IPC enrer€d inb a Sheholdea Agsmdl (SHA) lhat *ill govo tneir relationship a shehold.n md slale dren rcsF.tive rieht ed obligdioro in rclalion ro Pelrowind. Funhs, th. Slr-a 6nra'6 Eovisio.s ftgddi4 vo.i4 nquiftnens for Elevut dilnies rftir Equire a higher d.8r.o of rptoval lhd thot wder disling corpo* laws. P€ftGerL CapAsi! md EEI?C ag* rhat rheir eguiry {Mmhip di6 in Petowind e ai 40%, 40p, sd 2trl., Hp€tilely. Althouch lhc sPA md dE SttA were ex*ftd on Novmber 21, 201I, thde did Dor Esun io PtuGreent los of contul ova Paowind in 2013. Tne lN of contul did not h!@n util Feb0ary 14,2014, tn.Cldin8 Dote.

oli Fehrary 14. 2014, rhe Closirg Dai., uE Daynelt h6 hen Eived 6om el. oflhe shds d .x@uted in tie M ofAsismat coveing lh. lrNfd ofsh@s nom Pebdclg

ntil!ililmru[l

,3 b capAsia md all rhe bnditions pEedenr have bm sdisficrorily compleled. As suoh, PeLocrg losl ill mnlrol ov.r PtuWind shile CipAsh *a givd tull vorins tud €nonic ;shb a r 4P. shmholde. Th. r-srolio made retowi.d ajoint vdtlE betseh P.hcrs, CapAsii sd IEIPC by tue ofd\. SHA signed bfieen the rhEe pani6 Sovcning the

nm.r olmagiiS l.hwind.

AsolDecenber31,2014. MGI

Pdocren,

Nhioh is

eholt

isefi6t

oqd

ely a subsidiay ofPetuEnerB/ thbug! by PcloEners/. PeLrccreen olned najonq ofth.

On Jme 09,2015. EEIPC rcquned l0o/o Pelrcl3dlC/ wi.h 90% 3he in

ofPdoEne$rt shm

lehcls.

lotine

PetocEeq leaving

Men 19, 2015, PtuGEen *6 3w,rded by rhe DOE with de Solr Ener$/ Se*ice Contet (SESC) No. 2015-031 l5 giling n de right dd obligarid b .rplore, d*el@ dd uriliz rhe sold eHS/ rsnrce within rhe smice ertlci @c l@rci in Tsl@ Cjly, By vinue of rhe Telac SESC. lebocMn c(rlmencd tne p.en*ebpmst &1iviti6 fd rh. 50 Mw Islac sols Power Plljed (TSPP) 10 be consruoled widin a 55 t*@ rroperry in Ceral Technoparlq Ss Miguel, Te|r Ciq. On

On Jue I7, 2015j P.tosole Colpordion ( P.tosol'") w6 in@Adden. PetoCE€n 56% shehdldings in Petosola, vhile EEDC olm rhe Emainins 44%. On

Ime I9, 2015, by vitue of rhe Deed of Asisrmsr md Asmption, PftGI€n its inleEsl in lh. S€SC 10 Pelrosolr. ne ssi8Ment ss opprored by L\e DOE

toNlenld

on Seprember 15,2015. Tne DOE the TSIP

confimei tlc commsciality ofrhe TSPP on Sepbmbfl 24, 2015. Codhcrion of olmencen by lhe third qu&r of20l 5 wi.h 6gd snpletion of Jmuory 2016

ofD@nber 31, 2016, MGI md Peliosolr e elT*liv.ly indiiet subsidieid of PetoEnsgl lh@ugn PetlocRn, whicn is 90% omd by PtuEner$/. PtuGrem dned mjdity dfrhe voting po*d ofMGI md lefosolar. P.hoEnsgr, P.L{G'6, McI od Perosold r. ell*tiv.ly rcfeftd lo 6 lhc crcur. As

IlE Groupt lou

(4)

slir d.rs/

buindses

e pololM,

rind, seodmcl .!d sol,r.

P€lrolem pDdu.lion is on-goi.s in de Eioe (Cdon) @ncsion, shile rhe orher Fftoleun con€sioG in the Philippines (No-rh*en hh*d, O{fshoE Mindob, Eatd Vhayd) m $ill in the advuc.d explohlion dagd d prcrr.v.lopnent st ges. The geothmal rrcjeob @ lhc 20-Mw

Tom6,

Brhg6 ud

Th. qind

dss]

Moibm omlhmal

Pow6

Pojd

ils ,2Mw *pssion dar is dpsr€d to be complered by L\e

projecl is .he 36-me3rsl1r (Mw) NWPP

i, Nab6, Aklm,

i. lodh

(MCPP)

wh*

sto.

Petowind

1miltilntx||]ilt

The solar poN& piojecl is the 50Mw Tslao

sol[ Po*e

lldt

(TSPP) in Telac

c. Ap!Ia!4!!!esEelid!e4!u!!qdq44q!!

Ih. .Mmpanying consolidrr.d fi'mcial tumsb *eF by dr BOD on February 23, 2017.

lhe acconpdying ensolidaleii finsoi'l sbtmenb b,ve

appioved

CE, Tel&.

dd aurhodad for

issue

been prepded uddd lhc histoncoi

esl

coNention meihod, *ept for ftucial asets si.d 0t fon vahe rhmugh prfir o. los (IWL) fld de. ative liatility lhat have b6 msura d net E lizable vil@. Figld e pr€ented in UniL! s&tes (Us) Dollo ($) the lmnr conpdy s ninclionrl cllHct. All mounb re ounden b lhe n*ei dollar ml* o.hwh. indi.oled. sbtemenl ofcomplimce The accoDpoying mnsolidded fmcid saem.nls have been pEp'ren in mnplidce with Philippin Financial Reporting sbdr& (PFRS). Basis of

CoMli&lion

'ne oonsolid?bd tnmcial shtmena snpiise rb. linmcial sbremenb ofrhe Crcup 6 at Decemb€r31,2016dd20l5. nE inocial stabmenb ofthe subsidiais @ p€pmd fot lhe sme r.!.ding yed 6 de Groupj Ning ddisrdi aMuline policis,

e i\e Goupt sub3idieiB wirh ib Decemter31, 2015. 2015 &d2014: Belo*

Espst

perenbg. orne6hip 6 or

2016 2015 90yo) 90%) Percenbge she of PtuGjg ir its subsidtes: 63'% 65% MCI 56% *vo (NRDC) r00% )0Ol NNa Road Developtn nl Colpmlron

2014 t0t]l/o 65% lot]//o

PERch ultitnah sh@ in MGI md 'As a rsuft ofrbe sale of l0% sbke ir PGEC, oo'solidared Etoined @ing! md income is redrced by 10v! 6 ol od for rhe )€m dded DeFmber 31, 2016 ad 2015.

lehsol&h

Penocrm h6 oonlrol oler Pebosolr, sinca Peltocen is lsgely iNolved in rhe key decisiots conoeming dre lindcill ad opdling polioies, aotirilis md p.o sion of tcbtologtoai suppon dd bchnic.l know-hoq to Petosold.

flililuill|liltmI

,5, Subsidisies o€ coNolidrtd whm contll is tufe'ed b l]l. Gionp dd c.N. b b. cmolida&d whm mnbd is bmfsrn out of tbe Gioup. Sp*insuy,lhc Grcup conlrols ssubsidiory if ud

i) b)

Po*er oler.he inBE (i... .xisring deha filt givc il the ourelt !bi1i9 ro difot the adivitie ofrhe iNesbe) E:pdure, o. ight, b leiable rellm fm ill iNolvenot wth rhe invd€, md Ihe abiliq b 6e jl5 power ove rhe invesbe ro afie.. its rdms

When rhe GoDp hs consideB all rclcvor

thm a

f&ls ud

n.jodq

Fl*et

ol the lotjrg or sinile right ofm invsr*, the G@up in wherher il ha povd over m invslee,

dtmsbd

assi4

mntrctul mmsment *irh the .thd !@ holdm oflh. invel* ftm olhs contlotul mgemdt voting righb sd pdmrial voling dglts c) Tbe Group s

a) b)

The

Rthrs disina

The Gioup thar

lhef

no1 it ootrr.ols m invEre iffad dd ohoees to @e or Dore oftne dree elenent of 6ntol.

rc-6scs.s vhether tr

dEMsbces indic&

'ne consolidaled linochl sftDenb ffi pEpeed Bing mif6m &counting polici.s for likc tssadiom ad othe. evenb in simile circunshG. All inlocDup balo6 md tustions, in&rcroup pofits dd cxpdses od gains md lGses ft elinidre! dding sMli&tion. All irt'Croup balmces, tustions, in6ne md qp€nsd dd pofil dd lNos m eliDinabd in Conp&yk equiq. The pdion Nonantduing inreresb e pasmLd sotm&ly frcn lne prsenl.d sp@rdy in rhe proft or los md nd Neb in subsididi* nor $holly oMcd 'mnr e of coNolida&d sbrendr of ohprehdsivo incone, oonsolidabd shhent ofampEhedile ircome od m'solidatn sdmsr of chdges in equiry, &d within .quny in tl'e @nsoli{tared

n&ne

offindcial pdiljm.

lo$es wirhin r

subsidiary

m sbibued b

idffil

.he

nonconlrolli4 in&Bls den ifdar Esulb

vithoul 1o$ of emtol, is lcod.n for d m eqlity tra&tion, 6 tatMtios wid tie omm in then capeiq a oh6. Fot puch66 ftom non-mtulling intssb, the ditrmce ba.d dy cdsjderaiion pdd md rhe Elevot shre acquired ofrhe carrying value ofn r ssols ofthe subsididT is rsorden in equiry. Gains oi lsses on dispssls 10 non-oonlrolling idffib m als. reoded in equiq. A chmge in rhe .r*D6hip

If rhe Ghup lose contol ovd

D€Boerias

mout

the

of a subsidi!ry,

a subsidiary,

it:

6er5 (includins sed{ill) dd lhbiliii.s ofthe tubsidiory, tne canfing inldl md ih. omulaiive tushrion difftn6 esrded in

of my nonantulling

Oe fiir value of ny invetuent '@ived, r*ioed dd dy suplN o donoit ir the consolidared shhenl df €hpiehNile itmne, Roldsifie lh€ p€Fnfs slsE ofmmponda prdiously @ogniz.d in OCI lo rhe coGolidahn sbtnflr ofconpi.hdtue hmne or Ebined ffings, as appropdaE.

Rsenizs

the fair value of the

€adedion

tllmiltmilmil

Thn polcy n in @od{kne wirh PFRS

10,

CaEoliAd?d

Fiwid Sdem,l'

Cnrrsd ir Accoutrriq Policig policie adoFen dc consiscnl uitn lhce of d. previoN c.lddr yee, .xcepl thd rhe Grcup h6 ldoden the followins ne* aqmrin! ponoucemmb shing Isurryl,20l6. AdoDtion oflhese lromuncondts did nol hrv. dy si8nilicmi inpict d rhe ialci. GFUp\ finsoial position or perfomsce nnl6s oln@ise The &counring

i rd PIIts 10, PFITS 12.ad P AS 24,Inedt

r Am.db.nr! E"tina: ,lppbb,t the CoNlrldlion Ewptkn . An..dD.rt ro PFRS 1r, r4donth's lor A.q'isttiN of rtuzttt i" roi!'t OrtuiN . PFRS 11, R4tldor! D.lordl ActuM . An.dnerr3 ro ?as l,riEld@Inrrirts . Ab.ndm€ ero PAS 16 r.d PAS33,aui;li.di.'otA.tettablM.lhod'of D?pt .idion ud Inodrzdi., . An.hdn.Ilr 1o PAs 16 .d PAs 41,,kticulttrc: Bwu Plartx . Ane.dDenr! b PAS 27, tgity Mdhod in Seputu Fiw.*'l SMa . Amurf Imp.ov.netrr b PFRS!20I? - 7014 C!.lc . Ab..dn.bl1o PFRS 5, Crea4 in Mdrodt oI Ditpotdl . mendn.nt to PFRS 7,,td'i.i'" Cr,tutt . Am.nlae b PrRs 7,,,1?/.rrlit! ofth.An nba2"atu PFRS 7to con Ldt d I4tuin Firon rnstuMt An.ndD.trlroPASl9,rtr.od Ie: M@*a Isu ', whn n$.Ituin Anqdneli ro PAS 3{, rn r,ru. of l{tuion'Ek ^4|ordl Fi,Mcial

Rqd'

Sltdlrft, Ini.rpretdlor .nd Ao.dn€hll ElIe.t|l. Sub.{Cuent to D...nb.r31.2016 fie G6up vill adop. .he iland.ds ed intapr.larim cnmcraicd b.lar qhd l]ls b@De *psr rhe adoption ofthese new, cf@tive Exo.pl s ofieviso indrcated il'e Grcup d6 'ot r*ised md mended shdards dd tuw thilippine In@rFrcbtion 10 hav. a sierifioi impool ot Na

Acoutrtitrg

ioPFp..s t\ au|i.arw oftt s.ope of th. st'nlad (P'n ot,4rtt4! I''prorM b PFRss 2014 - 2015 (yd.) 'I1E mendnda old0 that tne dislosm Equimenb in PFRS 12, oths ihd rhose rehling !o summdizd fmcial infodrtion, apply lo m .nntyt interest in o subsididf, ljoinl lene or s ssociaL (or ! poI1ion of ils inteE t in ajoinl ve!tuE or m sseie) dar is clBsified (o included in a disposal gbup that is cldsifien) a held for sale.

Arqdnent

'Ille mddnents do nol hflc sy impd on th€ Crup's nmdal pGition md resula 6f op€htion TheGbup U include the nquiFd disclGurcs in ils 2017 ensolid.tcd firoci.l

rmmtmm!ilr

Anordd.rt!

ro PAs 7. s&r.n..r of c..h Flo*. Db.lduts Iniri.dv. 'ne mendinenb to PAs 7 r€qDiE m enr y to provide disclsuEs thd e,abl. 6e6 offine.ial sen.nts lo .valuL chugs in liobili.ies disinA from linmcing aclivilies, idclDdine bolh ohmg6 sisirg Fom c6h nows ud non{ssh chflgE Guch s foreign excl'm8e gains or l6set. On inilial rppliotion of Llie dmdndb, enrities de no. Equned b O.vide cdpdative inrmalid forpraciins periods E topplicolion oithe modmots is pemiftn.

ADDIi€lion ofdendnenb qiu

Am.ndd.trb b PAS

12,

6uh

in additiond disolosuB in the 2017 consolidoted

1r&fr. TM, R.cqntioh

D.lMd

Asald

fDmcial

VrEaIh..l

dddmenb clfiry ftat d mrit n..ds ro cdsi&r whethr la{ laa rcsticts lhc so!rc.s of b\obl. pDt s agFiNl Nhici it may nake deduclions on rh. sssl oftkr deducrible rmpor'ry difieEne FunnmoE, rhe mddnda sovide gliddce d hoa d en.ily shoDld ddmine tutuE Lxoblc pofils rd *ploir lh. cjrcumslllG jn vhich l,rable prclil Dry i.clnde il'e The

Foolery of sore

ff.

asd

for moE thm then errying

mour.

apply the mendrnents rcrsp@lilely. uosevs, on initial applicdion of chDle in rhe openinE equ,ty ofrhe edlie$ cdpft.iw period nay be rseni&d in opdins .etored emincs ior iD anoths @Dponenr ofequ,9, 6 rppopride). withour sllsariry 1be cnmse besen openins Ebinen mings ad oth{ amponst ofequiry. Enliris applying ots relici mB1 dGolse ilat iact. lsly lppliation otlte mendmdrl n

Entities rhe

required

mendnmt.

Th*

rhe

mendme'b ue nd *peded

Aneldn.nll

to PFRS 2,

ro have

ay inplcr

on tne

Goup

,t aE rrt d PryMaa cl6t{Eolion

66EIIPWI TMdN

ond

M6w^.nt ofsnu&

mddnenls to PFRS 2 add6 tl'Fe nain e6: the ellesb ofvesting condirioN on the of r c.sh{edled 3h&-b6red Di}ddr l@ridi the cldsilicalid of . sh@bded paymdl lrtusolion rh n l $ldcndt fc.t]E ior anhholding d obligrtionsi od th. ,cmuring {heE a nodification ro rhe rems rd conditim of a shft-ba$d piynen. Ltu&.ion chdgls its cldsincaftn Aon cah setLd lo equily s.nhd. Tne

n*rendt

On adoprion, entilie m requiFd b dpply n\€ mmd'rdts wirhoul relaling prior p.riods, bul rehospetive applislion ir prmin d if el.ct d fd aU thr.. Mendnenls rnd iiotner cnteria ue mer Erly +pliatior of dr mm.indt is pemiftd.

Th. Croup is ss.$iru

PFPS

totenli.l offol ollhc mcndsenrs

a@liddd fimcid

L, Rt arclron cont@ ,ith cwlMt l5 esblishes a ner live*tp nodel thar *ill

apply b Benue &isine toh Mhdl sith cuslomd. Und.r PFRS I5, r.venu h tecd4d ar d mounl thd Fl eels lhe oonsidflrrion to which m enrit exped b be enritl€d in exchas! for tufring geds or s.nie 10 . clslomd. The principle in PIRS I5 pbvide a more slructored rypooh !o meu.irg dd Eogniz'ng PFRS

nill[tililftrl

fie

nes Evenle silr&rd h oppli€bl. lo all enlirics ed will suD.ncd. all cuftnl fl.nuc rMsnirion requir€mob uder PFRss. Eirher r tull or modified rtuspr.rile applicdion G d fo' murl phods b.gimng on d afte tdu!) l. 201 3.

'.qun

The Gbup is cun€nrly

Pfps9. Finmi,t PFRS 9 Eflecrl all

l8tudk:

6sesing

ItuMt

pi6$

of ihe

rhe impacl

ofPFPS I J dd plss ro adopr rhe

nn@ial instruenE p@j*r sd Eplmes

PAS 39,

sb{tard on

]C,imtd,

Me6rE .,r.mdallpreviousverionsof PFRS9 Thestudad intodu€s nN rcqui€md* far .l6sifi*1io dd n.srden! imraimd! lnd h.4. rccounriry. PFRS 9 is efaediw for snnal p€rio<ls b€ginning on or aner Jmuary 1, 2013, {nn e&ly ipplicdid pedired Retosp€tive rpplication is equired, bLt providing contmlivc iniomalid is nol mnpulsory. For hodg. Munlin& tne requiremenls e geneBlly applied Reasnhianann

pr6p€dively, wirh sone linnen *€prions.

'ne adoption of PFRS 9 vill havc s ctret o t e olNificdion sd neslllment of rhe Gmupt fimcial dseb ad inprimst nerhodolos/ fd 66cial 6sets, but qill h.vc no itnpacl on the clssifidion dd ne$llMenl of th. Croup's linmcial liabilitie. Tle adopiion will also hNe o efad on rhe Group\ ,?plicarion ofhedge acomrins md on the doEr of its crcdit Amendne.t! to PAS 2q Annuol

In'yMb

ntz8uta a AMitu t Jobt Vtu d b

PFRss 201,1 - 2016

Fah lal@

cycl.)

etnol

meodmeft cldit rhar m mrit that is a venrue capir.l o.gdiation, or olhd qdirying otily, n.y .le! al inili.l l@enilion on s invesirenl'by'invEhot b6is. ro neasse ib inlesbenb in ssociabs mdjoinr lentu ar fan vdue thrcugh profit or lo$ ]h.y also cls$ rhat ir d dtity thal is not self m inv.sddl 6tE hs o irteFst i! o aseiare or joiDt vmtuft lhar is d invohent enri9, rhe entiq may, when lpplyins the equity ndhod, ele! to relain rhc aan lahe nesurdd applied by lhd invsb.n. entit Ndaie or j inve$rert edity 6smiare\ or joint vset inhsb in 3ubsididi.s. This .letior js nade sepdrly fd @h iiv*tndt mtity Ncialc oi joinl ventuc, ct the l,&. of de drre an *hich (a) oe iDvdbenl .',tity oseide orjoinr ventu is innialy Eosnizedi (b) d'. ssoci0tc orjoinl voft 6e.on6 d invsbent enri$ dd (c) rhe investndl .nlily 6s@iale orjoint venft 6rsr besnes a p3Mt. It mddmd& should h. aplied retospEtiyel, *irh ealie. rpplicdion The

'Ihe crcup b dsesing th. potertiol ed@l

An.dr.nr

ro PAS 40,

Iny61i.

ofth. merdrenb

Pm!.rty,

ib m6oli&Ed

fiochl

Tnuf.a

of ltrrgtu..t Pmp..ty prcp€dy, including propsly uds

clai& shm d endq should tufd snsruc.id d ddelopmdt i ., d ou1 of invetndi pop.rty. Ir'e men chdgc in Ne (cN wien de popefry meetr, d @s ro nee! rhe definnion of inv€ltnenl popefry md there is evidde ofrbe chds! in use. A nerc .hdgc in mo4emefs iftnritu 'IXe mend,amb

pbpdty does no! prclide elidedce ofa chd3. in se. Tie mmtnnenb shdDld b€ posp..tivoly rptlicd lo ohog6 in w inat Nur on oruns lhe besinning of t]l. muol EDorting p€iod in rhich rhe dtiry fc. appliB th. m.ndtnents. Rot osp€dive applisrior is only p€mitted ii this is posiblc wilhoul lhe e olnindsignt rhe use df

The Gbup is

sssing

the

poldlill .fer oflh. dendrenb o' tu aMlidaed nnscid

flflils[|milmil

Philippin.

.rpEbtion IFRIC-22, Fo4lt, C@ac! TMddioN ard Atuaw

Tle inrstEdion cleifis tlar in ddmiding rh. spol.xchme. iaL io use on irilial E@gnilion of th. rcla1ed ds.! .xteNe or incomc (or pd of ii) on rhe dffignirion of a nm-Doneby asel or non,monebry li$ility rclatiry io advo€ mnsidetuio4 .hc dat of rhe ralwrion h rh. dale on rhich d entily inni.lly rsgnias lh. nonmdet ty 6sel o! non-Donclrry li$ilig uising parmenb or reeipb in advfle, l\d .he fron lhc .ti!.ne @rsidenlton lftnd. m 'ulriple enrity mui ddemine a dat of t!. tdserions fd @h t.ymenl or F6ipl of adloe considemlid. Ille intrprcLlim @y be eplien on r tuUy tupedive bail. Eiiries tay apply the inlorpetanoD p@spetiEly b rll 6eb, *pemes dd incone in i. scoo.lh3l4. initially recolnidd dn or rftd the b.gimi4 oi th. E oning perioi in wl'ich rh€ e'tit) 6nr 4plies rhe inteer.lrlion d lhe bogimine of a pnor Fponing period pHenred as conptudive infom.lim in the nmcial shreneft ofrhe Epon,q peiod in which Ur. cnlily fis1 applie tle inlerpFtstion. 'Ille Croup k osesing tie potertial efl*r ofthe inrs!ftbtion on its €Mlida@d

nnsoirl

Under rhe rew sbdfl4 lesees *ill no lo$d .lasi& thcir lees s eilhs opeding or finmce lcM in &cddan€ wilh PAS 17, ,.aer tuiner, lssffi will apply rhe singled nodel Under this nodel, will rssniu rhe ase16 dd iel.Ld liabililid for most lses on rhet md Ecogniz int€€t on th. balanca .nd subs.qundy, will d.p@ia& lne lese lee liabiliriB in then pmfit or loss. kdes rirh a cm of I2 nonlhs or l6s or lor which rhe undrlyidg aset is of loN value *dplod lrcn rhse Equirmeft.

l6ss

sh*,

,s*

subsbliolly uohsgFd 6 rhe nN sbded c ies fo dd $e principles oi le$or ,@uiing uder PAS 17. lasm, howeve., liU b. sluird to di$lose more infdmalion in then fDMcial slalm.nte, p€lticulely o tie dsk exposE to Esidul valu.. Enritid roy st adopr PFRS I 6 bur only if rhey hav€ also idopLd PFRS I 5. !v.en adopting PFRS t 6. b mrity is pedft&n b Ds. eiih.r r tull rcrGpeotive or a mldined tusp*.ile apprNh, rith options to e oedi t"nsnion Eliefs. The

acoutinA by le$o6

The

u'oup .cunendJ

An.ndn..r.

s*3ingk

inp&r of adoptngPrRS

PIRS l0 .hd PAs23- s.lc

itt Affi.te t Jobt Vatu 'ne meddnmts lddEs trc cdllid b€twFn

u Catuitdin

16.

oJ,4stu

tun

lrwtor Md

PFRS l0 md PAS 23 in daling with th. lo$ of oonbol ofu subsidiary tnat is sold o. cdntibuled to m ssooiolo orjoim v€ne. The mendnents ssode d jdinr v-ture iNolvs cldify rhat a tull gain or los is when a t!rofs ro . businN s deined in PFRS 3, ,6jnes Canbindio8. A'y grin ot lo$ resling ton lie sale

jgg'ad

mntiburion of

stst On

uN€litd

ssd

ihd

inv*d'

ndt

cmrilul.

buires, howd,

intdBls in lh. dsootote or joint

vme.

'senized

only

Jduary I3, 2016. the linmcial Reponhg Slondo.d! Coucil pc9.ned the o.igin.l

ofll

util

lne

.fietile

Intditioml A@untirg St 'd.rds nay Bdd h6 coDplered ib broader Evid of rh. resoroh pDjd o' .qDily acmuring thd md dfotber 6p€cts of&@unltng rsulr in the sinplilication of&courlirg fo suh tusdions daeofJeu.ry l,2016 for 6s@ial6

said mendrnenrs

rhe

sd jo'Dt v€nnlH.

1tililil:ilnil!ilt

Sunnory ol Signilicanl Aaounrilg Policis Revenu Recodiliot Rsenue is reosliad to rhe exrdt thal it is probable rhai lh. enmic b.refits uill flow to the Grolp bd rh. rev.n@ cm bc roliably m4uEd rcglrdlss of shen the pa)md is being dide Rolenu is msued ai $e fiir value ofthe ansidsarions reeiled or ie.ivlbL, o*tng irto account 6.r&rually delin.d tms ofplyment md excludiry des or duty. The G@up Neses i6 dene .lmgcndts o€Finst sp*ific cirsis in older rd dtuine if ir is etirg a trimipal or agenl. The Gnup hs cmcluded rhd n is eting d pdncipll in all ofils rwenue sroAmenb sine n i! lhe piimary oblbor ir all lhe Evsue mgeDent , has picina lalilude md h also expscd lo invdlory rd cftdit ns*s. 'Ihe sF.inc ltesririd cdtrria desoib.d b.lov nBl ale be mer b€fore

BOUo

reopized.

fton oil tuIs is recqriz.d s in@mo al lhc time ofprodrction. Rewdue il ih. 6ir value olthe eonsidemrion Eeived. Revenue

osumd

S.le ofeleolnciry uing renemble eners/ ir rhe Gmup is tusniftd rhrug! lh. tdsmission linc

Inbed inmne

Eosnizd s

rhe inte€sl

whctwe!

deigrftd

&crue lrling

inro

the

nsuEd.t

electicity gensared by

by rh€ bu,€r. for a

rmur

rh€

effediv. yield

lhc

Miscelldcous inoome inclnds time wiri.s chdAes, dividend it.me, renb1 inmme dd gait m sale oftuspotutim .4uipnml. Revdue is Hognized *hen rhe Ghup s nglt to re€ive me

Cah md Csh Eouivalot

C6i inclndes cash on hmd dd in banks. Csh cquivaldtr m shofr tem, hiSbly liquid bvstndb thdd.sdily mrvshbterohommoubof c4sh lh originllmtuities of rhE (l) nolhs o le$ lim the d,bs of&qui3itid ad ibar e subje.t ro m i'significd'is* of

Frocid lmtument 'Ih. Cout rMgnias o li@ci'l as tr a frmcial liabiliq in llle @solidared s@mdt of finscial position vhen il b*om€ a parly 1o l1l0 contactul po sidns ofth. inston nt PNhs6 or sales of frmcial 6sea thal rcquiE deliw.y of a$ets wilhin rhe lime li me .sbblishod by Ecll,lion or mnvention in rhe tu*eQle e F6!!ird on rhe ddemdt dtl..

I|utMmrfl[n[mI

hniat Pkognio, drll MeMenet Findciil aseb {irhin i\e scoF of PAS 39 * cldsified a enh.r nmdol ss.t .t FVPL, loans md t*ivablei hold lo malurit {HTM) iNest nenl5 o! avdlabl+foHale (AFs) fmciil ds6. d appopritu. Finmcial lhbiliriB de cl'ssifi€d a eirher fmncill liabilities ar lVPl or olhs findcial liabilities. The clssificalion d.phds on lhc purtoso for which the iDvdlnenrl re acauiEd ed the G@up ddmines rhe cldsification of the finmcial iBhnedb a! inilial reblnirion dd, {hs. allo*ed dd appspf,ac, Hvdule lhis desjgmlion .1 eah limcial All finmcial dseb e inniiuy l@gniad al llt value plus, i! lhe o6e offmflcial 6sds not at !vPL, dtedy aftibuLble tcdion co*. All fDrcial liabilitie e iniriauy leogniad at fair lalue, l$s, i the cae of finmcial liabilitis nor ar F\'PL, diedy lttibulablc tselioD @st. Th. crcuD s fimdal ssets irolude ljnmial 6sd ar lvPL ad Iotu dd ftc.ivabld md ia nnmcial liabilitiB oflhe nltr. of olha lindcial lirbilitis.

ndlment bM

cl*ifi€rid.

IinMcial ds.ts th.i dc clssificd 6 loes od reivlbls re nedred al doniDd cci uing lhe e6*ti!e ideren de GIR) ndhod. AndiDd ost is $loulaLi bybli'g irto aHut dy dircob! pidim and LrN&lim Fsis on eqnisitioq der the Deriod b mtorily. Amofriaiion of discolnb. DEnillm md bflsaction cosb e bld dirc.dy lo llE consolid'tn sdenmt of The $bsequen.

Detuhdion ol Fair

ior lsmcial 6sels depend or rhe

Yal@

Frir valE is tte pri€ rhar would b. @ived ro sell d aset oi paid to ttosfer a lbbil,ty in m ordsly bsadion bdM ndk ! pilticipmls 0l tE msDEmst da€. The fan value h.sllmdl is b6ed on de pBDprion rhd the tuetion 10 $ll lh.

. .

In the pdrcipal m*01 fu lhc ssd or lAbifiq, or In lhc absenc ofa prircipal mrke! in ih. nost or'v{lageou markd for the 6sel ot

liabiliq

Tll. princitd orthe nsr dvrbseous mflkd nusr be rssiblc io by ihe Coup lhe fail !.lue of m dser d a lAbilt is D€ured Bing the dsmplims tnd twket pdicipmrs vould ue rhen pdcjng ih. s.l oi liabil,ty, ssumiq drat twket pdidpmts &i in thet aononic best The Grcup us6 volu.tion IrchDiqu6 tnat

apprpriate in lh. circunsloles md for *hich

suffcierl drt. e inpub aild nininizing lhe Be of unabs. €bl. inpub. arailable ro

nesc

fan vdue, muirnizins d€ use

ofrel*dl obs!F!61.

All 6seir md liabiliries for which frn vafue is msui.d oi dislGed in rhe fDdcial sbcmdls m Bresorizen within the fan lahr hi.mhy, decrjb€d s follo*s, baed on lhc lowest lml inpu! lhat is s4rificm110 tte fdr valE m$uEment d a vhole:

Quoed (unadj6t!d) m*d priG in aclive nekeb foi iddtical 6sl5 Valuilion L.hniques lor whioh rhe lo*en level inpul thot is signitmi valu m6u€mmr is dituly or indnedy obd.nobL kvel 3 - valulion rehniqus lq which rhe lolen level inpul thd is significmr value maucmml is uobseruble L€vel

L€vel 2 -

tut[l$ililmmil

@ lfug,iad in de nnocial tuDenb on a recmins btris, rhe Goup ddemins *herher tufm have occmd hdem lrek in the hisehy by p{r€sing €legodanon (b6ed on th. lov.sl I{.1 intul lhat tu siSnificnl to lho fan loluc msDFncnr 6 a whole) ar L\e end of ern Epofring penod. For 6sel5 md liabilnies dEt

ditrert b the fii.

value ton orh.r obsedable c|llmt n&k i IrmoctioB in lhe insrument or b6ed on a vllurion bchniqne wnose v&i,bl6 include oly dah nom obsedable lwkd. L\e Gdup rcdgnids rhe dfierene beNH rhe bmacrio price dd fin vahe (a Day ditrcren€) in cdsolidarcd slalem.nl of

Wnft

lhe

nosadion

Drice in a non-acrive

compr.hensivc incomc unl€s ir

qulifiE

neket

for F@gnition

li.

sone other tW€

ofdsd

liibility

I' css rheft

vdiables u$d is mad. ofdala Nhich is not o69cnable- llF difiercnce b€seen rhe lm&tion prie md model valu. is only rsogli@d in tne m@lidared sbemdt of comEehensive incone whs ihe inDub be.me ob€edabL or shd the irslrunenl is nedod of @Snizing dercs8nizd. For @h lrosactior, de Grcup dcGnines dE 'pproFhre dE Dd I difieftnce mour.

L.ds [@s

md md

Rr*ivabl.s

r#iubls m finmcial asd th fix.d d dekminoblo r4mcnb ud nxei i.s lhat e not ouohd in d acrive Mlet, Tnw m not enbren ido th rhe incnlion of imDediat or shod-bn resle sd m nor desisftd a AFS frdcial ss.ls or llMciat EFb ar

natr

Affs inilial meaurenent, lom

ftc.ivlbld

subsequmdy Dedued

mftiu d cod

usirg rhe EIR Detftod, les allovmce for impdmdi Andtiad msl is @lculalel by raldn! inb amur my dimdr o. pldiun on acquisilim md l€ dd @ m inre8El pan of lhe EIR. clcified undd llln ea&gory e rhe coupt 6h dd 6h equivdtnb, eeivables !d Htichn

El!3!!id3$ls@dli!!asEl!E!il!!!€r!I{!! Fimcial 6se13 md flmoirl liabilities ct FvPL irclude fnmcial dset and finmciol liabililtes held for hding purposs. dsivarive i8tumll, or thN desiglllei by Dmagenenr upon inilial recoslition a at FvtL, subjsi

oftbo follosi'g crirsial

desislrrion eliDin&s d si8rifiody Fd!6 lhe indsisrot t€bedr lhat ,ould olhwis dis. &om ndurirg lho ssels or lubilities or @gnizing gaids r lsses oD $em

the

liab nies ft pad of a gout of fmooicl @q fimd'l liabiliri* otbolh nmagld md lh.ir F fomsce se evaluted dn a fNn valu. bsis, in ecordme docmaled ;st twsemdt or irwsbenr shcgr'; or fie fimcial iEtu.t cdbin d db.dd.d ddivalive. unls rhe emb€dded drivaiivc does not significully nodiry $o c6h Ilos or it is clee, vilh lirde d no dtl}5is, tial it Nould nol be seFrdety rNrded. tbe 6seb

whicb wirh r

s$6 dd lindcial liabililis al FVPL e mrden in the cotuolid.l.d slalement of fnsci.l psilion at foir valuc Cnuees in fair value ft Fneded in the .msoli&bd shben. of compEhe6ive insne. Inbest €m.d ar incmd is Hord€d in ifte$ idcon. ot expene! Findcial

Dilidend incom. is Ecognized eo.dinB b lh. tcms oflhe conhcr, or

*hd

the

riglt

of lhe

tililill|lflllllll

Mhent h6 be.n 61ablish.d. Cl6sified 6 finmdd asb ar FVPL m $e Ooup\ D&ktuble pDrposes dd inveshdt in gllf clDb shdes 0{ote 7).

PllradlsElllliallsass Derivaliv. IiMcial iNtsdll (inoluding bifusLd

€quity secuitis neld for tuding

sy, @ iniljally conhcr is mr*d into md is rubsequaily renedued al fairlalue Any gdns or lo$rs risin8 fron chmges in f.irr€lue ol lhc deriv ile (eeF doso &oounted for 6 rcoundns he4e, is blen didly ro rhe consolidatn sdflmr of onprehensive incde Ddd 'Orhd inade". Tl)e ddivalive is onied as dse. Rhd the fan value is pNilive md s liabilig/ rhen lh. fair volue is neeBtive. r$Erized d

fair

mlu d

.mb.ddcd d.rivoljvet, if

rhe dab ar which rhe dsivarive

q!sdi!4!B!!4!i!r&!

e irilially rcoenizd .1lhc fair voluc ol d'e s'sidsriior reeived lss dielly ltibuLbl€ t!6dion ast. After initial Emsnition, orher fiMcid lhbnitid m subseqDendy nedued d eonizd mt using th. EIR nelhod. GaiN ed los6 m All findcial liabili.i€

in the cdsolidaled shtemdt of@npEhersive ineDe iDpairn, s well as lnmugh the donizarion

psN.

Clssifien

udd lnn cdeaory

the

lsp3i@!!&iB!@!E!4rs!, 'Ine GrcuF

ases

.l @h reptrling

Cnupt Moub

dote

vhetiq

who

L\e liabilnies

payable

fi'mcirl

'€mgnizi deftco8riz.d

dd &ded expdscs md l@s

or lmup of

fimcial eseb

A tDscid 6sd or a group of finmcirl nsd is dened ro be impaired ii .nd otly if, lh* is obj*iive evidence of inpaim.nt s . r€uit ol one or moE ev.nb rhar h6 ccuftd ind fte initial r@snilion of lhc 6$l (' immed los evmr') sd rhar lB evml (ord.nll) h6 m impacr on rhe estinaed tutore ah noas ofth. finmcial ssd u rhe goup of finflcial dseb thd cd be rcliably estimated Evidsce ofimpaimenr my inclu& indistoN $ rhe bo'o*er or a grcup ofbono*ds is expsimcing si$ifimt fbdcial dift"roulq, defuh or delinquency in inLi.sl d ptncitd !6,merls, lh€ p@b$iliq ind they *ill mb ba{mptcy d orhe! fitmcial mrg4iarion ed *hse obseoible d& indic& lhal lh.rc is meduable d*rcG in the esind.d tutorc csh flo{s, suoh s otag6 iD d6 or sronic condilim lhal @ftlote tridt

'Ihocroupf6t6s6ses{hetherobjst e cviden€ of inp.iment *ists individully for ftrUcial ss* rhal ft itrdividuuy signiliol r colledively for nnmial 6* rhd e no1

rh,t fl impaim.nt los on l(6 rd 'ide'e ar soniEd con ha bea incDftd, lhc mount ollhe los is ndd.d a rhe

individully iigrincdr rlhere

objeolive

ftceivablE cffiied difieFnc. bdreen tbe asett c{rying mounl md lhe pEsmr value of ennnatd fDtorc @h Aows (.rcludinS inure exp@&d credit 10$6 rnd hrve nd bs incured) disomLd sl lhe nnmcial 6er! oriEi'sl EIR (i.e., the EIR osputd a1 initirl l@gninonl

dffiined tha! no objolivc evidflce of iDpiment exisb for d individ!.lly 6s$ed li'mcial 3sr l@ or Eetuable, *herher sig'nnmt d no! tho Ner is included in a gsDp of If it is

*itb 6inil{ crcdii risk chaFcterislic ud rhat gtuup of linMchl sels is individu.lly 6ss$d for inpaimenr dd mue.ljle1y 6se$ed for impdmst as6 rhd Nhich D inpaiment los h or mlinug b b. €.o8niei @ nd included i. t collecliv.

finflciil

fftis[||||ilill|ffi

fte .,rrying aHunr.

e of on aUosd€ for inpaimenl los siall b. l@eniad in lhe con$ltu l.d slalcnenl of

amourt oflhc sset h rcduc.d dhugh th.

The

mour

of rhe

mout

ollhe imtaiment lo$ d@@es, dd lh. &cre6. cm be aher .he inpainen! *a ftcosnizd, rhe previously Hognizei imp,imert lo$ is BeNed. Any subsequenl @eEal ofs impaimdl lss is recogni*d in the onsdlidared sbEnmr of onpFheBiv€ in@ne, ro rhe rhar rhe car.yins value ofthe 6sl d6 not exoocn uhal would hale b.€n rh. Monian cost ol lhc revNl d.& had rheE b€n no impainenr Ecosriz€d. in a subsgumr psiod, rhe

€ld.d objecliv.ly b m elent @udng

*nr

lf m AFS nnmcid sst is inpaiE!, b mout camprising the di,teFnce be$€en il5 cost (ret ol dy principrr pdybed bd dodizrion) rd it cuMt fan vahe, les ay nnpaimdt l6s lrclioury r@cn'ad in .dsolidlied sblemenl of cmpEheGive income, n rosfdEn non $c onsolidard sbrmmr of chdg* in equit b sbrmenr of obprehsive incone. Inpaimenl rev.rels in resp*t of .quiry iNl.undts clNified s AFS finucirl sets @ ,ol rMg,iad in rhe mnsolidarei srement ofaDpreheaire in@ne. Revesrk ofimpaimenr lss on debr iBtudts d reve6ed thouah the €dolidared shEndr of €apr.bedive inen , if rhe incr@ in fot value of th. iNlrumdt m b. objcctilely Elated to d denl ooouing lner thc impaiment lcs ws Ho8niEd in consolidared stment ofcompFhem e income. Itte dounr of revem.l is linicd lo lhc mounl1h.1 brider thc .srying vahe oflh. dobt inrlrumcrt to shal t could have heen had dr* b*n no inpaimmt in the fid placa. Derecodilim of Firmciol Aset sdLiabililies A flfucirl ad (o. *heF applicrblq r pd of a sonp of flmcial

. .

s*)

drsgniad vh.n:

6on th. as* have expired; or the Grcu! ha kafdtd subshridly all rhe dsks dd rrysds of$. 6sor, or h6 asmen u obligdio' b pay dem in tull *irhod mrsial delay ro ! rhirdrany under a b6s{ircu3h" almgemmr rd neiths tufdnd nor ein.d subsi.rtiauy all the rislc md wdds ollhe 6set, but h6 lldsfftd conLol oflhe 6set, the rishb to receive

cah

flos

de GbDp ha rsfeftd th. rtbll to sciv. c6h flovs fm { set o' h6 €nteEd inlo pssthDugh mgddl od h6 Deiths lrarsfeftd rcr di'ed sDhdtully all rhe risk3 dd Ev'rds of the 6sd nor tusfmd mntul of tne ase! rhe aset is eogliDd to th. .xlenl of the Groupt contiNing involvemdi in lhe ,$l. Conlinui'g iNolv€ment rhdbkes tne fom ofi swmr* over rhe tufeftd 'g is n6ui€d ar rhe lower of rh. oriSind c.1rying mount of oc dsd dd rhe ldidm dodl of cmidenrid th.1 $. cDup @!ld be FquiEd ro Epay.

whft a

Finmcial liabilities ft deftcogliDd rhd the obligdion urd6 lhe liabiliq is disondge4 cmeued oh6 expired. wl@ d *istin8 fiMcirl liabiliq is repbed by eorher iom rhe sme lender on subdslially difa* bmq orde tems ofm existi4 liabilily m subsht.lly modified, snch d e$huge d nodifistion is bcNled 6 r &re.qlirion ollhe original lilbili9 dd the @gni.ion of a n* liability, ad lb. difidd6 in ihe Espr.tile c,rrying modb ir Ecogriad in the coMlid*cn srdeDenl ofconprehensive inmme.

Ofis.nine Fimcial Inslrlmeots Finucial a* md flucirl lisbililies re ofise. md lh. ne1 mout Fponed in rhe @Bolidared $Lhml of frdcial position ii md oly if, t]u. n a cmdy enfor€ble lelrl rigl b offse. rhe moDb md thft is m ine ion ro sede m a nelbasis, orto ftoli4 tle 6sd md

'tmgnizd

|nilililn|[ilmil

-15sedle .hc

liibility sibulhslsly.

E!p!d!4!!$!-ad-E!E4!4e44$4! Prpdd dD.lM dd orh.r cudt ss.ls p€rllin lo esou€ ol p6r *enll and ,iom wiich

tuft

ecoDonic bmefib

contolled by rhe c'onp 6 a Esult exp..kn b flor !o rhe Gbup.

Pro6!tv- Pldt 0d Eouionenr PrcPery, plmt rd eluipnen. e slal.d ot cosl lcs oeumulated deplet on, d.p@iction od moniaton dd any.elmulared impaiment loses. The inirial cdr ofthe popedr. plmr dd .quipmenr 6nsis ofib purchEe prie. including .ny inpod duli.s, lrrd ud ey di'diy rbibubble ess of bdngiq th. NB lo j$ vo ing andition md lmrion for ib inrsded use been put iDto opedio', such 6 Epain rd b rhe srde of €hprhdsive in€n in lhe paiod in vhich rhe 6.t e incuftd. h situ ids where jt cm be cledly demo'sden $d tne .xpendinG hale Gulted in e incr6e in ttle fie €Dmic benefib expebd lo b€ obbir.d iion rhe us of m itm of propeit,, plur dd eqlipmdl beyond ia ongiMlt ,5ss! studard of pefomdc€, lho erpenditns N opihlized 6 u lddnioml a( of pmps9, pl'nt sd

lxpendilurcs incuftd aii.r tn. fixod osls hale

nainbm€, m nomlly

ch'rged

ots

*hd

irem of propefry, plet md equipnenl beAins n be6n6 avrilable foi ir to epabL use. i.e , whm n is in the l@dion md mndirid nde$ory be ofopemring in the rr the of rhe d& lhal ft. is nsner inrdded by mdagflent Dep€iarion clNifed a held fd s.le (or inclu&d in o distacal goup that is olEsifien 6 held for sal€) in

DoFoiatior

css

ecordmca wirh PFRS 5, ivo,{metu,4:seb EeldJt lnle dab the dset is deEcogliz.d.

dlid

o DirdktudOp4diN,adrl\.

ft depl&d using rhe unib-of-produdion molhod @opul.d b6.d on .stiinare oftovcd tgsdes. The depldion h& includes rhe explohlion dd d*lopmert coi ofthe pmducing oilfi.Lrr. Wells, platfolm and orher facilities

Einjedim sldd (FcRs) lnd prodlolion welh i, tne eeorhemal towd D,u! tuel colldio' 'rdstFiell-line nethod owr$e ueful liv6 ofrhe plflr de depEciateJ using th. nte heful 'sb. decmined one in rhe mndition n@$a loi ih.e 6sets to be lil: ofrhoso 6sets sholl be dpable of opeBring in rhe lllse inladed by mmogdert.

Lsd imp@veDenb co6if of b€tuenr!, sn prepediu md siL imprcvmdis rhd sdy lud for ib intnded use. I1ese includ. .xc*€tio[ nor-itrfrsdctu urility iGrdhiion, drive*ays, sideNdls, pr*ing lob, od fen6. lfld imprcvmenb ft deprciaLd ovd 5

'€s.

mmmmilln|il

t6Orher

oler

pbpst}. pldt ad .{uipndr e deF*iar€d dd anoniz.d srimred Netul liv.s oflhe sseb d follows:

Dsing rhe

shighrline neihod

rhe

Po*er

Odice

plu!

fCRS md production

flnie

*elk 5 1

orher equipnent

2-1

W.lls in proeE$ p€n{in lo those developmenr 6sb Elding to lne Seoice C.nbd (SC) *here oil in olmercial qudlitie e di@vsed dd e subs.quddy re.lssifi.d 10 W.lls, platloms dd olh.r feilitie" shown unds'Propr!,, plut od equipmenf'r@ur in tne ansolid,ted sbbmmt of nmcial psition uDd comdci.l plod@lim. D.lLlim of$.Us in prcgds aaadc4 upon ksLr b prop€rty, plul ud e'ruipDenl od Elabd nain 6sb m in rhe con'lition ree$'ry for it to be capable of opsarins in the lrrmd idedded by 6mgment. Cnnstu.tion in ptogr* represenb pmpetyi pldr md €quipment uder cmshdion dd ft sbed ar mn. Tnis includes de cd1 ofcoshctim io inclu& natedals, labd, profFsioml coGtuction in prosEs is nd deprei.red bomwin8 mts dd olher dirody abibnbble nnlil such tine the cdtuhc.ion is empl.Ld.

f6,

es.

md morlialion nethods N rdiercd periodically to depHi{ion md moniadon 6nsis&nl ihe *pecred panm ofecdonic b.n.n6 fton ilm of potedy, plst sd equipm€nr. wlq th. 6*ls d€ rolird or orhwise disposed of, the con md de Ehred aeutulald depldion. depr-iation dd dodizsrion otd dy d.mulaed impaime fion tlr. asunlr ud sy rsulti'g gain or I6s is Ended in lne €nslid:red sbemdl of The usetul lives md deplerior!

.nsuro

lid

P!&srd

d.trciario

*in

lhc penod md nerhod of dgldion,

q!!!4!o!!Es!!!!s

'nie Grcup follows lh. full cost Derhod of rmurins for *plontion €sG dMin.d m lhc bndiv.ly 66is ofeach SC aH. Unde. thi3 ndho4 all exoloralid cosls rclati'g ro easi SC delded p.ndi4 dotemin ron of sheiherrhe ma mnbins oil Hwes in @mscial quantit'es.

'ne erploFtion ssb rcl.ting lo lie

SC whft oil in @nDerci'l qmtities dc discoleEd 10 w€lls, platro'm Dd orhq facilites" shoqn under "Propqq! plmr od equipment' in the msoUdaLd st t!mm1 of linrncial positio! npon subdbtial onplelion of wihen ofi in de developnent saAe. 1)'r the orher hrd, sll csb rehli's ro d abmdon d SC

subs.qenlly

6l6ified

lhe yetu lhe SCs nave

abmdonen ifde rca is pemufltly absndoned. SCs ft *pired andor .hft r. no d.linit! plds lor 6dher *plomtion md/or developmdt.

6nsidd.d pmdenlt

Defeftd Dryelomenr Cosb - G.o&m.l included in O0ls Noncm't Assb All cosb incuftd in lhc g@logicll ud geoph,sisl activilies such a cosb of rotogFphis\ glologi€l ed grcphysial studie, .ishb of i@$ b proteti.s to mnd@t tiN stodies, saldies md orher *pmes of gologists, g@physi€l cEw, or orhen conducring thG. sodies e smh 6sb m incuftd. chdged !o prclil or lN in dle

'€e

Ifrhe Hul6 dfinitial 8lologiol dd gsphysical adivniB Fv*l rhe presd@ ofgeolhemal rslre rhal sill EquiE tu rhft aDlo6tion rd drilUng subs.ludt expldalio dtd dilling cosir m scmulared ed dcfd.d under lhe 'Defen€d sdhedal c61s" ecoul ir thc

|I|ilnCII|I[ilililr

-t7onsolntrled

Ths

t . .

eose

sbbndt of finmchl p6irion. irclud. th. fouoving:

Cosb

aseiatd

CosE

oldrilling cxplmlory

eBtudion

of teDponry frcilitiesl .xpldarory rype 3hrignDhic cs uells, poiding dtuination of Nhether the wells cm pod!@ prcv.! Fsflesj sd Cosb ol lMl adninishtion, fime, sEnsal md sEuiq sfli6, snrface faciliri$ md othd loc.l .osB in prpadng lor dd supponing rhe &ill &.ivnies, erc. incured dx.ing rhe drilling of explordory relk.

wirh the

add

If esls condrct d on the diillcd .xpl@tory welh Eveal thd the. vells snot pl.due proved resees. rhe epiblized charged ro exp€ns qcepr when nmageDent decids to ce the mproduclive wells foi leycling or uaL disp6al.

6s ft

pojed's rechnical feaibilit d ammscial viibility b prc explodion md elalurid Ns.ts sball b. mlssinrd io top.ity, plarl md .quipm€nt 4d dep@iaied ecodingly. One

the

est blish.d, rhe

Defd.n D.v.lom.nl CosL - Sola Poad Pbicct included in Orher Nonowl A$cs Th6e re ccb incmd in the developnmt ofthe SolI lmjd. This include 6sb incr.n fdr rhe constlcrim oflb. ase. md othe dirccdy airriburabL exp.nse duing rhc oNlruclion ofde Inloneible Assels

Inhsible ffeb icquired sepdrely ft beauFd on inithl lugnilion ai @sl. Ille 6t of inhgibl. Lls.ts rcquiFd is lhcn ian voluc s al tE d.L of rcquisiion. Follosing inirial Ecogritioq itusible sseb m tried d 6n le$ rernul !d moniation ed &omuloted

modi2ld ov.r thcir ueirl e@omis 1i!6 md ssssd for inpaimcnt uh.nds lh* is u indimtion th't tne inbgible asr my be inpair.d. Th. uodianion p.iod md .he dodizstion nethod lor d inlrngible ael wid' r 6ric uefDl liG m sic{cd al lei rl lhe {d of@h Eportng p.riod, Chogs in rhe *pad @ftIlife orlllc expecred padm ofcosuptid of futuft eonobic bh.fts dbodicd ir th. Ner is @coubd for by ohmgin8 ihe moniadon period or netho( 6 rpp@piare, sd e Mbd 6 chdg.s in

lnran8ible aseb

*ilh fniL liv4

donianon *poBe on irtongible 0s€ts wilh finir€ livs is Eognirn in the llllen.nl of cospt iensire iDmne h dE exp.nse cftgory ansisenl *irh the fuction ol tne inlangibl€ The

Amortidion

is compured usins rhe

tuishlline

Dethod ovs lh. eslinatcd

uetul livs (EttL) of

lntugible d* with indefrir 6etul Iives e not moniad, but @ lesbd for inpaimdr dnualu, eirher individu.lly or d rI. cGU Lv.l. l1E 6se$moi of i'dennib life is di.lrd ddudly 10 detemibe vheo'ertne indefirib liG coftinus ro be suFponanb. f.oq de chdse in usetul life tron ind€finiE b fDie is nad. on r pospc.tive b6is. Gains o. l6ses disiry ftom d@gnilion of M irt ngibL 6set @ me6md 6 rhe dilTerene ben?.d ih. net dnposrl pr@ds {d the csrying mour of rhe Net and arc @gnizcd ir lie sLbment of pbli. d lN shm rhe 6set is dmgnized.

rt!t!ffimllmI

-t3lnvesir'.enr Pbbedies ,nvefimr prcpedies 6nsis1 of lmd h.ld for capi&l lppEcialion or

sbt

d ar

con

imDat$enr

Fnt,l b olhe6. Lod

value.

'Itle ini.ial cdl ol the invesnr.nr prp.nies mmpris of pNhs tri€ ond my dir@rly ottsibnbble msb ofbingiq rlc ds.t b ils wo*ing @ldition. ExpendirG incur.d.nt $e iNabent psp€rtid hs b6r put irto op€mtion, such 6 E aiN dd n.inemce, G nomally cheeed io dp€nse in the yqr when @sll m incmci. lD sitoations *hm ir 6n h. cldly denorotitd rhat thc .xp.ndi$E irve Esulbd in m incred. in lhc futu. emmic benefib dDecled io b. obt ine! ioD tle 6e ofd ici of inv*lmdi tolslies beyo.d irs oiginally 6s6sen shdard of prfommc., lh. dpcnditud @ spiblizi a m addilional csr of

Inlesbmr pDpeq is del@gnizd {hd oithd il is be.' disposed of q {hen lh. iNeslrnml prop.dy is D€mmdtly wnndnw 6om ce md no futur. edomic bdefil i! exp€ctn from ia dGp6al. Any gains or ldses on $e fttiFmert or dispNl of invghst prcpedis f recqni*d in th. coNolidored slaroent ofcompEhdive inom. in lh. yd of EtiEmert or Trdsfe6 m Dade to iNesmr pspstes vhen, dd only when. lheE is a ch le in ae, *idenced by .hc .nd ai oue.ooupalron, coDDen€mmr ofd op€radng l*. to dolhe. Frry or by tlo end of oortucrion o. developnedt Trssfd r. nrdc fton inv6bent plopd'es vhen. md only when, lherc is a charUe in use, evidencen by di osm.n€ndt of dev.loDmmr w navi$rosell In&resl in Joinr obemtioG A joint op€dion is i joidr o]msemdt wheEby the

orugenent hav€ rigtu b The Grcup

rsgnizd

rhe

pdiff

ds6, dd obliSltioN

in Elalion to

irtftn

colmencddt ofotn4{eouprtion

thar have joint

enlrol b

for the liobililies, Elarin8

of rhe rhe

rjoint opdalion its:

. 6sels, includincibshreof my a*held joinily . lidiliries,includingibiheof dylirbnidesinc!ftdjoindl . ftven@ fion rhe s.lc ol ils shm oflhe oltpur dsing ton $r joinl opemlion . sh@ oflh€ soue 6on dre sle of rhe oulput by $e joinr opedion . *pees. inclDdinS ill shm oldy exFD$s incu.edjointb

'nE Goup aoounrl for dE 6sd it cdntuk 4d rh. liabilnies it ingm, the spdtes it incun tnd ihe shm ofirdde iha! ir ems ion the sale of cnde oil by thejoiii opttliots,

lnvdtndi

in a

Joii Ve'tue

A joinr vmrG (rv) b a ty!. orjoinl dosoenr wheEby rhe pati.s thol havejoint cotul 6r lhc llmgemd n,ve righb b rhe nd N* of d\. joirt v.nnft. Joinr @tul is rhe cdhlctually lgEed shdins of 6nhl ofd mtu8mdl shioh qist only {hd d*kids aboul dE re1*dl acririlies F,tniE unsimous oonsenl oftne p€ni* shding control. Inv€t dr in I w i! &cobted for ud€r the equiq nethod of eourin3.

ontul ovr P.ttowind, Prior rq beonin8 ! joinr As dis.nsed in Nole 2, th. GrcuD l6t lentu in 2014, PtuWind wa &oolnled for 6 r subsididt in previos ye6. h '.mrdd@ virh PFRS, rh. CrouD me6uEs md rsslizes my r€lain d invdtnor d ib fair hlu. rhm ofrhe is los of cdtul ovs a snbsididy. Any difieren€ bese.he c.rryitg pac.e& nom vdue rebined invest Denl od upon loss ofcdlrol dd lhe tuir ofrhe snbsidi'ry

lh6

uod

|l!il|Iflilttr0muil

disp.sal is rcognizen in pmtu or

los a

u*lizd

gain on

hnaiment

remeaEDenr ofinvshent

of Nonfpdcial A$eb The Gronp 6s6s6 at erch Eponing dale rhclhd theE is indicdion rhd an sscl (e.9., p6pei9, planr dd equipnenr, iNeshmr pmpenis, defs.en ms. md inbsible noy be inpaircd. Ifmy such indi€nM dists, orvha mru.l impaimdr t6.ing foi d

6sd)

6s.t is rquired, the Gnup dirorE rhe 6sd\ €ryerabte mout. An lMt mour is 'wBble rhe hkla of m dst or dh-gdeding unit\ fan vdu. l6s costs !o scu md its !alu. h lst md b de&mined for an irdividu.l N! uls lhe Nel d6 not gde6te 6h inflows tnat N loEely independent of th6e lilm orher aseb or grcup of

's*.

\{lleF t!. csrying mounl of o 6sl exceds irs l@qable moug the 6sd is ansideF! inpliEd md is wift. dM to ib lt.ryenble mount. ln a$e$ing value in e. the *rin red tutur. cah flovs e dissunLd h lncir prgenl vdu. using a discout raE $!1r.fl@15 cwnl tw*d ase$Dent ofrh€ tire valu€ of Doney md the rkks specific to the 6sd. ln debminin8 f.n vatue l6s co* ro sell. tu appbFi& ulua.ion nodel is Dsed. Ilrese .dcllations e mmb@lod by lalulid muliples, qDted she pi6 for publicly t ded compmis or orher alril le fair lalm indiarox. An ssesmenr is 6ade rt ach Eponing drr€

rsgnized ihpiimen.lo$es my cxisbj the Group nBles

b *helnd rheft i! dy indicdion lnd prviouly my hav6 &cresed. Ilsuoh indicrrion

no longs exbt or sliDrb of rilemble

moui

A pEviously

reqliz.d inp3imrl

los is Evmed ont ifthm h^ b*n i chdge in .h. gtimts uscd lo d.temine tho sset's raovdable moul sine llE 161 impdmat los w6 remBnized. Ifthar is the cae, the c.rrying

mod rhc

of the

as*

bM.i b ib Mlrable doui nd incrcsed mounl6noi

qceed

$rryina amoml lhal vould hav. been dolmined, Dd ofdepldion, deprsidion md Do inpaiment los b*n @gnidd for th. dsd in pdor )rs.

moniztion h:d such

seel

6s.t

cdied

@ogrizd

ddu.d

dsolidrred shen. of 6hpr.hdsiv. income unl6s ihe moun! in Nhioh 6e dE qexal is ftared s a Evalurion incs.. in the

recoas comon srax ar ptr value od additioml paid iD capibl in ex*3 orlh. bbl contiburions ffiived over rh€ a8sre8ne pd ul@ ofrh..qlily shms. men 0'e Goup issus dd. rha de cla of sdk r so61c o@ut n Minlained for @h cl6s of sre* dd lhe lDbq of shffi issue!. IDoFmenral @b incurd die y eibulabL ro thc islue of Dry sh:E ft shom in equity a a ddudid nom pooc.is, net oft&{. whe. oy Demb.r ofthe Grcup pucb66 th. CrcuD\ c.piLl stook (Fe6ury sh.H) the onsidsrlid pai4 including ary otriblhble ilcEmenr,l msb, is denuftd fron eqDity itdibutabl. 10 lh. Coup\ equiry holdm util the shfts re cm€lled, Eissued d dbDos.d ol WheF suh si@s se subsequendy $ld ot reissu.d. my coNidmlim rcceiv.d, n l of oy diedy afribuhble incm66l tusolim 0615 md the rehred rd efaeb is iDclud€d in equity.

dlircup

emirgs repreDt lFDuled emin$ of rhe dritiB rhin rh. Goup le$ dividmds declftd sd wirh mnsidmrion of my chdgls in &counlirg tolicie fld etu applied fr@tivelr. Ilt *Lined emin3s oflhc Ctroup od ib subsidieis ft ilailabl. fr divid.nds orly trpon approval md d€ldion of@h of dFn r*potv. BOD. ReLined

Eouilv Equiry

R6de

6ee€ i made np ofeguig tuscrions orber lhd .quiq conlribulions lds ftsulthr ftoh inc@. or dectle of oDe6hiD sirhour los ofc@tol.

such as gnin

til[ruiltmilil|lt

PEpe!!s&r&!4qsta!!l!!sq!p!&!, Deposits for is

lrsbd

a. fie b.

c. d.

futur sbck subscrittions is @odei b$ed on tne Eieemrble mount Mei*n dd 1i$iliti6 unles rhe follNing itens *eft nd fd dNincdion 6 part of

under

unissued

i.dt€r.d ir

authdiad c.bilal sloc* oi

rhe

6rr.rlj

tne

dlit

is insnfficienr ro cowr rhe mounl of shdes

There is BOD alploval on lhe prcpos.d hcMe in audoriad detosi. w6 Fc.ivcd by tho Gro!p); fieE is slmkhold6 approval ofsaid pmpded increasq md The application for rhe appnval of rhc popos.d incE6e hs

spjtal $ock (for rhich

dd Ex.hd$ Comissior

6le! virh rhe

S€uitis

(SEC),

Epregr subscndon loynenls wiled frcm pGpedive in*sbd for th. Gouph commm shd6 wtich re yd b be issued npon apFoval by !h. SEC ollhe orplication for incme in lle aurhdiz.d opilal s1@*. Ilis will b. eolssifiei 10 'Capibl sd*' upon iss@ce Deposib

crmt h

to compre tne

mouna

doul d

neaurtd a1 tr. for rhc omnl od prior psiods hvs used or plid b the drrim adho i.s. Th. la: 016 md (he enaded d rcp.nlng da&. de rhose rhar docled d substurively

ud liabiliri.s

expe.ied 10 'ss b€ @ovcei iFn

is prclided sing tne &bnce sh*r liability merhod d all rmponry difftr€s d tie Eponing dare btuen rhe h bes of6s.ll od liobililres od tnen c'rrying adouns for fi tucial €podhA purtoses.

Deid.d tq

bx [ibilili.s r. recogriad for a]l tuahle tmpoary difid.€ *epr ro rhe extot .h.1 ihe dcfcftd d lhhiliris {ise 6on .h.: a) inilitl @grition ofSood*ill; or b) th. inilt.l Ecognirion ofil aet d liabilily in a lrs.olion wnich is not i) i bDsin.s conbitalioni Dd ii) 11th. lim. of dE trsacrioq rfred neirbd .eoutit8 pDfit nor bxble pmfit oi l6s. DeferEn

d ds.ts e reooFizen for all deducrible bponry difatdoes virh (trin qeprions, md car.yfNdd bdcfils of uuscd tq cEdib 6om *€$ mininum cotpomre opeding Io$ .itrydt (NOLCO), b rhe d!.n! incon k 0vlCIT) ov.r RCIT od Dus.d 'd .hot i is probable th,r sufficiot tuble incon uil be r€ilable agaiGr which lhe d.drclible tempoBry difrftmes md cdryfodad b€ncfils of unused d mdib ftom .xe$ MCIT md uusei NOLO cd b. ulilizcd, Defsren h dsds, how.vs, e nol raog'ized *hd it dis frcm dF !) inilial of m dset d liability in a Fansaotion rhd is ndt , blsinc$ 'wglition oombimtionr md b) d rhe tihe ofllmadion, afierls reirher rhe acounling in@me nor tuble Defered

nie cr.yin8 dount

of&f.ftd

m Fviwed

eeh ietorting drle 3nd Enuced ro lhe will b€ alailable lo alov all or pd ofde defered b ssd b be utilizd Ur@gnizn deferol d ro rhe *knt I'id it h6 beoome p@babl€ rbd futuic each reFonile dote, sd @ '@3rizd t&\oble in@me will aUN rhe defftd d asets b b€ recowred T[e Qdup do.s not 'wgni4 defmd d Nets dd d.f.dti ts liobilnis thd will Fe6. dltit8 the incoDe d holid.y t&\ 6setl

exienl lhat i1 h no loneer pDbable that sutrcimi

hble

in@mc

tf,tlr]|iltmil!fl

Defeftd d isls od liabihies ft m*ured at the b Ere rhrt e applicable to the p€.iod sh.n lhe dset is raliad oi lh. liabilily is $tded. based on d r es (dd d lavs) thal hav. bem

seten e suhbrively emr.d 6 ofthe Eponing

dare.

Deleftd d relaling b nds Hogriad oulsidc p@ft or Ios G eognizn oubide profi d los. Defftd d nem ft Mognidd in eftldi@ b rhe 0nddlying ddsaclid ei.lis in }tfit or lo$ or olhd compreheNirc in@mc.

Defftd t x dsets dd defftd l.{ liabiliie @ oficuenr

lax sseb orainst

entiq md the sme

lMion

c!renl

liabililies

aurhority

olTs.l if a legauy

-d

lhe

enldsbL

defeftd hes relde

riCl* exnts io s1 to the

rme tuble

PeNton Cosl

'lte nd defned benelit liahility d asd is rhe a$Eg& oflh. pl.st vrluc oftE d.tncd boelii obliedon d th. .nd oflhc E orti,g Deriod Fducad by lhe fair lalw of plm ?sls (ir my). adjunen for my etrd of limiiins r mt ddDed bendn 6sc1b lh.6sd eilin8. Th. set ceili'g is rhe p@nl value of my Mnmic bd.fB availoble in lhe fom of etunds toD rhe plu or rcduclions ir tunle ontibnlioG io tne plu. The con of proliding b.n.fiB und& lh. derined b€Deft pmjeftd un cEnit merhod.

Defined benefil rcsls

empise

plss

acbeially dftmined $ing lh.

tne following:

. Ner incre$ o. l]le n.1 &fm.d b.n fit liabiliry or . RmsuMeft of nd defred b*fit lhbilitv or'sr ds.l whioh irolude .@rt seeice ccb, pd sdic. @sL md 8.ins ot lo$es d no' mutine $dlmetu ffi recoglibd a e!pm? in ib. cdsolidftd shrnert of cmpEbtuiv. income. Pd sdic. osts remgnizcd when pl$ mendnei or cunaihst @w. moub re t alt Jden p€riodicdlly bJ deFndmr qulificd & iDnes

Sfli* 6ts

Th*

Not inieresl on tie nd defred beneft liabiliB or 6set k rh. chdec du tg do p€riod in rhe nei detned b€.efi. lirbiliry d as.r lh!! &ises frcD tie Fssage af tine lhich is ddmin d by ryplying th. dismut 6te b6ei o gdenmot bmds b the n.t d.lo.! tnefit lilbilig or 6sd zd 6 *p€ae d inen. in lhe Nd incE on the nd defDed benent liability d set is 'wg onsolidried s6hd. of ompr.hersiv. in6ne.

Rem€trmmenb conprising &tueid gdns ud lo$es, rtu on plfl 614 dd dy ch{ge in oflhe 6s ceilins (dcluding n€l inieHt on defned b.n ft liabiliq) @ Eo3lized immedialcly ir ocl in rhe period i' which they dise. Rdesremenrl m nor eLsili.d io @Dsolidared tunent of{dpi.bensiv. insne in subsequdt peiods. rhe efTe.!

Plo 6seb @ 6sd

r lons:I€m esployee bdeil fu.d or qurUrying iNu@ce rhey b. paid direorly ro When m lMkd pi€ lh. Crolp. fitu c8h flors valm b esriD&d by disoutDg exp-red is available, dE fiir ofplan 'l* plm 6sets md llt. n8tui9 or usina ! discoukal. lhat rcllers bodr dE risk as@iatd *i!\ lhe cxpeolod disporol d,e& ofrhose Ns* (o.. iflhe! h8ve no manfty, rhe exp€dd pdiod unlil the serdenmt ofthe Elaed obltrtioB). rlhc frn vatu ofrhe pld asel! iJ highet thd Oie pEsenr value ofrhe defined bd.tu obligotjon, lhe mescmmr of th. Buling defirei b€ne6r as.t is thar

held by

ssd re nd avaihble b the creditG ofde G@up nor cd Fair Elu ofplo 6Els is haen on narkd prie infom.lion.

policies. Plan

ntfitiltfl[I|iln

limiien b lhe pltsmr ulue ofecdnomic b.defiB .vailable in rhe fom ofrfunds f.om rh. plon ot rducrions in ftre sntibulions 10 the plu The Grcupk .ight ro be Finbm.d of sft. or oll ofrhe expmditu requned to s.tlle a d.fined benen. obl*Etion is eoeriad 6 a s.pmre dsd ar f.n val@ uhd md only *h.n

Einbudemert is viturlly Cosls

4din.

Exmnses

Oil s.ducrion opdaline .xpdses e c6t incutrn to pI dle and sell crudc oil ilvotory, incl0di4 trmsportatio, slorage md loadin!, mda o.h.6

Ccb of electiciry sil* pen in 10 dire.t oost in geneclinE el*ticity poaer whioh inolu{tes opmlirg nd einldme c6b (o&\0 fd poNr plart sd fluid collection md ftinjeclion systen OCRS) depEcialim dd oths cosls diredy aits'bured to ploducin8 elelriciq. CdeBl md d,ainitutue exposes

remgnian

*pen*

a incwd

constiot.

.ss

ofadminisbriry

rhe

busin.$.

Costs

Assl R.liEmdt Obljsalim rARO\ Pwisim fd sd retnd.nl obliealion G ruogniEd rhen lhe rccoCnjtion cirsia fo. a sovidon e nd. Tic Goup rMsnia the pfts.nl vtluc olths m$ s ARO seb (itclud.d undd .Pop.fr), plant r.d eluipnent sd aRO liabilit. ) For dE Ensable eners/, lhe Group deprdhbs ARO 6s6 .n t 3bigillinc basis over die esimaLd stul life (EUL) ofthe Flaed ase. oi rh. sewiee @ntad rem, whichdet h shorter, or wiftn oIT B a Esula of inpoimenl of$e Elden asd.

For dE oil op€tuion, rhe GbuD d.trccjoles ARO Tho Group

monia

expse ov4lh. The Gbnp

ba*d

on unil

ARO liabiliry uin8 $e effeorive inleBr nethod

sr&

Egulirly

asd

contur

6s*s

the prcvGion for ARO

olpodwlron nerhod

dd aognires rccdion

adjNts ih. re1.&d

liabiliq

is. oi @nloint a le6e, is b€sed on th. substcnce oI dtuimlid of Nhether o dd rcquires m sssnent of wh.rha the tulillnenr of the lh. .ltrgemdi ar i'ceprio {tab,'lmsmed or ds.ll, md tl. ruaeddl onvets a Mmgmenr is depdddl on $e ue of s specific 'g ighr lo w ihe Net. A MssDenr is mdc afcr ineplion of tne lse onry if de (l) orthe The

rhse h r chsge in contlotrd rels. drher rhm. rendd or *6ion of th. mgems! a EEwal option is exsised o m .ilension grmted. ules thd tem ofdre rm4al oi exteNidn rd initally includei in lhe l6e tedl lha is o chsge in rhe ddmimtion oi whelhd tulfilLnenr is dep.nddt on o spr.ified as.q

rhw

is a

subsdri.l chdgc

lo tbe

ssd.

ld. reobti.g sl'all colmd€ or c.6e frcn rhe dab Bhen thc grc rise ro the resse$ddt for ey ofrhe s€ndid abov., ed a1lhe chmge in cftumdces d e of r.nqal or dmion pei.d fd lh. 3@nd smeio Wl*

rsse$ment

nade,

tilril|lilliltfil

rhe risr, dd b.n.lit of oundhip ofde 6sd palmdls !. Fogrizd 6 d Expose in th. cldsifiod 6 opsding le,s. Op.hting lese coGolidztd sbhml of onpretosive incone on a tui8lt-line bais oler lhe lese ren Mininm le6e patbenls se on r shighlline b6is wiiL rhe vrirble re is on $. ems oflhe le6ed contact. sogDizd 6 r expse baed'@g'iz€d

l-#es

where the

le$q r.hiN slbslonthlt ,ll

Re3ach &d Dcvelopmflr cosb R.s@n msb ee dp€ns.d 6 incurd. Ddelopmert exp€ndirr* on m individull pljed rmsnizd s d inhsibL ssel wnen fie Group d ddoNtate oll oftle followinSl

rhe technical

f*ibility

of cmtleting dE i'tergible

6sd

so ihat

vill

b€

aloilable for

. ib inldtion to complere sd ib abilit ro Be q eu th. sseq r i@ rhe 6d will genebte tutui. rmronic benefibi I rhe availabil,rt of re$!rces 10 complete the 6sdi dd r rhe ability 10 ne6uc reliably rhe exp€ndi@ dunng ddelopment, Ltft$ dd

orhd Fl.&d finocing chdses on bo@w.d fi[ds used ro finme the acqubni@ ond conshcrion ofa quali8ing ssei (ircludcd uder pop€ny, plur dd equipmdt) e apitali@d ro rhe apEopriaE as.l @outs. Capilaliztion ofb.tu*ing osts commdcas when me .xpddituts sd borc*bs @sb e b€ine incur.! duing the @nstudion sd rebi.d &tivilies rccesry rd prepire th. 4srt for its inlended use E in pbgt$. Ii is sutended duing *enden perio& in whioh &live d*elopment is int pred dd cN when sDbshriauy au rh. tcrivitig ro prep@ rh. 4s.t for its inlendod se F @nple€. fie €Fiialiario is b6ed on rhe 'eces'y retlted awrae. bmwins e6l. The

bono*i'8 6srs €pi6liz.d 6

shigbllin Inte$

mdnod ovq llle

expede on

los

psrt

olpoFeny, plmr dd equipn tt

enined uetul Uve

tud borowin8s is

of th.

ltagnirn

scls.

@ofrized usins the

Dsi4 lh. EIR mdnod ovs rhe bm of the

FoEio ctrdcv-dmoniroted Ttmdioc md Tldlatid 'tlc consolidd€d 6mcial sbbedts d. ,r6.rted in US OoUm, which tu th. Ctoup s rnncrion'i dd pEsdr.1ion c!renoy. leh entiq in lhe G@up ddmin€ ils ou l ctionil cudcy sd nm inclu&d in the FDsoli&red finucial s@nenll ofceh erti!, m 6*uftd using thtl funolio@l cuscy. Tdsicli@ in fGie! cuftn is e iniriiuy @tded in th. fuclional crency Ere d the d.@ oflh. rssoclion. Monebry asers ad liabilities deDninftd in foEign cmnciB e rcl@slabd ar rhe firdionil crency olosiry rde d rhe reponid8 dae. All dilTdn6 e ulen 10 lllc @nsolidared senml of compEhe6ive itu@e sirh th. dc.Dtion of difresces on foEkn cufficy borowinSs th.r pbvide, ifdy, a hcdge agpn$ a nd i,v6hent in ! foEisn entiq. m* N llten djEtt b eqliq undl dispNl ofrhe nd invetn4! ar vhich line ln.y @ |Qsli-d in the onsolidcled sbrment of€mprchdsile ircme, Non-mon€bry itm rhar e mduEd in tems of hiJbncd si it foreig' c'mnc) ft tmslded using rh. exchsg. ral6 6 ar rhe dars of initial tMlions, Non mdnebry ilms mdDred ar ion Ehc in a foEis, cftncy d. tslalei 6ing the *hm8t ales ot thc dare whd the fair valE *s dtuin d.

ilmilurmru|[l

cmncy oftbc Coup's immediaie subsididy, P.lrcCrced sd ils subsidioi6, nmely MGI 4d ?.lrosois, G lhe Philippine leso. As at repoding dde, rhe dset dd liabilitits ofrhese subsidi'ies G tmslikd i o the prese alion c@cy of rhe Gioup (the Us Dolltrt ar lne exchmse db al t]l. rctoning d,rc md the ansolid.t d ststemonr ofamprehmsiv. incmc a4ouns ft tdsloled ot rcishred Ne6g. exchuSe mles for the )€d. ne ex.hmge ditr Mcas dsing on rhe tuldion e 6kd di@dy to "Cumularive teslatiot adjutnenf'ecomr in rhe equig s€rion of rh. @Mlidlied lhroenr of lidchl posiio Upo' disposrl ofa subsillidy, th. defer€d cunuhrive b$sldion adjuslsdr mout Ecosniz.d in equiq rchting lo o'd pdicule subsidiary is rccoelizd in the acolidted sbLmcnt of mDpEhssive incde Tho funciiorul

EeirA n-Nl

Pe Sbde Bsic eminSs (lst p€r shs m mmptcd on th. b6is ofrhe weighred arsage nunbd of shes outslodins dwins rhe ,€a lnd givirg rddct e efiecl lot dy s1o* dividends declftd Dilu&! @inss ps sb* e onputed on the b6is ofrhe r.iShLd .vdaCe nmbtr ofshfts otrtuding duing !h. )cd plus lhe weishred ivehge dmber ofordimry shffi tha. qould bc issued on de convssion ofau the dilulile potntial odin&y shes inb ddindT si'G

Obmlha S.menl 'nE cmupt opsatins businsd N orgmizd md m.g!d s.taL&ly !@diry ro rhe mture oft\e pbducb 4d swi6 prolide4 wirh eich s.gn.nl FpEsenring a shbgic busitss unil $ot off6 difleE.l Drcdud md swices od smes diffmt ndkell. Iitochl i'fomtion on bGines sgDenc h prMted in Nob 23 ro rhe consolidded fitucid sbbmenb Provisios d€ r@edzd when rhe Goup hs c pEsenr ohligrtion (leeal ot cotsbdivO 6 r Esult of a pan ernr, it is lobable lh{ d oudlor ofjsu6 embodying eononic bdeliB wiu be requied lo solde rhe obligation dd a ieliabL esdoe cm be nrd. of rb. mout ofrhe oblisarim. If the eIfer of tn.1in. lalu€ of money is n&iiol, povisio6 F deEmin.d by discoutirs lh. dpe.d tuft cah flows 11 r tre-t&r rde rh.t refl4b cllMt nekcl 6se$ne.a ofrhe dme valDe ofnoney o4 where 4propi.te $. riskr speciic to rhe liabili9 Whd di$ounting is ued, de ircse in rhe provisiot due b rhe p6saS! oftin. is rooe!@d 6 m irtrest qpense. Provisions d. revised d each repodi4 dai. dd adjsred to renet $e Elenb Alter ihe Rmnin! leriod Pcr yetu{d ev.nb $ot provide ddilion.l inlomation abour rhe Grcupt silu.iion d lhe rponirg date (adjNrins wenb) e r.lleolod ir th€ fDaciil 3bLndis, iruy Pon vw_end evob rhat ft nol adjudirg {otl m dirlded in rhe notes io finmcial sbrddL vhen

5. Sig.ificr Accoudi4 Judane!!, f,stimrld dd

A$umptro'3

linscial sbhenb in mnpljsc with PFRS rcquires lhe judeDents, estDfts md asumplions tnd 8ffecr rhe ftton d moub ofas6, liabilitid, ircom€ ud exrses dd disclosw of onlingen. as.ts dd oortingsi litbilili.s. Futu eveft my occu shiob will cse rhe asMplioN ued in 4 ar rhe .stmr6 ro judenent, reflded in lhe srinares dd dsuaptions ofsy chdg! in chmg. nr etrecrs conelidded firdcial 3brd.nts, 6 dey t€cone resntbly d.ffiinable The prcp@tion ofrhe coBolid.ted

Cmup ro

nik

|miltr[ilmm$il

-25

elind.s dd ssuptions @ cortinually evalur€d dd d beed on historicsl dt€liooeDdorlErfacrc,includingexpedionsof futuE.v.nblh r.b.lidedlobe Easonable under .he circmsianB. Judgnents,

pocs

ofaptlying tie Goupt r*outins policies, ndagenent ha nNde .h. lollowing apd ftoD lnce involving edibdioni Bhich ha rh. nasr sigrificsl cf{t an the mouna rec4riud in lhc cdsolidlted nmcial sbrment: In lhe

judgDenrs,

Deftminotion ol Fwtional

'ne mritid rilhin

ctu r

ddmine rhe firdiodl cDftncy b.sed on .comic subslance of mdedyirg circllmtuG Elevdt b @h htily virhin tne Croup. Tho P&€rt Compry\ tunctioml cftrcy is lhe US Dollr. nre tu Ftional cmmcy of PtuGrm dd MGI is rhe the Group

A3of Deccnb.r31,2016dd2015,rheG p\cunulati*tusldiondjustndtmountedlo t5.,10 eillionrd $2.55 nillion, esp*rively.

In?ainmt ud vnk-ofofDefenz.r at E plotuimc64 Tte Cmup ss*s inpaimcnl d dofd.d oil dploErion c6b whs fads dd circlNlanc.s sugget thrl lh. atrying oounr of the :st 6ay er@ed ill rMvdabL doul, u'til rhe GmuP h6 su,Iicieftdabtoddenine Gchnicalf.aibi ry md @mmcrcial viabiliry, defered oil *plomtion Gts ne.d not b. asessed for impaimenr. ftquie u inpainenr ?sssnert as sd ford in Etaldion aIMiMol R.lowd t.6 tuttoss

Fad md dddsdccs

lhal Nould

PFRS 6, F]+brution

ann

lor

t fie period for wnich rhe Grcup ha $e +!t b txploE in $e sp{ilio rs hs *pired or vill dpire in the nea fubre, md is not exp€ded io b€ Enewedl . Subshliv. erpodinrc on turlher explontion for md evallaiion ofnin ial Esowes in d'e sp€ifio da is neirhs hudgered nor tlmedi . ExploErion for md .lalu.tion of mineBl HoUffi in rhe specific aM ha!. noi Ld 10 lhc '

discov.ry ofconnerially viabL qMtiris of ninsal isu@s dd tlrc enlity h6 decided to dis@ntinue such adiviri6 in the speiic ar€4 sd is lik.ly ro Sulficient d& ens b indiel. dqq cllnoDsli a develoDhdr in lhe sp€cif1c proced, the .&ryirg mod ofrh€ explobtion dd .voludion 6set is ulikely to be l€oveEn in tuU ftod sucNin d{elopnent or hy s.le.

DoE approvd rh. qirhdmwol ofth. sc 47 (of6hoE Mindod ed Pdry) .ii.r th. cNnim agE.d to rlinquish the sc 47 bl@L This decision v6 b€sed on lhe dkring hid Selogical rist of rhe cllllqr psspe.t dd lcrd irvdbry, hol oI inteF* nw f'min*, dd givo the DOE rquiMen. of drilling ore well for SuhPhse 3. Conseqtrmlly,lh.6toup wDteofftne defeftd dpl@nd cos6 p€rtainins b tnis sfli4 cond&l douliry 10 $12,980 (se rn 20 r 6, rhe

As of DeeDbd 3l, 2016 dd 2015, lhe ouryi'g value of defmd oil exploialion @ss b $10.13 Billion ed$15.92 Dillion, Bpe.ilelyO.lor.ll)

moun&d

IilEflilttililill

c tas s dic d io, oI ra k I an ds enen t Judsnenr is requied b decmine rhrn th. Grcup hs joirt @nlrol oler o mgemeng *hich requhs m sssndt ollhe El.!ilt acliviries $d *to the deisioN in relation to rho$ rdiviries F{uiE lllmiDous c{rent. Judgndr is iequired lo classiry a joinl megenenl. ClaJsifying .he equires lh. Coup 10 6se$ dEn righri md ohltarions &isins fton 'lm8.mdt Sp*ifically. rhe Gmup mnsid*: the altrsendt. . The shctde ofrhe joinr dd8lndr - sh.rher il is sfuoturcd thowh a spmb lehicle . \llhd the @sement is stuctftd thmusi a sepdare *hicle, rhe G6up also onsideN rhe riEi s dd obligarim &isirg fmnl . lte legd fom of the sepamle vehicle . Thc tems of ine mnhdal mmEEimr . Orher facb dd cftmst n€- snsid.rcd or a c6e bv @ b6is

'nis6se$mc onen EquiH sisnifiorjndgndt. A difi.rcnlsnclusion oboul botb joinl mnbol dd wherhd $c Mdgddt i, a joinl opsalio or ! joinr lentu, nay mrdially inpacl

crcu!\ inv*tlb.nl in ! joint vtu (Ne 12) is tuctud in a s.pan& incoaoFhd ent,ry. 'ne Ooup ud lle pdis ro the rgenml only have fi. neh b lhe n l 6sell ofrhe joinr w.1e 6mud, de etu of rhe mlr..turl Mogoenl. Accordiqly, rhe joii almgdent is clssifred 'Irie

Copitalidrh

ot Derekprent

cotu

ms ft BpibUrd

in esid6c. wilh lhe !@unriry policy discN.n in Noc 4. oi csls G baen o' Msemenas judgnen. that dhnoloBicol ud Mmnic feGibilir_v is con6med, usurlly sho r prcducl d*elopmdt prcjed ha Hched a defo.d mileddne edding ro s eslablisieli p@jecr nmagment Dodel If rh. requiremdls for epiloljation ofdevelopmmi 6ts e not me! slch csls rc expi'sed.

Dwelopmenr

rilial €pialiation

Xsinde dd Asumorio's

Esmprions con.dinA .h. tutm and olher key $mes of srimrid uc.it inq ar lhe d& rhai h.vo a signifi@t rk* of caGins a turerial adjusnrenl 10 dre carrying mdi6 ofNell sd liabilnies vidin rhe ne{ nmcial yeu @ discuseJ beld.

Tle

key

reponing

Btindihe lhpoimdt The Goup

vherhs

PRi,ottz'

ib rc*iv.bles to alss impaimenl ar led. d d snu.l b6is. In deteminins inllimenl lo$ should be lffiden in the eMlid.l.d salmells of incone, rhe

Elids

judsnqa a b whetha dE. is uy obsedable dab indiBring rhat therc is t in rhc .stin.tei tul'E s,sh nNs fmn ia r€ivabl.s Tnk widoG jDolud6 dik inforailion ihoul thc fsm.iol .mdihon md ninnicrl pdtnenls oflhc nomally c@np m,les

nedmble

dec6.

l, 2016 md 2015, the c(rying vdu. of reoeivablA mour.d b $7.36 million million, Bpaiively. Accmulated impeiDenl los$ dour.d 1o $0.05 nillion Dd $0.05 dillim 6 ol DeMbor I I, 2016 sd 2015 (Note 3). No inp.im.nl 10$6 seF t@sniad As oi De@mber I

sd ir.59

Tic Goup cmis etuin deivativ. flmcirl iNlrMenll d fdr vduq *hich reqlns e of rccodtinS dlimlte ddjudgDelrl. Fan vdue ddemindim for d\tivaltues @ &s€d genmlly on curdt fword excimse rabs fd @ntu13 silh sinnr rolutig Profils. If P es e not Eadjly dd€miuble or if liqlid.tin! lho pdilios is E6onably eip€ld b rtret m{rkd pn€s,

lEil[|llnil$il

f.ir value is b,s€d or eirher inren l vllution nodels or mmsemst s 6rimb ofmout dur 6uld be realiDd under cDftnt adket cmdi.ions, 6smin3 d oderly liqunbdon over !

D.Mb6

31, 2016 dd 2015, lhe Coup hd a d.rilotile liability mouling lo nil lnd nillion, HF.iively $10.46 Gee Nore 19) Gin or derivdive moutin3 to $10.76 nillion md los on ddivative dounting ro $0.?3 million were ecogri-d in rhc s@n6. ofcmprehetuive in6ne in 2016 $d 2015, B!€.tively.

As of

Estituiry G.ot^elrnn FieLl Revtu* MGI p€rfomed volmdic Esede estimtion dd rmencd modeling ro ddmine dF r.ses ofde Miibd&a aeorhenal n.ld. As ! i.quiid.nl fd projet fiMciu, MGI .nC!g.d ot il5 oM @si thc New zerlmd tm Sincldr Knishr Mez (Sr,M) in 201 I ro unded:te . @mprehcnsive rhid parry r*h'icil Biew of the Mdbae geothml licld. nis ftvi{ includ.d dalysis of ihc 6se$md1 F fomed in-hoe by MGI 6 wll s a sepanc ud nmsicd nodelin! ofrhe Mribflm ftsde. SKM 6ede estinalion 'aurc. As lh. eonmic ssmtnms us.i nry chmge dd 6 addirioml sEolosiol infomdion is obtained duinA the opentioD of r 6eld, srituie of lgvmble rcs.de n.y ohdg.. Suh

chdgls my iapact the Cbupt €porkd iin{cial positio' ud Esulb, Nnich include: r lne carrying r:lue of*pldarion md dilurid ds.ti dd p6p.dy, plel ud equipmenrr . P.ovisim fu decombsioning n.y chdg. - rhere oh$ges to lt'c Esfle enimares d|.r .xpeclalioN aboul when suolr aciivnies will ccu Dd rhe assiatd es of tl*

Tho recoCnition dd elryirg !!lue ofdefeftd h ds* my chdgp dle b chm8.s in thejDdgDenb Egarding the exisbn€ dfsuch as.b dd in 61imo1es oftle lik€ly

Eeitui'1s Pwd O Resma Pmkd oil r*edes e slimd.s oft. mou$ ol oi1 rhar m b. economiciuy rd legruy tud 6on the Gmupt oil pdFnie. Ill. Gtuup cstiml€ ilr @mmrcid Bers bas€d on tbe bchnical amplioN dd is calculoled in aeordoF wid, ,€epred volundic mcrhods, sp{iiically lhe pohabilidc nethod ofsrituiidn. Prcblbilislic nethod ls IoM BEolosical. main@ring dd eonmic dot to gen@10 a of estiDaB md then as*i&d prcbabililies. '5gp The Goup ase$6 ils erimite ofpro!.n m.de on d unul b6is. All porcd Bd. *tn&s de subj.ci io Evision, .iiher upwd or domward, baed on ne* inromdion, slch 6 fiom developm€nr drilling md pmdudion adivitis d frcm chdgls in Mnoni. fooloE, including prcdut pri€, colraol &ms or devclopm€nr pl,ns. E(inat6 ofceds for unddelop.n or panidly d.lelo?en fields re subjd ro gE br mtuinty ovt oEn tutuF life fiu eninales ofEseees for fields thd e subshlially dweloped ud depled. For the penod end€d o$€mb€r 31, 2016 dEE l6wes for the Grbon 'tavelble us.d 10 cmnule thc dmLlion .a& uscd.

s.6. It

h6 be.n no stnifical chdge in Blirored sm. drimled mdnine Ecovdble Fsere

tuNtrililililnil

Lia

of P..p.nr, Pltut h.l EquipMl urul b6n d6 est Dded ueful ltues ofprcpsry, pl'nt Md equipnenl baed on exp€cred 6sd dilizarid a dchd.d d bBid* pla dd sr thol .lso considc! '8i.s expatcd futoR h hrologMl derclopmdts ,nd mdle beh,vior

E 6tumq Usfn 'Iho 6rcup

@ies

on m

Ir is posible lhar fltie resulb ofopmrions could b. ml.rially offeclcd by ohog6 in theso .slimo&s brcu3h about by ohdg€ in lhc fa.r6 nentioftd. a rcdudion in rne Bdnared usetul liv€s of plopflt plart md equipndt rould in.@ the rccoided depl.lioA &Frccidion dd dortiz3tion dp.re md der@e

D€€iber 3l. 2016 dd 2015, rhe Coup\ d.p@icble pop€fry, plmt ed equipnenr domlod 10 $130.77 million sd t80.71 nillion, rcsp€.tiwt (Nore l0). As of

Eslituihg lk?aitu nt af N.nJirMidl}RB (..9., prcp.ny, plm! dd equipn.n! Tie C@up ssesss impliment on ib nonfmcial 'sb{ols or ohmges i' drcDtuG indicare inv*tndt pr.pdties dd inbgibl. ss.ll) wh.n.ver b. Ecowmble. tnal the ca.ryine mourt of o asd may 'or For pbp€dy, pldl dd equipnenl md investndl toFrlies, r impaimot los h ftco8ni*d vhenevs rhe carryins mour of d 6sd meeds ib Fcovsabl. mout n. twvcBble monnt is lhe highs of d dsett n l selling pric sd valuc in E. Tie nd sellins pi€ is the lolth tu&tion vhiL vrlu. ir @ is rhe lmolnt olnrinrble fiom tl'e el€ of m 6sd in r 'nkL diso ircm lhc conrinni'g use ofe sset plest value ofeninitd futu 6h nos! dpec&d

from ils dirD6ol

end of ils uEfUl

life.

tuft

In d.tcmining th. pr6dt val@ otdrirotn mntinued ot prcpedy, fld e{uipbed

nak

.s1im0Ls

cah flovs exD.@d lo b. gddaiod IDm rhe

dd iN.shdt prcp€nis, rie Grcnp is r{uiEd dd dd sMolioN dFl oo narshlh aff*r rhe coBolidaGd fmmcbl slalments,

&tivilie in tle wesl Limprm Oilfield (WLO) remined on sNp€sior mode for rhe ld sevoh (l?) yem. Ihe invdnn nt in \rrLO incildcd in welh, Platfdm and Oln€r F&ilitiet' .MUt undd prcprq, plart and equipmmt in the €n$lid&d sllremdis of lnocial Dositio' moutei ro $6.66 nillion a of Dembe 31, 2016 sd 2015. Msagenot ssssed rhd rhe siid invehent is fully ecolenbl. 6 SC l4{ hd nor }d expiPd, wi.h &. l5-y* .xLnsior oi tE SC s rppored by rhe D€ptumt of Eneq/ (DOE), frcm D*rDb{ I3, 2010 to D*nbs 13, 2025 od in lhc vi.{ oflhe qisriry Edselopnenr erivitics led by Pi&in Ptuldn Ltd. (tilkin) of$. Urirci SLB ofAnsica. B6ed on oil pnd disljtg al Da€Dber I I, 2016, the pri€s have nor sme b€16* rhe bre*evd lcvcl lo! tne Conpoy in $ fs 6 ib WLO invehd is mn@ded. Th!s, no ihpaimenl {6 @og'ired for 2016 dd 2015. A3

di$n*.n

D@b€r I l,

pedining oil the

pric

ro de

Nole

10,

poductian

2016, tne CoDpmy H.ded d inpaimdt lo$ mouliry to 13.33 million in Gabon, Africo Eed for oil podndion. Irie Gbup belid.s lhal the low

l is u indi€ro. d\at the asets inpaimenl reding Gee Nore I0).

in lhe globd m&k

Comprybp€ on

nthl b. inpoired ud tha ptmpkd

E|[r!ruIililt!

The Elabd

balrces ofrhe Goup's nonfimoirl 6els follow (Noks t 0, I3 dd I5): 2016

Pbp€ty dd equipnent IntuEible 6se$

Inv6bmr

2015

$133,&70,569

i140,724,197

3,017,0.19

pmpdies

31117

1,233,236

!1,1t1

Eiindks ,lsst Retimnt OblisdiN 'ne Goup hs ldios l*ol obligrion 10 dMmmission or dhmmll. it3 ssets ielal.d b lh. oil produdion, seothenal ers$l Fojed ud eld power prcjeot d th. e'd of e@n respdile

sflice cont&t. In ddmining .h. anount ofprovisim for reslomlim cos6, 4umplioN Md *lisates e rcquired in iclalim io lhc *p@Ld ccls 10 t6lm sjl6 sd infBstncbE when such

Eoeria

ditutl.

prenl value of rhe oblisarion ro dd pad of ur. bold* ofthc FLl.d prcperty, plst ud cquitmhl whioh arc being depNilred Dd mdd4d on r staidlline hais over rhe us.tul life ofrhe rehred 6sd (for the me$able end$/) dd baed on uil of prodldiod (for lhe oil obligarid exjs&. The Crcup

€pihlizs i\. pemt

v.lue of this co$

The FlaGd brlmces oflhe GrcuD's

rhe

s.r

r.tndenl obligdion follw:

Perolnsa/ - oil produclim MGI ' Geotbemal ene€/ pmjecr Pdosold - Sold Do{er pioi@.

s931r33

t35t,304

l4t,l93

Tle Gmup reviews de ca..ying moub ofdefftd d at coh Eponing drre sd Edu€s 'ss prob.bL tuft eble prc6t rill b. availtbl. them ro rhe *nt lhal n h no long.r lhat sudjcient p{n io !.11o* !U or ofde deferr€d d 6sd ro be urilidd. Ihe Crcup beli4.s thol it rill geneac sufa,cior fitu Mble piofit b alloq dl oflh. d.fdod ta\ 6sls ro b. utilizd As of D$ember I l, 2016 ud 2015, rhe Gbut did nol Fogniz defmd ta 6seb on cedin NOLCO dd MCrT 6 .h. GbDp b.li.ve lh.t ii noy not b. pobable thd sutrcidr bnu. inoone will be alailable i0 rhe lEd forcssbb ftbE asritui vhich lhe b bcr.rits cm be

6 Cabr.dCab EquiELrb 1016

Cahmhnd C6h in banl6 Clsh equivd.nts

l4,l?6

Sa,?45

4,521/5r 3;35;192

t4,7t0l2l

sl2,9t{533

$t:.516,605

7,82Lq03

*s. dt'

C.sh equi!.l.nb to nrde rd int.rcst o he prevailing banl deposit vrrying p.riods of up ro thEe months depdding od lhe inm.dia& sh requiEmmb of the Gbnp, dd em inLrcst alth. pEvailing snon'bm dep6i1

Cah in bdks

ruMr$ilttililr[|

-l0The Grcup one

Inl*{ $0.11

h6 no shdt-lem inveinmb virh periolis of md. thd dre noorhs bur lss tho 2016 &d DeMber I t, 20t 5.

6 ofDecember 3l,

inmDe e@ed on cash in

nilliondd $0.0?nillion

Flutrcirl

Ald

bdk dd shon,teo

in 2016, 2015

invesrnenb mounr.d b $0.15 mittion_

dd20t4, respedirely.

c. F ir vrt0.Thmugh Pmiir

orhs )016

.:015

15.4&7

12,ll3 fl56,211

$162,14s

N.l Srin on fai value chsgEs on finmcid 6sets 01 FVPL included in rh. dsolidared tudenlj orconpFhmiv. inone do0ncd rd $16,404, $1,192 r,l $26,123 in2016,2015 md 2014. idpcclively. D idmd inmme reiv.d ion cquity suriti.s dobred b $2,131, $1,704 md $2,059 ir 2016, 2015 ud 2014, Bprdively (Nore 25)

reed in,Trifi (FiT) revds fron Ele.l.iciq sales ro PHINMA

El*ticit

lesallowm(e

T6sco 1515,113

$ 1,726,10t

sales ro WESM

for

inprimdt

l6s

ft n.idy du€ t@ FiT srl6 lo Ndioral TrosDission CorpoEriot (Ttmco), sale of e,ectricily io PHINMA EMgr' Cdpoiarion dd cl)l1Miun opelfu lhese d. due rirhin one yed. Ille ca.fi'g valu6 6 ofDecemb€r 31,2016 ud 2015 apprcxiroL ihei The Group\ ftceivables

'n. Eeivable fro6 iltli{e FFesb

'dla6 he&ing &d collerible

useousd dd noninlasl on reldd pafry t rErctioD, rcfs lo Nole 26.

rode by the Gmup to Petollind. This is within one ya. For the relm dd cdditioa

abl. b.lor shos3 the dbcldw offtonciliarim of illowd@ fd impaimenr €eivables fro6 q coMrtiM opeBtor: Thc

h$* d 2015

Balre d beginnin8of)* Eflet of f@iFr cudcy tulation

B"i{e

ot erd

ofyetu

(3,0s0)

12.931)

$5395

|Lil|ntmm[|r

.lt

Pnprid Elpenr6

rld Olh.r Cum.r A$ec s2,472;21 653,513

pftins ro rhe mour oftund r!!t lh. crolp is requiEd ro conply with Patndt Accou! (DSPA) dd Debr Seeice Rserve Accoul (DSM) oIMCI tud Perdsola, Esp4rirely. The 6bio&d c6h is $d to pay loi rhe fonhconins debt swice soheduled ir Apdl md Oclober ofde.y ye$ uril rhe lom is tully paid oft lhis ale includ.s uused ponion ofthe St@t Righls prcc..&, {hich qs h.ld undd *mw a@urt. ResricLd csh minly the Debr

Sfli€

b snraenrr Den ir to advdces nade to ldious conbacroB for tn€ conshdion of such d rhe MGPP ud sold Pwer Poj@l (No1o l0). The dowdpilmdb vill be applied agaiNl fu@ billin$ h rhe come ofmstuction. Tne cuftnt ponions e esli@&d lo he applied lBrirst progrN billirgs wilhin d. fr@ rcFoniig dar€ dd m clEsified unds ''Pielaid expejs dd otber clllrmt 6sd '. Ihere Nft rc doNnpaymot lo otulrn)s that N '@ rlated p!ti6 a ofDedb€r 3 t, 2016 dd 2015, aD€dively. Advmces

pow pldb

.xpM includc prep d itulfue sd pEpiid ftd. lrcp.id 1ax.s pei$ d.dibble rirhholdins h6 ad prior yedk bmm€ h PF .id

Olhs pdr.in

!o suppli6, crude oil

crnit.

invsto.y sd udram defed€n fi'rcing c6b.

lmililItImrilfil

T E

:'E -?i:

Hi F:

! €

I I rE;= :€l

p.i:

E E

ii i

a e

g e n t!:Ei; ;aE;!n:!:

r;!E3':=;

I 5i_; s E

; E

!3! E

€

r -

€:

E E

{

d _q

€ a

Ft'

{6E ri q

i:iP c ;i

IF 9 -1

EE=€

,t:

qt;1

,:E 1 I

3-i

€

-34Pows Plart includes MGh gsrhend powr pldl which were completed in 2013 PtuSolar\ phtuvdlbic plant Bhich vd @Dplebd in Feb'nary 2016. Tne CoGtuction

h posEs pslaiN

ro th.

in Alo .stimate md bsfes tum oonsideEd 6 non6h investing &rivilies.

chdg!

Depletion oi *ells,

coMlidaed

fncilnies is of contreh.nsiw tncome.

elsticiq

exps.

chdeed to

pDti

ol otl produolion under @s of sales in rhe

los follows:

sar6 (Noc 2r)

95,231,3,9 2.795353

Cdral dd adminishlive spmses

dd'Fn .xplodior ssts sd d{elop'ent ccr N

pldloBs md odfl

$Endr

Depldion dd depftciadon

C6l

coNhoiion ofMdbzfra Phae

(Nore 24)

$2.?35,992

223,773

$r,25op?s

Iqc&!-A!9I!is!! baftls oi oil (MMBO), wirh dait oil prodrdion mgine 6on bmk oloil per dry (BOPD) 6om lou dil nelds (Ehe, Avoun4 lbouri $d Norrh Tcnibrla). T*o (2) AvoMa sells wd vor*ed over in Toial crude ptoduction in 2015 reached 5.15 frillion I l.?40 - 22.910

2016,

stabilizins overiu pmdudion

'nc Ooup r@gnizd inpaiment los on rh. liseis loc.&d i0 Olbon, Anim {hich m used in oil pmdErion. nE Ghup beli.ve lhat the low crude oil prices in rhe ddke! is u indicolor lhll th. Esct mighl b. impsir.d ud tnus p.onpcd lhe coup ro p.rfom impaine't rsring ofrh. ln ssBsing whethq

iDpdmdl

is requircd, lhe

srryrng value ofrhe asel or CCU is compaFd

moun. i! th. hiSlet ollllc ssol tCGUt feir ulue {irh ils eovdabL dout. Tr'e 'wvsdle .hr n!tur. olthc GBup's riivities, infomition ot th. les o6t !o sell ud rBlue in use Givd wilh poLntial pwh6e6 or fdr value of m aset is usully diilicult 10 oblain unls 'egotialim sinild tdsactions e laking plac. CoGequenrly, Nls indicoted olheeise, lhe 'wwmble mounl used in Bsssing n\€ inpaimd. lo$ is raho in nse. TIE Crcup [meGlly etinrLs in use 6ins ! dh6!nLd 6h llow nodel. 'alne The

tutF 6h l ows *eE

discoDncd

L $.ir

pFsent mlues

sing

pFh disunl

6L of

Group re@e.izd m nnpiidenl lo$ mourtirg lo $3.33 nillion. fie cdrying dounl of Gdbd ssel beforc lh. inprimenl G $15.35 niuion. AsofD.6btSl,20l6,liecarrying dount ofc$.n ssol ator t!. impaitu t dodts io $6.52 nillion.

IlE

fl|[rurumru[|

-15updde on Devclment

Etu Erp6io,

Prukd |EEP) ir 20t0,

lim b inc6e codc oil pr.ductid r. -25,000 - 30,000 od mdiniz the life ofrhe Ehc Mrin neld by l) opriDizing lhc ovailable i€owmble oil rsr$ in iie existirg D6d@ion nekb by installing No (2) otEhore pndErio pladms sd lh. subsequent &illing non dBe platfoms, bd 2) splorin3 for n.w p.toleuh plcped shich @ add lo crud. Dbductidn The EEP, ahich @nDenc€!

BOPD

Alid lhc Cabd Bbvelmenr appowd lhe plaifom cmhcrion for rhe EbDe md 50!tn*r Eba4{ori[ Tchibala (SE€NT) exp.Nim prcgM or Decmbd 27. 2012. de pldfom iopsidd ficihies design md hbric€iim rft undcibf,en in 201l, *hile the rusDon md instala.ion of po.ls w@ done in 201.1. After m l3,nonlh conshcrion peidd, rhe Erme ed SEENI tladoms dived in C$on o'1 *6 insr.lled in Sepbmb€r 2014, jl liDe Id lhc dritting ofrhe (3) the pmduction wells rd uother de (3) SEENT relh.

Atd

dlilling oD.rdioN d th. SEENT Plitfom. rhe Co6relldion Il rig noved 10 lh. Avounr Plrtfom in erly lmuary 2016 ro oordud wor*o!.r opmrim on so (2) Avoma wells *ith dcfetive submsible pmps. As a shGsic Dde to cop. *irh falling oit priB, th. snsdium decided ro @rolude lhc drilling togm at thft poinr The Coniellation II rig w6 demobilizcd

nek, i.ord.d gs and aata snknb in sone ofrhe welk. h.chdicd faihres dd tdsiei poduction doMliDes, de drlly produolid Mg.d fton I 1,740 22,910 BOPD 6npm'l b 2015'r m& of 13,730 - 22.140 BOPD. Nonerhel6s, the con$nim mMspd Mlve (12) linings for rhe y@ 2016, eulling in o net @d. dton of 602 MMBO. Crudeail mketpdcefordey6z0l6 dgen 6dn $27.30 t56.30psbzftl. Despne n\e natural deplerion oflfie

,lrow E!.lreli.

Wo*n'e roinbin sble rydall prcdu.lior of ibo Etom. field, woi*ov.r opadi.ns sse c@deted on No (2) Avounr velb (T IBSM-2H fld EAVOM 2H) to repb€ n\en defedive subrGiblo pumF. ft6e workovm ained to brirg b.c* --4,200 BOPD lo rhe ovehll pbdn.tion of.he neld. To

The wo*ovd op.ntions tn. ! IBSM-2H well. *hich shed o Novenbs 19, 2016, wm concluded on Decenbs 06, 2016 sio' @Dple&d DomiroloFty!. ESPS. Ilr. w.lt a6 hdded over lo Prcdrclid, dd inili.lly prod@d -1.500 bbls on Denbs 0?, 2016. Tne Hydraulic WorkMr Unit o:IWID skidded b EAVOM-2H m Deoenber 07, 2016, dd its wor*ov.r onpleed .n Dffib€r 2q 2016. The well v6 put on,line on D{.'r'bd 2l, 2016 !t a sbble ote

Ea^ioD and kftstued Field DNloptu PLm reddy tss.d a !s Hydodbm br rhich intuduB neq fircal hs fd aI upsftm openro$ *hich irclud. incMed golehm.nr she ud oyaldei doruen cost recovcry, dd lhc inp.snid of 35% income d on proft oil. ln the lttr1 ofrhese .hdgEs, rhe Field Llle Gabon

h6 h.er @rductirg a cmprdhdsiv. @nonic modeling dd lahation of rhe Mdin Esenes, *hich will be subjd to tne Dryi5io6 otde nfl Glbon* Prcduction sheins cont&. (Psc) srth. Elame consortiM

Ehe

ne* 6scrl EgiDe will bke efred one L\e td ofthe sploihior IioeM (Ebe) *pirs in (Aloma vill .xpire ir 2025, NbjL Eboui will .xpire in 2026). Afta llly 2021, lhe consoniM *ill appt td a new PSC Dersins lne dre (l) 6elds, whion rill alrady be b6ed on The

July 2021

liltruflll[!ill

16,

clmnr 6onomi. nod.ls d. beed on drilling oflnEe (3) wclls in lhe Etdne liense bdoE July202t, *idr tunier drilling toges ftdn 2021-2024. The cmsortiM h clllMdy ehining tno nost optinal drilliq prqlm to ensure ndinum rmvnble oil rhile eGurirg positive The

rtu

for

dr coFonim ncnb.^.

Sh'Io|| Wdt E plordio, Prcjtt 6WEP) In m etron to ndimi& lhe remaining i€verable oil resffs {ithb rle €tanc Mtuin con@sion, tie Ehe constrim *icked ofi.a Shauow Wd.r lxpldarion Progm in 201 I lo idenrii ptuleun prcteots for fu.!E ddllins in the shallowd p,rri oflic bl(*.

*s able ro Bap cmitt d lo drill

UsiDg lhe a!.ilabl. 3D seismic dab eguiEd iD 1997 od 201 I, the Consodiw our drillahle prGpets ir tn.* shallow dd by 2013, dre @@nium

yib

es,

prcsFcb, mely o!ok! md Dinb{ Ite ovoli pMpd v6 drillcd in Augsl 2013, Nhile Dinba wa d.iuen in FebnEry 2014. Boih s.lh h&l oil 3ho*s. bur *eE h4o shalloq

One challenae th.t ha ane np in rhe Grbon con€$ion is lh. .nsglnce ofIDS s6 iD 6!re prcducod oil offoli (4) welL. In July 2012, so (2) {ells h lhe Eboui net msifcs.a }l2S in rheir prDduction, whil€ No (2) velh in Etan field yield.d Ii2S in 2014. Sine $e Eboun field

rftsvred oil, rhe tudy ofd€ sw*te qg po6s rhich ains !o ad.4t$ lhe s66 nm tbese $u veus, wa tued in 2012. Ho*ever, due to lhe rodt deline in oil pices, rhe prcjd re put on hold. stiu

onLtiN subsLn.irl

Bree,fu|d Prcjds Urynde

In 2013, r Water Knock-Oui Slsh 16 itrrrlled in de Avoumr Pl.fom io oDtinia th. cdde going lo the Flooling PiodDcrid Sldagr dd Omoadins (FPSO) wsel.

etud

AsMl

FPSO ln@g/ity td inther

ndiniz de lorg-lm @biliry offt. disting FPSO,.he Petmlea Nae\N, d Topside Inle8rity Ase$mdr w6 joindy cnied oui in 2013 by Allied Maine Sflices sd BASS to identi6, atuile aclions to roinhir th. ves.l\ shcMl intgrity dd ense mrtiruoE otmlion thrcughout the life ofdE field. The DNv clN ReDeml 2012 for lhe Nanripr v6se1@ approved in tull &ms innid-Ocbbd20t3, rh the dificalion ulid dil h ode.

Iulp!!lsalrl3d!!! O!.ntor RMA (HK) Ld. applied ailh rh. DOE for a tufs of op€ftship 0IK) Ltd. ro il5 nryly Imed Singop.re-bascd suhidiory RMA W€l Linapom fte. L!d. (RMA Wst, whjch EqBr the DOE appmd oD Mry 24, 2013. By the 6xr hdf of20l3, RMA @Dtinued il5 Erjes ro* for €s.nes c.itifiulim md reswon sirnulotion, rldgside furnd drppinA 6frhe Wst Limplo field for additiomi leads sd pr6ped. In parallol, well td.ciory md dnni4 objdive pltuing *ft ilso cdducred to*d& aly poducrid md tull field developmol ir Wcst LiMpsm. oI' Jouary l,

2013,

of SC l4C2 ftom RMA

RMA w6r sm1th. final h&pdddr lxp€n Repon oflhe w6r Linip (Ga6ey Cline & Asmid6) on Seprobq 5, 2013. Tle WLA liel,l hs PBvcd (lP) oil reserd of 9.6 MMBO dd a Proved + ProbabL l2D Hwes crimare of 16.5 MMBO. This is b6ed on NGmu ul,rdaltrellderclopmmr prcerm !.b.dulrd D 2014-15

rnL[|ilmiln

pd6 the nd E ort olcafaney, Cline od Aseoi!&s Mes of the Wen Linapam A stutue. A@rding ro rhe

In M&ch 2014, RMA shded wirh (GCA) od the cadifrotion of the

rcp.4 the Wen Linapace A srutN hs Prov.d (1P) resedcs ol I L6 Million bmls, wilh Prcven + Prcbable (2P) regnes of I3.2 Miuion b€ftk, md Pmven + Prohable + PGsible (3P) ffides of 22.3 Million bmh. lunns, GcA indicar.d rhat all !hr. cas esflrd from a thEe Nell dwelopnert whieh w6 agFed upon by ine Consonium duling de Tshnisl od Opm.iig CoDnid.e Medings OCI''OCM) held ar RMA offces in Melbome, Aushlia m

am.

5, 2015, lhc DOE gmEd incunbdr opdroi Ri,'-A W*r addnidnrl on.nodh 5! 2015 ro show p@f ol6@cial oap$iliry, whicn RMA W$r fiilei to This pbnpred 6e DOE ro l€mimre the lam-in AsEmenr (FlA) bdeen Pi&in

lebrury

*reGion

prdide

util Mmn

theFilipinopdtreBonM{ch12,2015. nis olso.fielively lemirotes tte Pitldn'RMA FIA, also stippin! RMA wesl of il5 inlolvdenl in thc bl@k. Fron April to M.y 2015, th. rmairing Consonium n.6b6 sougl DOEt fmal app'oval of pdiciparing iftEG in SC I4C2 follolin! rhe exit of Pilkin dd RMA Wei. \r'triL su.h appioval va soud! n aly lppoinLd Openlor Philodrill pres.nLd its propd.d 2015 work Pogrm sd Budgd for the block - corsisring ofr*hnial sd mlmercial audir of RMA Wen\ conplebd *dlc thbu8iolt ib ODdbhip, binling US$59,950 ova liv! (5) nortns. Following Philo'lrill s r+ssmptioD ofopeEto6hip orlhe w6r LiDaplcd bloc! the) tude pedt with Philodiiu in lh. fom'l Eqnedro fomeropsarorXMA W6ronJue 1,2015 b h{d-ova of ill lechni$I, leed md f'Mcial delmd* in RMA Wcslt posssio! during ib tne EveBion of

witi oil p'i6 mnlinuing to dmp rhFughoui the end of20l5, rhe Cdsofrim *d in g6dd aglMer 10 postpde dy fidrd dewlotmdt in the block. Hov.v.r, th. eMniu aeFed conlinu !o keep thc SC elile by suboilting a Wort PDgrm for 2016. De.nb.i

Philo&ill slbnlr.d b lhe W Pme6 lhei p'opo*! 2016 Wod( (WP&B) Pros@ & Budsd for SC 1.1C2, which consisb of.he @ndDc. of m ROV (remotely oD.FFn vehicle) doanlole swe! ofrhe old Wel linlpsu rells in prepdriior tbr rbrrdonmflrpc€duEs Tle @hnicrl md conDmial audn of $e blek will cmliN. in 2016, ildglide €nlinuing etrda b the G&G dib gd.6t d by pr.viols opralor I(MA wen Linapom I1E iobl budg.l for rhe rbov.Denrion€d acrivitiB is US$23,390. ltuEndg/ she On

13, 2015,

Philodtill soughl lppoml 6om rhe Jv Pder fo. the mduc. ofa dow$ole W6r Linapacm wlls usins d ROV (molely opmLd v.hiclc), iD p,!pr{io foi ddlu.l field abddomai ltc W patheF irsterd oped to Eslasit rhis wo.k a contirgdt ofllF o!-goirg ldl'niorl md smmsci'] audn of RMA dd olhd cdt&o.l In eely

sNey

201 6,

of tne old

lB hm condrcrina ib G&G nudi6 on $. bl@k to tunhs Wd Linapao bl@* 10 b€ div.d fo! pFdudion. To{rdr the end of20l6, lh. cmoriiM discu$.d Philodillt propGei wP&B for 201? b be subnitld 1o .he LIOE. Note llul in 20,4, pdiou op€rdor RMA dsiged enhadd Dounudder c€solulions (DuC) to TnroDgionl 2016, Philodrill

rMgihed

die

replMs r lD s.isnic d!l!3.1over lho w$l l,inap3g bloct a pd of then fm-in adks, bur a$ nol able to setne the brlm6. Afta xMA s sDbs.qD.nl . tom the bloot itr '€Min'ry 2015 DUG *eDr bold of rhe ffised 3D d.tM.

|r|!il]ilLmml

,33, pd ofthe 2017 sc l4c2 wP&B wirh I tolrl budget of $472,924, lhc remaining consortium nenb6 auocaLd i lim budget of $l?4,659 to pay RMAt oMding balm@ of rhis 'cquning dabd from DUG. A Conrirgdt pogm of$293r65 ior pNibl. Qbtildive Inrdpi*rid As

(Ql) works 6ing DUG 3D dal'la is aimed ro udat€/nodiry lhe dwelopmenr plus '.or lo fomrlate enlirely nea plds ld lh. blo.k.

ryt

well dsisn

PIRC ard lh. othd le6 apprcved die said W?&B od DeMbs 20. 2016. Philod.ill has subniftd rhG wP&A lo de DOE on Deoembd 2l, 2016 .nd trs aptov.d on teu.ry 25, 2017.

Aftr

th. &mindion of the FIA with Pi*jn. PERct pdiciparing

idssr

sc l4c2

is back to

Gdkml Eftra Gtuth.tul Ru.*atle Ene.g Senn. Contrct (GRESC) No. 20lA-02-012 PeboEDerS/ signed tfie Seri€ CoDtlot for lhe N{aibm Geolhem.l Powd Projc.t on tebruar l, 2010. Afts vhicb, IERC mnduded pEiev€lopnent adivnis in 2010 uril Also, PERC fmed a Joinl ventore Cou!, MGI, with TrdsAsia sd PNOC'RC.

201

laller pan of 201 l, th. DoI conlimed rhe com.rciality oflhc 20-Mw Maibffi Gdnmal power Prcjecr, *hich allowed MCI ro p@ed ro rhe prcjert dewlopment shge, iNolvi4 l) rhe &illins ofso (2) *els ro 6npl& rh. sE prbdDdion od reinj.clion w.ll copejdes, dd 2) the @nslruolid oflhc si.mteld dd poser plol teiftiE,

Lrurit th.

'Ih. mnpletion of lhc sLm rcqui€mdt lor lhe 20 MW Mdbrra C@themal Powd Plor (MGPP) wd su*stuUy rchiewn vhen MGI (billei ia fBt pbd@rid Bell, MB-l2D, in JulyloAugusl2012!o!tobldeplhofover2,000m.Simildly,thediillingofnwcondeGft iqedion well MB l4RD to a deprh of 1,900 n in Ocrobs,2012 rh Fsulting gdd p.m.$iliry sidsfied tli€ *€ll requiFnenr for cddeMc flDid Einj€rim. Along qilh the 201 I vok-oler or welk M0i-6D, Mai9D dd Mai- I I D, MGI had dE ,*$ary w€lk for the 20 MW facilit. MGPP\ I l5*V Trdsnhsion Liro sys&n wd suc$tully oarneoled io tn€ di$ing MEMtaO lineon sepbmbs 10,2013. upd conpldion df rhe Eliability dd perfolme Brin& lh. MCPP wenl d comcrcial op@lids d Fcbnuty 3, 2014 MGI drillcd so n N w.lls in 2014 10 conlim lhc *psion ofthe Maibm EsoNe. Well MB- l5RD v6 succe$tully complcled on Oetobtr 6, 2014, rhile wll MB-l6D ra drilled dd complded on Novmbs 16, 2014. Due rd lrt good now Gd Esuls, MB'l5RD w6 lai.r decided b b€ the pbduction well forin exQansio4 md MBI6D 6 the roinj.otion *eU. Witn the

sble perfolrrne

of the

Heroi,

MGI d€ided ro psue & expansid of thc

Mdbarda Projrcl (M2). IlEe is ot le61 5 MW qe$ ste@ snpply lion the 20 MW *elb, dd sirh the J MW capacity ofMBlsRD. d expssion ro t 2 MW wa d.cid.d dd Aprovcd tn 2015. The separations for rhe dpmion bl( ofi in 2015 {irh inirill disusions wiih potatial suptlid sd contBolor. Discsiors sid pototal oitules rm llb conduccd during ih.

fisl sohelule! Paentiv€ Mainreme ShurdoM iPMS) tm Mmh 07 23. 2016 the fiEr rojd PM! sin€ the pldfs onddiil op.rdions in l.tnrary 201a, Major emponedrs on the Sl€dlicld md Po{er Platrt qeF Eirbisned. TlE MGI rem onpld.d all shltdoM o.tivit* 6 prog@me!, Tl'e p.ws plst *a slrchr@iad 1o rh. Srid d Matoh 29, Tbe MGPP hod iE

ILililrnnmilill

t9, ud resDn.d rlead ofrhe orisird soheduL. 2016 ar 5:16 AM

nmrl

tu11lod 20Mw grss oulpul by ?r15 AM. ab.Ll 12 hou6

MGI drilled rhe .ew Maib.m-2 GO) reinj*rion sell, MB I 7RD, lo a io6l dc,t]l of 1,900 nec* d tuly 08, 2016 nsirg DESCO Rig 30. Dnuing md c@pldion rsr 6!h5 indjcot d rhlt rhe well EquiB a plnp in ods ro be $ilized for brinc injetim. coftndr. MBI?RD is being injded wid, posq tlant condeMrs i. atmpt ta enheG itr ..pacity, sinilor to what vd dme d MB- l4RD duin! ils edly otmlioN. On rhe Stufidd sd Resedoir sil|e, aell MB.l5D - inrended 6 proiucrion v.ll for lhc l2-MW Maibatua-2 cxpdsion p@j*r is o' @tinuous dishorg.lelin8 sin€ o.lober20,2015. Itie well will be shli in nid-Jm!!ry 2017 rhm it is exp€ftd dBr Maiba@-2 costrutio &tivitje in lh. Pad ll go into tull drivc. FIow m.a!rcmdts indiete rhat rhe well h6 oulpui of 14 0 MW. 6 of Decdbs 29. 2016.

Eirj*tion load for lr!ib@a- l md Maibffi-2 robls ta 74 kS/s rd rle combin d capac y of *elk MBl.lRD Dd MB- l7RD (73 ke/t is dough b &..!. all ofrh. rinjerion load. well MB.l6RD sill be ued a . sbdby rcinjedia well yhen reeded. The cobbineJ

FroD

Juu.ry 0l

Telac

solr

megy *pofre! to tle er.id v6 sold to MCI'9 Oma*a, PHINMA Ene.S/ Coryomtion.

D.cmber

153,06?.70 MWn. This

31, 2016, rhe roral

Power Proi.ct

S,LT E".tg, S.tui.e Contrct ISESC) No 2015 A3 I 15) The Seoice C.nMcr for PC€C Dry6l FnoabL .nsgy prcj.cr, rh. 50 MW Tale Sold Power Poj.ct (TsPr), re sisnei vith the DoE on M4h 19, 201 5. Tn€ elli pDj4l is sinden in dD cental plains ofl-umr mrsistina of nd tdnin wilh hiSh imdi.ton lalues makiq ir highly favouable for phorovolbic (Pv) ele pow.r d.v.lopn.nl. PGIC a*arded rhe Dajor elr equipncrt supply contacl fd lh. TSPP ro GeIlfu fm Consgy d June 19, 2015. Cons&/, rhroush then bcd OnshoE Conhctor, Pliesoo Inc,, o@nite! io 6nDen€ rhe sold fan srstuctim rolivili.s by Au3B1 2015, siln *Fecled ohpl.lion of.he 50-MW $lar fm br Jdury I l, 2016. PGEC adden tne Civil ed Struot@l Workr for rhe Teh sne b Medio Cmstlction $d Ddclopnenl Co4odion on Jhe I9. 2015. lhilcanleh Enlearises (d elerical nm b6ed in Taho City) u{lerlook lho supply, d.livery md iNlallatis of ihe 5.9-kiloft.ter 6qlv tunilsion line linkinS dE Talac sold f@ to rhe NccP 8rid, on Jue 17, 201 t, PGEC sd odiliole Coup EEI Pouft coa. GEIPC), incdp@Ld a joinl vdlure piojed G.oup. Petosola Colpodion (PSC) ro underble the dev€lopmdt ofde TSPP.

Dlu fm lot ovnm, Lrisil! IrdBlrial Port CoDoralion (LIPCO) fo. rhe 55 hek sole d*elopmmt This w6 Nigned to PSC proDeny o, sctldber 15, 2015. As th. LI?co is eirhin rhe Cenral T*hnopdl(. which iJ Dndq rhejurisdidion ofdE Pnilippine E onoDic Zonc PrZA), PSC w6 oble to r.gisler 6 Esnonic Zde Ulilili6 Enb.prise on Jut 28, 2015, ertirling it to tne ingtivs av,ilable ro PEZA loalm, od ohblinB th. r.ivs of l-GU endGddts (rhe Tdl.c Cityt fav@bl. endoMent *as n*enheles sonshr Dd w6 semd on SeDbmbs 3. 2015) ud for the TSPP ro b.n fit iron s dp.dil.d tusude oflhe Envibmedlil Conplim@ Cdificall (ECC). On June 22. 2015, PGEC md

.x.culed

Iae Agrdent

f'n

Ausun 4, 2015, rhe DENR EMB Resion III issued PSC wirh rhe ECC. fl e$mri.l p€mn fd 8rcund uorb ro cmdc. on tle sold pdk sitc. Aho, on Au8lst 27,2015, Lle

ne.ded

mfl!flilt[fl]il![

Nsioml C.neisrion on IndigeDou P6pld Rcgion trI (NCIP) isued rhe CefrifieL ofNonovslap (CNO) lo PSC, sbting thd no r€ral domriN or irdigdous p.oples aisr yithin the The DOE suhseguendy apgoved rhe

Scptenbt22,20l5. It aka

bsisment ofthe

T'jrc

Sole Sflice C.nll&t !o lSC on

Allmdion ofD.claiatid

of Cmerciality for the TSPP on scpldbd 24, 2015, cdcludins $e prqecfs PE,DevelopDent s14! od comnencing virh the p.oJedk Dwelopnml Stagc. Sepbbd dd Novemb.r 2016, PEZA issred *ve6t pe@ils for TSPP annodid4 alloling d*elopDenl iNide LIrcO b go nil-blasr. Gsued the

B.tvs

M.dia Conrdction Dohilizi for tie sil€ cteein3 in 6ly tuly dd by Novenbtr, 6 lbte b cmplete m!.h ofrh. inteml tuds md foundrtjon wo.ks for lho sole fm dd the snrd buildins. Cons$/ s piling F s&ior Cdeon ini.iakn de pilins *orks for tne slu pmel sub.trd& in late sepbmber od @mpLled it by mid-No!.nbs. Phs lft, rhe on$ore corslruclion sntrlor, onhenc€d with dE inslldioD of sold modutes on Ocbbs 13. 2015 dd cdpleied it on lmury I l. 2016.

Phildech commenced lh. ercdion of.he 69-*V T/L pole on Ocrober 3, 201J ud w6 able lo conplek tlr *hole 5.9 kn tunision lim by de i]ltrd w@r ol DMbd 2015. Philcanbh *6 able to complelc th. swilchydd by tll. .hid s*t ofD*.mbs. 'Itis follo*ed 6on NGCPT ipprolal ofrhe sysm tinpad study Dd Faciliy snldy by Psc. .xeuLd m Onnibls lno md Seurity ABEden. (OLSA) rirh lddds Developnst Brnk oftlE Philippin6 (DBP) md Philippinc Notidal B6k (PNB) on Novmber 12, 2015, esidg. Iod moDd of?2 6 billion. The OLSA la EsisGred with rhe Registry ofD*ds on Novenher 13, 20 r 5. ln rh€ memliDe, Perosolo

joii

t'n md rlGmi$im faeniie ,eF 30yo dd 100% coftpl.red, Bpedively, prcmplins rhe DOE b nomimre rhe TSPI b be FnsUsible. nr solar fan va complered by DidJsuaJy 2016 od s6 able to dpon powd b th. gri'i on By nid-De.eDber 20r J. the soltr

On Mmh 07, 2016. u\. DOE issued th€ Ce,ailicare of E dorsent fq Fed in Teifi Eligihility (COE-FIr) oftho TSPP, codfmins lhar $. prcj.cl is qlalili.d !nd.i $. FrI systcm slbj.ct !o onplide wirh the ftquiEnents ofrhe EnsS/ Regul,rory Colmission (ERC), Dd v'lidding lhrl F€ta{ry I q 2016 tu rh. st d of t]l. pbjelr comercial op.6.io..

olr April 06. 2016, ltuSold ex*uied ib Rmeeable Eners/ Parment AEEmenl (REPA) *irh lhc Natoml Trmnisstd Corpmtd (TrNCo) dsudng lhe prcjet's revenues fom tbe FiT palndrofP3.69 wliiom2016ro2036. IneP\EPArmkefledonMayrO.2016.

R4uhlory CommGsion GRC) lppoled or tuly 12, 2016 lhe Ceirficaie ol Cohplidce d a ftsn-in-Tditr elilible p.ws plet (COC-FIT) fd rhe TSPI. *hich qDafin* lhe plsl ta @iv. $e FiT paynmli of P3.69AWI for 20 ysu. The Entr&/

petuSde aDpletn tne l@l Vdiable Rene*€ble Entrg/ (VRE) bst wirh NGCP for lne TSPP lst D{€mber 0l - 02, 2016 ro e6u. rhe @mplifce oflhe on4ite eleclrical etin$ ro PhililDine Crid Code n nd,rds. Rnob VR.E bsb reE conducred wirh NGCP on Dedber 27 - 23. 2015 b sr elTativda of rle planCa BD@e b Ncc}-cdrolled pffield. To rddree drL poleily isus .nouni.rod duing the FmoE VRE 1615, NCCP will Hne fDal drb inbgrarion duing ine 2d *ek of lmusry, 2017. Ans passing dese Es, NGCP {ill issu. Prlrosol& qilh lh. Final Amrcral io Com€t c.dilielion.

til!mtMIru[l

t.lrosoLr .xeuGd ib Co Lqrion AgEment sith NCCP on D.c.mb€r 27. 2016. This l3rDeot allos Perrosolar b s NGCP\ 4Gn Ridtif way (Row) ovq rre 230-kv Concepcion-Sd Mouel Iire lor dE omslruclid md utlialim of Pedsolart 69-kV Switchirg Sblton, Fm.cting the TSPP io rhe NGCP grid. 10 b Decsbs I l, 2016, de iotd endg dpon d to .he of P553.7 MM br.ed on rhe FiT pne ofF3.69 / *wn,

Fom Fcbn.ry

*j$ rsoN.

gid h

67.393 MWh,

lizd speinc bom*inA c6b Elarins ro finmce chuEes incMdl in the mNtucrion of tne pqs plMr. CQitoliad sp.ciic b(mying €sr doDnred ro $0.71 nillion dd $0.02 nillidn in 2016 rd 2015, resp..rively, Tbo ra& Eed to ddmin. dr. nour ofspr.ific borowing @sts .lieibl. for clp aliation we 6 39%, which is dle efadile ln 201 6 md 2015, lhc Grcup copit

c.llderal b s4fre Bowkas In 201 l, MGI &qfied prEek of lad ntrn Scioce P&k ofrfie Philippines, ltro. o,1 Phillom Pmp.ni*. lnc. mouling io $0.6 nillion ed $0.2 millio4 rcspetively, to b. used a pNd pl&r sne in rhe Maibrc Pmjed AH in sto. ToD6, Ba&n96. h @rnelid wilj] th. lMs, MGI h6 pledged a ponion olib lmd add pioFeny, plbr dd .4uipnent modins ro $4.5

nillion 6 collarsal.

Reai

sllL

Pledged

(land to bo used

sserl

pow.r plant sie,

Ch.nel(undd Aopsly, pldr md PSC also pl.dged aU df ib dd t5?.5.4 million (*2,71

e s follows:

uda

?rop.rry. pldl Dd equipnedf)

eqdpnflf) $l.5iiuion.

plopeq md e4uipmmr mouring bnlon)

mllal.ral in

@melid

to $56.14

millior (F2.30 billion)

lhillloDin2016md2015,

Det ntd Oil EtploEdor CorB

Brlm€ .l

b€ginDirg

ofyd

$t9,tl2,5?t

r,89,64r (32,930)

Tlmfes b

BJmrr

Nells

end

5d plaifms

ot'€r

(l.rote

l0)

(6992266' 5 |

(3,309,403)

0,ll,l,ll,l

Unds rhe scs enreEd inlo wit! lhc DOE overirg cerr.in p€roleun conlrel in !sio6 localioN in rhe Philippines, rtE pdicipding oil compmies (collecrively knoln E ConftctoB) @ oblieod to provi&, .1lll.ir sole nd! .he sedic*, bhnolo8/ dd fddcing n@sary ir the p€rrommce ofden oblisalions under dre rcft!.8, Thc CoDtBctou @ ako obliged ro spend sDeified doub indidred in the anhcr in diEcr prcponion ro then wdk obligdrioc. Howevtr, ifthe Con?cion f.jl lo cmply vilh lhet wrk oblE rions, th.y shdl pny lo the gov.md. .he dount rhey should have sFnr but did nor in dired proDdtion b rhet wdk obli8atiom. Ti. p.nicip.ting comp$ies hav. Opadng Ag@mdi! Mong 0lloselves whicn goled rheir dshb ad oblisdions uds dEse conhcb.

nilmrurufll

Addnions petuin to

&v.lopn.nl €sb incuftd

for Erane exFnsion.

illl remv.ry of1h6e defdied c6b is dependent upon lte dis.ov.ry of oil in onimial qudtnies ion ay ofrhe p.lrolem conssions dd the su@s of tubE d*elopDenl the@t Tlle

SC 6-A - O.1or-Mald]tu Rlnck

tlly

201

l. Pi*in Ptu1@ Plo entered ! fm-in agrdd. io acquiE ?oto ,€nicipaling IDihemoE. Pirkin s6 6sig!.d 6 n!. nea Opsalor of SC 6A in

interest in SC 6,{ block.

lim-in obligalid, Piikin, &quiFd, presed ud inbled 503 s{. km. of 3D s.ismic dab fo Ph6e l. Tne sisic equisition 16 onpletld id Novehbs 2011. After shich, Pirtin bee@ proNinB dd int ipdins the sisic drb in 2014. As ib

on Au8us 27, 2014, Pirkin se't a lerler to irlom lhc Filitino Jv D6c6 of ir iddi ro *iihdlN fiw m. oosonim anr @mplding Phee I (i.e inrs?frrion of 1D seioic dala) al lhe cnd of D*mbs 2014 widour paynent oatcnrty. li&in will on .ver nU dah, rep.ft ad mb^is gen.nled duidg Phe 1 od will subnir b DoE ,ll t€mrds relabd ro Pise I work prcgrM fd mdHorery The paftE6 opprcv.d Pi&in\ withd6wrl upon fulfilmsr of all L\e lbm

Dri4

de SC 6A Technic.l sd Otenling Cmitte. M.€tings (TCM/OCM 24, 2014, the lppbved the pmposed 2015 Wo* Progm ed Bndget (WP&B), mDposen mainly ofcmlqical md G.ophysicil dDdie, will a bbl budser mount of $173,170. Fomer SC 6A 6pedr The Philodrill CorpodioD ws de unsinoudy el@Ld to asme the opeEbxnip fM Pittin.

!tu6

Novdbr

prst

dllt

d lh. of 6.it o4oin8 Geologic.l & Cophysical (G&G) srluario. orrle.qrhm ponion ofsC6A 6l@k. Touds dE Diddlo ofthe 2015, Phibdnll pnposed th. @nduct ofBrsdbdd P@$ing for rhe 2013 lD seGmic dat . ro be follo*ed by a QlKridiw lnrerprcbrion (QI) vortoo\ in ods to enhm€ th. prcspetiviir or lhe idenlili.d prcsp€cb. Tl€ Pdss usimously rppwed th* dirnis 6 pan of tne 2016 Wo* hoglu & Budgd. Il'e DOE rppEEd lhc 2016 SC6A Work Prcgm md BD4.t (wP&B) mounting ro $759,990.50

The Philodrill Corpo6lior

'nrcu8lout 2016, Philodrill cdductd Geolosicrl ud Gdphysical (G&G) *o*s for ihe Ocron

bl@*,6panofdeDo!-approvrdWoikPrcgimfor2016. n.seinchdc l)biedbDd FplocesinE of rh€ 2013 3D seisDic da@! whiofi Philo&ill wived fDn Downunder Cosolutim (DUG) ltui Sepremb€r 05, 2016. 2) on eoing seismic inberturion *o*s on rhe r*ly proc6s.d dai4 sd r) on-goins Qulibriv. hcrpd.lion (QI) vo*r on th. oclon

D*nb.r

02, 2016, llE SC 6A coMniM di$Esed ro rh€ DoE. The 2017 sc 6,{ wP&B h6

Philodtill's popsed W?&B for 2017 to bral bndgd of$454,76?, wftn a Fim ptocM of $416,014 fd th. ond@l of &h pr@$hg ' oflh. 2013 3D s.imic dala md Qdibtive InterpFtction worts over tnot pD.scd dlt se! md 0 cmiineFnl poerm ol t33,753.70 fo. preliainary weu dssi8! studies for prcsp€c(t rhrt cr b€ mtled ro drilhble On be

slbni@d

PIRC dd lhe o6er Pirtd* approved rhe siid W?&B on Dccdbe. 20, 2016. Philodriu h6 subnitlci lhis WP&B lo the DOE on D.cemb.r 21, 2016 sd w6 appovcd on Jmucry 25. 2017.

rLililililtilnl

!eboEie.s/\ Pdiciparing Inl61 in SC 6A block exil of PiUtu Petuleun on MN 14. 2015. sc .7 - oIlth@ Mi,.bo ontt Pu.r In 20t 2, th. sffonim ft4uestd fton

tne DOE

inc@sed

16 65?%

6oD 5.001%, wid dre

m enensior of SubPhae 2. Duri4 thc ye.r, Ihe fmo!. include seisnic

fan{ur efaorrs h,ve bm miod out by rh. o!€6hr. plG3ing dd drilling of one *ell.

In Jdudy 2014, the DO! appoEd a thre+yes *dsion 10 lhe 7-yd Explo6tion Phe of SC 47, b which INOC-EC subhided a Wdt Prq@ for SubPh6e 2, imluding E o€sing md inblprbrion of2D lines and prcsp€ct matmlion ahich nay l€d b dillins ofrhe

ti.

*iln

on Fehruary 25, 20,5, lhc SC a7 consonim oSr..d io rclinqlish th. SC 47 bleL r€pply fo. rhe sme on€ n is ofreEd 4ain by rhe DoE. IhisdaGiow6 h6ed on tne qisling hieh geologisl rist ollhe clllml pospcct md l.ad invdlory, ldk of ftom f'nines, fld sivfl the DOE requiEnenr ofdrilling on€ w€ll for SubPhoe 3

Ho*evs,

cdhd

oprion lo

bbBi

votu w6 senr ro DoE onJuly23,20l5. In a letlqfom J&urry I6, 2016, ih. DOE do lo4s rcco8nized SC 4? a dons rhe sflice conbacb in Nhich PeroEieqy is 3 meDb€r. Tle DoE fomally appoved $.Jv\ dinquidndr of SC 4? on }6rh 10, 2016, *ith rhe ofiicial bination dare reckoned ar rhe end ofrhe ? ys Explonrio Period on Jmuary 10, 2012. As a r€ul! the Perl Contuy ha wifid offrhe defeftd dil *pl@rion c6r Ehred to rhis mourina to $12,930 in 20 r 6. A

L.h

of Wirhdra*al ofrhe Joinr

tne DOE drlcd

5, 2005, SC 5l mdbe6 (Alcom Gold R.surces, TmsAsia Oil, ed PERC) sigrcd a asEenent *ith NdAsim Elss/ Lrd. (lars chflEEd lrme ro Otu Erers/ lnvsbenr Lld, OEL). 30% pdicipaling inlercs in SC 51 lill b. eded by Norkim lpd slcGsful acquisilion of lD seisDic drb md dri inE of2 *DtoBbry wells.

o'r AugNl

fm-in

For Suhphae 2 coDnihdg tne rD *Gmio dab oler Atgm s6 rquired in Jue 2007. 'Irtrcueh ils oM C&C .volulioa Opdator OEIL d.cidrd lo focls d the noihm block (NW tete) md ro ElinquGh all ib inreer in the sontnm hbck (oflshore cebu).

otu E sg/ &ifled so welts but boti vd€ u6uBfut. Fitipi,o f,mo6 (cos6 capit l, Tru' Asia dd PIRC) did noi cFnit 6\e {ells 6 eming vells. Sinildy. DOE did not cEditrhe wlls 6 cmtliel io tn. sc comih.n! but grv. otb 6 nonlhs lo .dduct ,ost-soll mrlrsis. pGctull ofDnBr2 cdDen@d on Febddy 20, 2014, dd th. resulb wde 'nalysis pEsdlcd dldng the OCM on April 23, 2014. OEIL conoluded lhal il is not ssl€ b dnll $)avhee on the Dunat prsped. OEIL also *presd ib inGnrion ro wirhlrae ftom rhe SC 51 sd b Esign frcm Op.mrdsbip. ne folloving &y, a famd l.tei ofvilhdnyll dd Esig tion v6 subriftd 6y OEIL to lhc SC 5 t Jv lFnres (TBlAsia Cos od PetoEne$,) {d io rhe DOE. The

OEL subeitted a leed d@umenl lo ite DOE io app€al dle $bs ofDuhdl. The lqnl docmflr aimeJ b poii our ro DOE rhd rhe opeie h6 drilled th. w.I 10 s@d&dj dd rhat rh. htl pssw eltl.&r blow-oul a.stiiurcd ! forluilou wdt whi.h rendeFd On Junc 10, 2014,

imposibl€ rhe

ful6lnot ofrh€ objarive ofrhe well.

mil|[tmilmil

In 2015, mo$ ofthe acrivities

OFll

!.rr.

5l focued

lh. adridishiw dmsition bbulhr

abour bv

DOE Esgnized drat DulDr-2 {cll Na nonromptimr duo lo ire faitc b r@h tho obj.c.ive jmbbS pde6 (TAo, driuing deplh. bd pERc) md rilh DoE md infomcd rhen ofrhe consoniuD's plm ro continue wilh lie lh rbe proposed wo {prcgidl ( I ) Cdducr pHsu. sludy using ihe dnllinE rsnlrs of Duha! I dd 2 md existing simic DoE dab ro eshblish thai ddllina in the ma is not fe6iblc; sd (2) condud dobil.d giavit swey {ithin Feviously idenrifiei sltlonri.s s! dfrhe Norrh Blek. Th. Ptum atso requsLd for

It.

exte$ion of$e

cos

sc,

Swie Codd

ol) F.bdq 15, 2016, a m&ling rs h.ld mons the SC 5l Jv P{rtnm r,o disccs the cu@nl siturion oflho Sdicc Cdber alier fomq CrpeElor Ono Ends/ of6cidly dpre$od ib inbrtion ro ldve the bl@k. T6Gasia infomed the p€nneN rtrd .he DoE is menabt. io Sirc cl.mce ro ob on€ tne rcnaini.e tortld Aune arl lhe righE md obtigalions undr sc 5l. h lio of drillida a wll rhe p.tu6 rould poposod a rdisd Work lmslm shioh will hctD detmine ifthee @ stil olhd drillabte plospecb 6ide non dc Duhd srrctuft on April I I, 201 6, lhc DOE re4u6kn tne Filipino a@nium Denbds (Tm-Asii, Alam od PIRC) !o fubfth docmenhrf, requiEm€nr io fomlir rh. tusfd ofoutSoiDg OpeBtor Orio Energy sloa/oPalticitolin8In!.rcsb md tben* fron dle blck. Assmin8 Opc6lorTm-Asir fodiuy submiftd lne @nenium s d@undrs td rhe DOE on Mry 18, 20t 6. wilh de DOE opprcving thc subnhsiod m ,De 09, 2016. July b Octob€r 2016, rhe DOE h6 moirain.d cmuielion witn Ob ova wnled TniriDg Fud pryndb duing then Opebcnip ovs dr bl@*, totoling ll24,763.00. ft *e rslved thd the Filipino @nsofriu mdbds bay .xecule a lrnd ofundsbling ro sdle Otlol Fmaining Tbining Flnd balde of !124,?63.00, only who the DOE h6 .xlrru@d its lqal m6rs against Ollot Ef6d 10 p.y such blldce. Upon execurion ofsDeh undetulins, rhe @nsonim m uddLle de Subphde 5 Wor* Pmglm for the remrining two (2) ys of the SeoieContuuntil2019 shich ircludd I P@ Pre$uE rtody Dd I Cmvit swey ovq

Iroa

letroEnergk Pdicip.ting InbHr in SC 5l inmded to 20.05% fion 4.012% uDon OEILT rsignation rd qil fBn sc t I, *irl nea opdaror TmsAsia Perolff coDonrion at 31.35% dd Alcod Pebdlem & Mimmk Colpo'ltion at 46.60%. SC 7t - OlIshD.

Notrttu Palo*e

'Ihe joinl sludy md bid goup @nsistina ofPhil* Perolm coaoalio! PNoc.lc Md PetoEnersy ws notified by rh. DOE lhd lh. grolp son rh. bidding for AEr 4 ofrhe Pnilippine lnrgr Conhcling Roud t (?ECR .4) l,sl Februlry I4, 2013. Th. block is le&d in d*p*ar.

olishore Nonhwei Pd.]m. Af€i fbali2rtion of cdtu relm. rhe @.sonim fomlllv 's siged Sdie Contd 75 on Decenber 19, 2013. Seretary tetilla thcn skrcd d behalf ofDOE

onDedber2?.2013.Undertheresly *su1e{tSdiceConflo!lhcfi61Sul}Dhe ll consisl ofc.ologic.l & Geophysicd (G&G) iudies ofrhe Northlest Pdrwu B6in ud tie condud of a 2,200 line-ktn 2D seisDic sw.y ovd SC 75 for die dmtion of24 nonrtu ar m estinacd €s of ust3.50 nillion.

lollowilg rhe execrtion of Sdi& Contlol (Phil.x PcroLurl PNOC-EC, P.toEner8/)

M Dembs 27, 2013, the SC 75 conrdiM meriry on JmDry 16, 2014 to

held a kick'off

|l]nmiltmiln|fit

_45 -

dsus

my fotrord. operalor Philex PerolcDm sBey oEr SC 7t a pan of Subphe 1. sGmic lhe

pEsented lhe

foeard pbtr

ro oonducl

r 2D

Th. M^r' voteg.r Explor vssel af Subird L.pblatiu co'meiced rhe SC ?5 2D seisic sNey o. Mmh 3l, 2014 and 16 ddys df line ic4uisition, t]le !e$el cdplelcd th. 2,237 line *n sw.y d Alril I7,2014.

Throughout rhe s.cmd balfof 2014, CCG Mbbai commission.d fe th. pree$ing ofth. n$ly'equired 2D $isic {tab. ARKeX Lrd. onplebd the prHsina of ihe supplmenrey sEvity dd iagnelics dab dn Jme 20, 2014, wirh copies oflhe neuly-conpled gNig dd nognclios dala lo tie ensonium by end Junc 2014. Th€ d4isior ofrhe Joint Venft for the ray fo$ard, e ner to rcquire noE seinic dib o' sd ner b driu, riu depdd on the

pdd

rtsnlkofrheirtrpretioroflhelinestob.conducl€dir2015.IDAugust2014,deSC75 coMdm aptoved the applicltion aftne boadbod pncesing ro rhe enriE 2014 2D seismic dara sd b snme fie qurlity of dib. Addnidal cdr lor brcdbmd prcssing mountcd to A..ivilies for

SC 75 in 2015 focu3ci

tio on-going Geologiel & G@phlsioal (G&G) wor*s for

Pd6

ResulE of the twine gnvity swey rcquiren in 1014 vse p.Tsenbd ro rhe Jmuarr 12, 2015; while the inldFdrid ofrhe 2D .ebnic d.6 wft pi6.ded

on May 22, 2015.

on sepbmt r9.2015,rheDOEplrcedSc75,slorg rh adjacflr bl@ks sc 53 od Sc 72, ud* Force Maj.ue du. b t{. geotolilial ldsioN in the west Philippin. Se& By tnis tiDe, the a'sdiD hs alr€'dy ftlfiUed ib Wdt Pnglm fo. Subphde l, cmisting oflhe icauisition, Foce$ing dd inte'prehliod oi 2,200 linckn of 2D s.isnic daa ovd SC 75 D4embs 4. 2015. .he DOE apprd.d lhe Rovis.d SC ?5 Woft Prcgu & Budgcl (wP&B) for 2016, shich @rsisrs ofa -1,000 sq.kn 3D seismic surey *ith a budset of53.50 MM. Due b rhe enfdmen. of Fd€ Maj.ure by the DoE shich slqted ai lhe end of subph6e I on D€cembn 27, 20 t 5, no qDlodion work will 6€ done in rhe block within lne Wen Philippine On

S€ s displkn Tod"E, fie

wrd

lnlil .h. I@.

blel i!.rill

mde

Itu

M.j.e

h Inrd.

MajeuE. punidseiplmiod

Piilq Petoleu

is rhe OFraior of SC ?5 wnh selo pdicipaling md PtuEners/ with l5%.

idivnid d-hold.

idfts!

PNOC-EC Bilh 35%,

DcDber I t, 2016, 2015 dd 2014, the omponding percmllges oflh. Crolpt diciDation in ln€ vdioDs t.tol.!m SC .M e d follow: As of

2015

2,52591

2.525%

Wel Linopacan - SC l4C2 ooton Malajon BlEk Sc 6A

ilFil|[!ruIl!t!il

12.

Inv6h.ntinr JoinlVe

urc

Tle invetumr in r joirt v.nluE ep'Mts PeLocrent Petrowind

rnooDonled in the Philippres

40vo

inl#l

March 6, 2013

PdoCEq prindily ro czr.J on the gseml Susins of gaerarin8; disiributing po{d dcrir.d fron ren wabl. .nrey so!rces. O. July

15, 2013.

EEI}C subsc.ibed b i 20% equi9

she

P.rowind (Noh

1).

r wholly own d subsidiiry of

tuiting

md/d

PtuWind.

disNsd in Nob l. on Novenbs 1l, 20r 3, Petucreen ed clpasia enreEd inro a sn@ Puchde ACrenent (SPA) 6 10 lhe sol. oflctrocrmt 40% .{uity she in P.lrowind. As

as of D*abs 31, 2013, P.lroGM still holdq 30olo eqDily ! sukidbry in lhe 2013 Fnsolid!&d finscial sratemenls. On

she

lehwind dd &6DnGd

14, 2014, ?.trocreen rceiv.d lhe paymml sal. of $e shorcs, od th. D..d the bmfer of shfts 6on PdoGEn to CapAsi4 exsuted uDon

lebnury

Astrme.r, mve.ina

s.lisfadory compl.tion of all lh. cddilions prec.dcnl uda th. SPA. P.1ro6rcen lst ils mntol in ldowind afte. rhe cmsmnatioD ofrhe SPA. A@rdin8ly, Petowind csed 6 a suhsidi'ry ofPdoclM (NoL 2).

ft*iftd,

PtuWind beme a joift vdft htueen PtuGrem, CapAsia md EEPC by vitue p.di6 epvding lhc nsnd ofnmagiq leblwind

of de SA sienod betwcn lhe thEe

Th€ Grcup reco8liad umlized srir on EDesEnenl of iNetuenr mostins ro $17.22 million, s.in on s.le oI iNesfiFnl mourlirg lo $2.67 millim od sh@ in deco'solidaled rebined emings momring to $l.I ? Diuion. Toral gain on disposal of invsbenr momred dhpNalofinv.shdiMountedto $2l.05niuion. IIr. Group\ nel pre.eds a a€sult

ofll

'ne molemerE i,

thc cMyinc valrc

oldE Oourt invstndt

b.gimirg of y.r Additonal irvestnenl duirs ln. ys She in n* iD6me of rjdinr *nru€ ItrJaLion adiumenr Balme ar end ofyw

Balse

Selected

findci.l infomlid

PtuWind 6 of D.cdber

joirt vdtuo ir Perowi.d

2015

$,7,t66,952

$27,6J0,546 630,333 241,431

(,{53,470)

$26.343J96 31. 2016

2015

(r,t85,95r) $27,166,952

fouw' 2015

(20,344,934)

LcuiJ

521)5'.'72

$22,010,100

n]tmuililffi

_17_

SDDary of sbrenor of (@pEhdsile incone ofPetowind for

d. yer sde!

Decemher I

,)015

codud.xrnse.

t,3d31,166,

(6,20<,3?r)

3,362

t!t24,303 Grcup\ shft of lhe nd iname

t2r1,431

ll.Invdtn !lPmD.dd As

ofD.Mbd I l, 2016 dd

2015, rhb

eout

cdsists of lmd dd pa!*jrg lot spaF (loco&d in

T.KitO silh totol erryirg volue of 13l,417. The fan vdue

ofth. inBtn.rt prop.did ofrhe

ODup

mountd

lo $40.273

ofd

31, 2016 md 2015. The GDup did .or obbin $e sdices aDpiais md demined the fiir vilus of tbe Gbupt inv*nnen. prop.nie or lh. bsh of recenl sll€ of ihe sinild propenies jn the 6 de inreshot popdies md ralinA inro econonic irioN peailing d the lime the ulnarioB Dad..

Deemb.r

me c6

As of

D*nb.r

2016

Dd 2015,

ecod

tne

fln

value ofrhe

invesbdr Fopdties

clNin.d lndcr

iBi8nifidr ndunt ofre.l pbpdty llx.s on th. i[.sb.nt pDpcnjes, no orher .xpens @ eme! i' relation b de iDv6h{1 ploDedid in Etuep1 fo.

weE inoun€d! ed .o iname

11.

OrhrrNo..trmtA!!4 2015 $3,233,236

trepaid Ht - noncu@t ponton D€fsred developnmr db

0,633

2,017,331

l,553Jtl 0,403,066

$t0,232,321

itmm:mil||r

-43 -

As of D@mb€! 3 t, 20 t 6, bulk ofrftis ecomr p€tuiB b the &quir.d esment of ngh ofvay by PtuSol& mountins 10 t3.0.6 nillion n.1 olmotiatio, This also i'cludff soft*e used fo. rhe geological nod.ling of MGI ficld. Dei,ils follN;

Brhm6 .1 b.einnlq ofye.r

$3y'73,562

Brl.trc6rr.trdolls. AduduLt B.lmc6

3ll4t37

:64,314

l/1o9.721

rnod2lllotr

.l b.gimiq ofy6r

l23lt5

rdj!!rb.

Ctrpnhriv. rlushliotr

?J76

(167,6,()l O.,r7r)

(r69J1r)

l0l5 BdmH d b€simins

ofld

$7.144

1,40,51L

1,212,671

BalmG

begifring

olys

195,224

Balses il.nd olyd Cunuh e @ndion rdiundr

195224 2,01

$,212,6rJ

$50.6r1

$1,233,236

of rbhl of way dlsed by Pebosold ro cmtu! op.ia1e, pol6, wir, cables, rypratoi dd e$ipmdl od sNh omer dd move for the tusnission lin. (* Note l5).

lfld ighb refss to smr of e'3denl

minbi4

Epli€ shotus

epair,

appmtN dd

Amonidid expd€

'e€ded

chdAed

pol,t

or 16s

follols: 2016

General ald adbinishtve .xFns6 cost of elecrriciry soles (Nole 23)

2015

(Xote 2a) t9,551

Efss ro th. Goup\ oumul,rive inpur VAT c{ryov.rs vhich will b€ ulilizd in priods. fu@ M,jo,ty ofrhe input vAT pet ins lo MGI. MGI is ude4oina a vAT EliDd prcces oedns the yes 201 l, 2012 od 2011 wirh a brrl mounl of 12.25 million or Pl 12.01 nillid. Th€so olaiDs hNe ft* been el*r&d 10 lhe coun ofh A@ah oflb. The inpur VAT

tiltil$||[il[ilI

Prcpdidd

tmwt

ponia

(LLA or the AgEment) *ilh the olr April 23, 2012, MGI .rhred inio r Lmd ree Narional PoNer corpoBrion (ilPc) Md rbe PoNq seoror Asd ud Liabiliris MmSmenr CorDdlion ("SAIM) ovd rhe MGrPt sbfi€ld lot in Slo. Ton6, Bahgas

&rmdl

U.der rhe LLA, MGI will le6e rhe smneu lor for a p€riod of15 ye6. enen&ble for dorher 25 upon muluil igftendt of dhe pdies. PEDiid idlnonc!ftnt poni@ perhiN !o th. sd!&c Enol patbenl paid for thc le6e ag@mert. Tle clmnr podion due in oDe r€d is shoM a pdl of PEpaid xp6es dd orher cuM. asets id tbe ansolida@d ibrdmts of

yff

DeJet?d de]elapmnt

.o!s

Deleftd d.v.lopn.nl w* t.itoin 10 the 6str incurr.d for tho IoMw Phse 2 p$jei oIMGI mountins $ Laa million sd $0 7l million in 2016 md 2015, Espstively. D$dopmot c6r llso includes cons incftd for rhe 50 MW Telac Sold Poqd PBjec. molnrin8 lo $0.46 million s ofDeembq 31, 2015. o]r Fetru!ry 2016, dev.lopnenl esil mountina to $4.44 nillion wse spiblizd ro pDpefry, plani md equipnent upon Pebosold\ sh of@hnddil ot.nlion. Remiding brldce ofdefeftd d.velopndl cosl ofPrlrosolr 6 of D€cember I l, 2016 pedins 10 costs incured for the !h6c 2 expmsion poj@l Dounrins to $0.1 I nillion. Rdlricted c6h p.rlains lo rhe Penl cmpoyk shre i' tne scry nrd fq rhe abddomd! of rhe Gabon ases. Iltis ilsd incl es e$oa !o seDre paymdi dd dischtr3. oflhc Groupt obltalios and lilbililies udd lh. Fldiry Prcdrctior Slong. od Ofl@ding (FPSO) conb&t. The moDr for rhe shft in scmw ofthe Pmnr C@pmy's obUgdion foi th. FPSO dedlcted fro6 the she on lifring prcc€ds dlring lh. fid lining made by Ebe in Nolember 2002 md will be Daid bel io the GrouD d tne sd ofdE anhd *hich is in 2020.

ofDeenbd

31, 20 L6

Dccember

3l, 2015,

rhe

Pelt

shee in tne a6rdornmr of ihe Ehe Main€ $0.21 billid dd $0.23 niuion, rcspetiv.ly.

lemit b

Tllis cdsisb of prcpdd expds.s md ecuity

&tait

l5 AcootrhPr]rblc.'d

Accru.d

the

Compey mntibured ib addnidal 6c@v fud doulinA to

ErD.u6 .:015

Wilhholdine taes md vAT paFble 72],,t51

55.t23

53.6.:7

$t3,795,72t payrble ctui* of p.yable to slpplis dd cont!.to6 rhd daclormen! coNro.tion sd opqalio"s ofoetay proj*b.

A6unt

Acmed intffir Dieble

slaiB

mal

inlsi

e cmtly

involved in lhe

lMi

ililtiltntilIilMltl

Ac.rued *p€nses

m 6 follo6: t223,117 &2,527

33,140

r{!!,12! Dividmds pa'€ble Ftuin b Ncl.imen Olher

pay$16

mirly

pcdain to

cheb a ofDsnbd 3 l, 20 t 6 sd 20l5.

raded secuily serices, utilitie dd

Ille Gmup's rccodb pryabl. ud accned exp€ns m dne wilhin de .ttoxiMlo dFir f,n uhs 6 ofDsmber 3I, 2016 dd 2015. 16.

Sioniem

@tu

oniniu

ya.

dnes.

Cfrying lalues

Intrg-t.rb h!trs P.y.ble

Gioupt lom pryablc pcrtais

The

E4!!l

l@s

avaihn by lhe Gtuut. Belor

the deoils

ofthe

$1,137,420

Clrcnr podioD of lorgrm lMs pay&le Unmodiz.d dcftrEd nMcine con

Unmortizn defeftd ntuins

cod

qp\

shartaemea ldrkm lM! pafabk PetoEnergy entered inb bsecur.d lom oltMenr5 with equiry infNid ro Pctowind. PettuE

(12J54)

sl5j32.@0 $r0r,165,6t3

(105.952) t16.539.074

$r01,:05,990

(1,660,a3$ (2,03a,622) $9tJ05.133 $99.171,163

wios

lendd speifi@lly

ro 6nmce

July 19,20r3, ?tuEners/ enlcrcd inlo o sl,50 million lomagEmst tn vrioB led6 mul inllrsl ralo for tle Fidd (i... six ndlhs frm isue dd) of 3.393%, we.y six nondis b€t.d on a b.toh'ek rrre Pl6 a Fc{g..d spBd. Tte subjeot to epricins knorofde lod r fttslos\6soledonJulJ la.20L5

td itun

rith

2)@

Or NoveDbs 21. 201l, PetoEnssl .ntcftd inlo lddirion l lod uounting b $4.50 million (P200 nillion) Nirh laioB londeG witn inrered nL ai 5.45% pd onD. lnerest 61e ot lh€ in noe shall b. .alcularcd o a 30/360 diy count bsis Md will be paid *ery I nontns j! ye6 ftis bd p.tion. bnor ofrhe lM is tto Tne lhe last &y of eacb thr*nonth i2) setled on Novedb.r 21. 2015.

@6 rd

|flilniltiltr|illnl

OrApril27,2015,P.lroEnerg/enteEdinromOmibusCrnitLin AgrIHtwirhthe D.v.lopnent buk ofthe Philippine rhich prolides ! cEdit aeiliry in lhe principal moud not exc€edins t9.10 nillion (F420 million). o'r May 12, 2015, PetoEner8/ avdled lhe IiFl ddrdoM mouling io $1.10 millim (?60 million) si$ u inlddl rate of5.l5% p{ 'mun subjert to repricing evsr qu,fu payabL. nE lou is pq€ble within one y* which nttu d sd PehEnr8y oteE l into m addirioml lod dounling io $2.50 nillion lom wi$ v4ious len&B wirh m inr*r hE of 1.9647% ter annu subjed to reFici'g ev.iy q!ds. The l(fr is payable in $o (2) y.m qilh natuiry on July 19. 201?. On July 20, 2015,

()'r Ociobs 15. 2015. ddirional $l.91 nillion (t90 nillion) ws &am ftom the DBlt ftdit facilig wirh d inlercsl mL of 5.00% per mnm payable {irhin onc ya rhioh motuE! md pdd

PtuEnss/ edd.n inb addilioMl lM moDnling ro PI 54 nillim vith v{ious lenden qilh tu interest F& of5.25% ps Mun ln@$6te mthe nd shill b. c.lcul&d on a 30/160 day @ut bais hd sill bc paid .vcry 3 honlis in mff in ud the naturity is on rhelsld.yofeehlhr'monrhpsiod. ne bd of 6t lM is 2

oi Nov.nb&

23, 201 5,

(S1.30 Dillion)

'€s

on Octobs r 4, 20 r 6, addirional $3.42 million (iI70 rillion) *a drrw ion ihe DBPt ordil subjer lo Epricitg dery qds parable within f&ility wiih s interst de of 4.50% p€r one ye& with oatuit d orbbd 9, 2017.

P.tocrun

lhd-kn

nd long-M laM Wtble

unsrd cEdir line facilit moutrg 10 $2.64 nillion million)o' D*nbs 19,2014 lith vdiols lmde6 5% unurl inreHr ptyable elery quder. l)Ii Decembd 19, 2015, I LI niuion (?49 million) ofthe robl ficiliry {a emtci, rd ihc remoining b!lo@ *6 Eale6ed in Jdu&y 2015. All of thse l@s wse strled a of PtuGrd ("124

aviiled of ! on -y@

Novenbfl 2015, ledocncd .nld.d irto a 5-yee cEdir line frcilit wilh Chimb$k in rhe soln or $10.62 nillion (1500 Dillion) wirh d Mu.l iiest tdc of 5 2a% subj&t b rcpicing Day le wery May sd Novdhd As olD€omb.r 3l, 2015, $3.50 nillion (F400 millid) oul of rhe br.l feility were grMted o' Nownb€r 2016, PtuGIM .vailod addilional $0.60 millio (Blo DiUion) lM rith the sm. inllr.sl md Fincipal matuiq dae 6 ft. fiFr dardoM. nie principrl is Doyable semiunully shing Novdba 2017 aiiq a 2 yes s@e pe.iod fton the digirol drawdoM. Pri'cip€l due *irhin d. )qt mouting ro $ m milion (F4.3 nillion) w€re duly clNified d cmnt ponion of the long l€m lM. In

MGl s lDnglen la6 pcrgble o]r SeDte6bd26,201t,MGIbgether $ PNOC R6erabl6 Corp.btion od Tm$Asia enbred into a 12.4 billion (d 154 nillion) o'nDibu l,lD tud Secuity Agrmol wirh RcBc dd BPI rpdificdly to psnially fDme the d6igl! d.v.lopDenr, proclllme4 onstruolid, op.ralion 6nd oainrenae 6f ia geth.dtl povor plot pojEt

prereminrbd its l@ md paid lh. endE Emrinina outshnding pri'ciP€i rmsnition of fitue cost d eninglnhmst of lom douting lo F58.40 millid resultins OuttudinA dra*dom pqtoring to this lob f&iliry s ofDe.enber 31, 2016 dd 2015 amounb io $2,01 I (o' Fl00 dbusfld) dd $43.7 million (or F2 06 hiui@), respatively.

2016, the MGI 10

ffiillmlmruill

on tune 2, 2016 md Ocrohs 10. 2016, MC! together r h PNOC Rc md PHINMA Energ/ co@o6tion, dbed inb a Pl.40 billion dd P2.l0 biltion P@jed t4m facil,ty AsEehdt sith RCBC steoifi€lly lo partully fime ine desis4 ddelopndt, pocwndl ud oonsbudior oI ils r 2Mw ssrhemrl poqd pld. expdsion proj.ct md to a'solide fte oftbdiq td lotu undd 201 I omibus AEFem.nr od inoid$bl osa in omelid anh &. coNolidltion, .nd lo fooc lie Norking *pibl Equimenb dd orls 3lneEl cdpo€& purPoses orthe

'fte rcr Ml lM dounring !o P2,10 billid h6 a lm of ren (10) yem fim rhe DE*dorn Da@ of ocloba 10, 2016. hteesl is paFble semi muall, md pnncip.l is Fyabl. in t'enty (20) semi

uNal

palmenb

tuin8 April

12, 2017

is fixed for tne fid tve (5) ves 6on DnvdoM D.1e, bos.d m the sw or the Ytr Fixed Bmchndk RnL .n lhe Pdcirg d.te sd rhe ru3b of L7t% (the "Initial for rh€ €naining five (5!yu of tht Raie on tE Roprioing Do&, lhe b. rhe ftigher of(i) rhe im oflhen pEvailirg 5-Ycd lixed Benohmdk Rrre plus the mdgin of I 75%. o. (n) lhe Initial Ratc.

Inr.€s 6& prwailing 5

hrft$ Lil rill

inrst

hdsl

'ne M2 Expflsion l-ls modring b Pl,40 bilion h6 c ten ot eelve ( 12) ytr includin8 L'rify{ix (36) mdths g@ teriod im Inirial DBwdom Dat ofJune 2, 2016. In&rc$ is payoble semi mully, md p ncipal is D6)6ble in.ighleon (I3) senion@l payDent within Mhe ( 12) yea fron bd lfrer th. lnili.l Dm{dow Dare. is nx.n fd de f6t s.!.n {7) w ftm de Initial DasdoM Dare hffed on de $h ollhc psailirg 7-Ys Fixed Dschne* Rde on rhe Picing Daa dd th. ltplieble @gin of (l) l2s% per mun prjd lo connmid OFdiors ture, or (ii) L?5% Ds md fiom dd rnd the cm.rci.l or@rims Dote (tne "Inithl InbEn Rne'). For subo.qudi DrawdowN, inteEst e sill be rhe tne 0) -diy sinple avm8. inl.rpolate! ote b6ei on rhe l€mining renor dd €mputed u6ing rhe sdatll-line nedod on the Rep.icins Dars..he incest fd lhc mdning file (5) y* l€m of rhe hm will be l]le high.r ol (i) lhc sun oftie iien psailins 5Yd Fixcd Bdchntrk Ralc ptu ine applioable n[gi., or (ii) rhe *ethtd ave6*! itteEsl mle

lnr*n 6b

duinE dE

n6t

seven (7)

yffi

oftne

LM.

De.mb.r 3 l, 20,6 sd 2015, the MCI hs ouabding dbsdovns ol t5l .69 nillion (t2.57 billion) Dd $43.71 eilUon (?2.06 biuion), respelively. As of

Th. lM evenarns @vsing the onbbding debt ofMGI irclud., mong olhe6, minrerf@ of debtfo e{nity ud debkefli@ cov.Eg. ntios. As of Dmber 31, 2016 dd 2015, MQI is i. codpUdce rith $e sdd lou @v€mls.

PdoSoLt\ lang-tun loN pdtdble

12, 2015, tho Petosobr, together with ICEC md EEITC, $ tnid prfry ndlagon pleigors, $d enreEi i o a P2.5 billion (or $55.25 nillion) Omibus lid dd S4uity (OISA) Agreemst wi!'r PNB md DBP spccifially to psnially fDde th. &si9, dcvolopDenr, procllMed! corslruolio4 operario' ad minisdce of ill T&lac sole poer p@jed. On

Novenbd

As of Decmber

3l. 2016 dd 201t. lh. P.rosolr dEvdom r

of i2.49 biuion

fully pay lhe L@ fd lh. tcBla e6!nr of each Lndt vithin ts.be O 2) y€m 6on dd afs th. dat ollhc irilid dBwd(lw imeditely follouing lhe Lam SiSning d&, rh. paymenb to h€ made i' every t*enty-No (22) Mi-enu,l p.incipal insr.lbnmLs comencin8 on PSC snal

|I|[llNl[I[ilN[l

lh€ dar€ the n6t sniveEary ofrhe inithl dra{dom ( rhe'Pdncipal Amoniation Dae), inclusive. for rhe arcidmce of doub( dfa grc. pdiod of s.lv. (12) nonlhs ftom lh. inilial drasdosn Dai.. TlNs l]l. coftsponding mout on lhe ,jEl semi'o'ul pa)Denl n duly

clGsifien 6

cuft.t pqtion

PSC pl.dCed all of

ofrhe

longrm I@.

ill propcrty md equipr,enr 6 @ll.teml

in co"ecrion

*nn lhe l@.

Defftd fDmdns c6b m incidmbl cost incrre! in obbininA .he lM which includes docme ry shp d! hdfs ia! .hatd mo4rg., r.l 61ar. nodga8e, p.lfNional f€s, uu8ers lc ed oder @str diEctly afribuhhle h obbininE de l@. As ofDecmber3l,2016 rd 2015. the poftion petuininE b rhe rtrM .mosr of rhe loan mobtin8 10 $l.67 niuion md $2.la nnlion is presenLd 6 dedulio, liom the 1@s paFble ecout md is mofrizd over tne lile ollG lou usins lllc efrediv€ inrffir ft merhod. Anodiarion ofdefdred co* *ill b€ crpiblted until all divni* n.ssry 10 pEpar. lh. Dover plml for ils inlcndcd lse m subslodlidly mnplcle Delails oldE Cnupa umoniz€d defeftd fimcing asb follows: Baloce ai beginniq ofy€& Defeftd fmcing ost on lM draan

Ls moniutid

duins rhe

Balanededdorrd

Ider€*

2,733J39 1,06sr00

11,67J,130 t2,l4l

expmse Elded ro rh6e loffi momred dd 2014, rcspativ.ly.

)_4

t9.03 millid, $4.93 niuion dd $4.52 nillion

in 2016, 2015

Tdbl pdeeds fron availndl &m lon3i.m d.bt mourted sd S2.20 millio, in20l6,20ls md 2014, Esp€dively. Tolal paymerir for

l$s oourei b

f55.77 Diuion

10 155.71

$20.00

nillion, $76.73 nillion

nillion h

2016

2015,

|l|il|||ililmill

7. Depolie ror Fut!re Sto.k SubscriDliom D.rosits fo fururc stx* subsdip.ioa pfrin b lobl oBidedion eived iiom tne noncontulling inlGls i! .xos ofdre althonad c.rit l oflhe dtili.s qirhin u\e Gioup, lilh rhe pu.pw olapplyina the a Da)menr for fihE issum€ ofshms. Debik folloN:

EEIPC

EEI?C

Pehsola\ ipplidion fd incHse in anthodrd capihl Antr @mplelim of oll $e rcquimenls, tho ercu! reclssifi.d d.Dosits for tuorc slock sub!&ipion fton liabiliiy &colrn b equity acour unds nonqntullina ideBt On July 12, 2016, SEC ippbved

i$t.

As df Decdher 31, 2016, dE incme in authorized capibl of Ptucften ud MGI w6 yet ,ppDvcd by lhc Philippir. SEC, lhus, lhc b.ltu* of &tosits qs not cl4sificd d .qui9,'or in rc...dme wirh Philippine SEC Finmcial Reponing Bull€ti No 006 issued in tou&y 2013.

l3 A*r

RedEDenr

Obu.lion

rxe GFup h6 ecogniad iE she in t e abadormdl costs Nmialod wi$ dE Etom.! Avouo. ad Eboui oilfields locared in Gabon, Wd Aftica, G€timal field loqr.d in Sb. ToIm tube6, md pho'ovol@r tPv ' ,le potrn Ia.l|l) D lel&

Movmsb Bild@

in this &counl follow:

b.ginning

.:015

ofys

Additio.s or chage in dnntus

Tmration.diusnid Balu@ d crd olyee

(Nd I0)

O394t

02,2?5)

$196

tuiluilt||ntuill

Discount hre of4.63%

Eb6.

for 2016 md 2015,

15.50% uerc

slinatin! dE povision

for rh€

oilfiets in

Gpedively.

$931233

$351,304

$1966,511 ln 20 L6 ed 2015, ihe .hsee i' estimre Esulred 6on the adjusbent ofc.rryirg mounl oldE obligliion md dimur nre u$d. ne etiin.c q6 piovid.d by.third p,iyqperti a engaged hy rhe cmoniln op@ld of the o ne& in Gabo'\ Wei Aftica. This also resuhed lo r in rhe b@k v,luc in 2016 md imMe in ilr bool value in 2015, of "W.lls, Diotfoos bd otl'er 6ciliti$" a€oui undd "Prcpeily, plm! Md .quipmcnl" in the Gnupt mnsolidared stmdb

ders.

offfdcial ncitio Note l0).

The addirion in 2016 pctuins ro provision for rhe presenr ulue ofthe lcA.l ud @'tudive obUsrriods b rend. Ure silr uron disDodiDg

frikis

ofrhe Tdlac

$ld roNr nlel

fuuE .slinatcd @sis of Dd rmovinA tbe opsaring

O. Novemb€r 21, 2011, PtuGM dd ClpAsia ASIAN wind Holdings CoopeBtief UA. (CipAsir) drded inlo a Shm Pwhse AgEemert (SPA) which * oD. i1). !odi6 nulurl .gFomenl 6 lo lhe sale of2.375.000 shes in Ptuwind hcld by Petocre', which is equivalent ro 4crl ofrhe total issued dd outsbnding shes ofPtuWind.

Sinul6{6ly on Novenber 21, 2013, PtuOtU, EEIPC dd ClpAsir enidld inio a Shseholded' A3tesml (SA). T1'e SA sill golem rftei. ElalioNhip 6 lh. sheholdex of P.tuwind s vell ff mnbining thcir Esp.div. nehs ud obligdio.s in relarion b Paowind. Fuihs, dre SA cmbiN DrcvisioN regdditrg voling EquiEmenb fo. relevdt o.livitid tlal re'tuiE umiDo6 mnsenr ofall rh. pdies. CapAsia {tr sivd tull vorinB md emnmjc rjghls 6 a 40% shGholdfl. On F.biu.ry 14, 2014, the olosing date, PtuCrcen lcr it ontul on Ptuwind 6 a result ot ia sale of the half of itr inbE$ of

3(I/o on

Ptuwind.

'Ille SA 6nths prcvides fd

oll di

put optioN:

cd :idlnwtur\ P$@d

In de absen€ ofa Liquidit Evdt by .hr sixth MniveNary ofthe Closing Da!e, CapAsia Inwfror may d my p.inr rhdend, by winlr notice (tte Pur Norie') ftquiEs retloc@n or ib deignee !o pwhse {ll oI its sh&s in Pehwind .r r vdu. dral sroll e'sG CapAsia Invdld IRR of fificn !€!@t ( l5vo) for ib invest nent.

Mivdary

lehc'6

ofthe Closing Dab, nay d my p.int rhs€frs, hy sftld natic. (lh. C,ll Norise'), crll upon CryAsia lNesbr ro Rll all of ib 6mor shde in PftWind b ttuGreen or it designe ar r ulue rhd shall dsure CapAsh lrvstor u IRR of isdry pe'6t (20%) for ib iNetuent. In th. abscnc of 6 Liquidily EEnr by tbe s*enih

rmll0tilm[ml

-56

ex orclPAsj8 Invslor lhrcW! r Liqlidity Ev.n! ClpAsia Invdrd shall oflhe lnvesbent vith PetocEen follo*ing rhe soheiule b€jry: Upon

.hft

the

Fof[

(a) Affs capAsia Invsld n6 r*iv.d u IRR of Ndty p.rc.nl (20%) d ils Invdlncn! Pelrocrccn shall re*ive Nenty nve p*enr (25%) ofrhe profb liom rhe Inveshenr oler m IRR of taenty p.lgt (20%) ud up !o d nR .o CapAsia InBror of sory five Drenr t75%).

(b) After capAsia Investor h6 Eceive'l u IRR oftwenq-tv. per6t (25v,) on ils Inlestn n! IGEC shall i*eive fihy ps6t (50%) ofrhe pbits ftom the lNesbent Ner d IRI of trenly-file percenl (25%) dd ut 10 d IRR 10 CapAsia Inv.sor of thiny ps@nt (30%).

h!es. ha received eluiq IrX ofrhi4 pmmt (30%) on ib Invesbenr, t*ive smnty-ivc pr6t (75%) of lh. prcnb ircm dE Invetndt ov.r m IRR

of thidy

Liquidit)

perdr

lvot

(30%).

shall

nm oy

ofrhe fouowing:

(a) A $le of dr oI Petrowind's epilal sle* b (b) Tmsfd ofshde by lhc Cmpmy rishb of capAsia iNestoq

tlinl panyl

!o a prcposed

trmsf.ft. {hich giv6 ns.

tserid

investor to div€sl ot ir5 sh@ in

on tne Philippine St@k

ag along

Erche3€ (PSE);

of i innik Dbre a $. lbovc lisling lht enrbld CopAsia Petowird

Ir 2016, CapAsir\ mother 6Dpmy, CAIFIII PTE Ltd. (CAIF III) n%orided for r pmposed sale b a thnd paty of ib 99 99% nenbdship inhn in C5t&i! rhich oqns 40% intd$ it Pelrowind. In Flarion ro thir, it r$ aCFed thct tie SA enrd€d pEvioBly by PtuCe4 IEPC dd Cip^sia shau @a. ro h*e efiei M@vs on a lAtli A8r.malridrd ifio by th. padi€, thcy rc*rowL4.d md odimed lhat c.pAsi. Inwstols ht Option od petocrst CaU Oprion shau

c6e

ro haw

elTecr on rh€ dare of rhe

clGing ofrhe sale which happ€n.d in

As .h. pdnies acknowledged dd cofm.d lhll th. call ed pul olion shall ce6e Dpd sig'irs olthc nq SA, PcttoOM droogliad lhe ddivdive lidilny 6 d December 31. 2016. Cai on derivat e witeolTdouiing b $l0.76 million in 2016 ond lss on dciBtive for rhe yem enden mounling b $0.?3 nillid ud $10.76 millio weF 'w8rizd D*nbq 3I, 2015 0d 2014, esperively.

Unda lh. dislirg laws ollho Rcpublio ofde Philippins, d 16. 60010 of PERC\ issucd @pthl n€k should be o*ned by citihs oflh. Philippines td dE Compmy ro om dd hold &y nining, peirolem or rcn mlle dergy @ntlct @a. As of D*nber 31, 2016, lh. loLl issued ed subs'ibed apibl sioct ofrh€ PMr C.dOdy k 99.64% Filipino sd 0.16% non-Filipino a compmd ro D.cenher 31, 2015 whereir lhe total ksued sd subd.riben opilal siock otth.

tllil[iltmilm

57, c'oup

is 99 76%

Iilipino od

0.24vo

non-lilipino.

Decnber 3 l, 2014 . capibl stock @rsisrl af330.000.000 3ulhori7.4 sd n1,824,220 Gsuei a oubdding connon shues vith p6r vilue ofPl d0.0224) per shm Tohl capidl stock md addilronal plid in crpibl douled to 95.12 million md $25.24 niuion, Espedirelv.

As oi

S€cuitie dd Exchdeo Commission appoved rhe incrcso it ,urhoriEd ctpiLl shGto 700,000,000shG dPl rrvalu!€rsn@ 9ut oflhe enlire in@s in th€ audorizd epihl .rek, 136,912,I I Q @nmon shes havc b.d sbscribed lhoughrfie SROonMay ll to l5,20l5. fte subscriprid of 116,9l2,l l0 @mmon shms addirioml paid-in clpibl Doured b $10.33 million. mounrd ro $l1.4,r nillior\ otrr of On

tue

3, 20 15,

riom330.000,000

'hich

D*mbs

tle P@nl Conpmy\ ciDibl slock coNiss af 70Q,000,000 autboi*d dd 410,?36,310 issued md outhding c@on shfts rilh ts ralue of Pl ($0 0201) ter sie. Tobl mpibl sdk dd addilionol t.id-in spibl mounted to t9 39 nillior md $15.62 nillio', ft sperively. As of

31, 2016

2015,

r,oallL .?015

Bah@s

b€Aitrirg

afyd $35,620,533

The

G.oupt

Dffib]'',0'6

sdd

of capibl eloo* follovsi

o) 1'0.?]6

EilLlllllll||lllx

- 53-

Thft r@ A pp

no d@l@1ion

tq tu.d

of6h

dilidenlls for rhe y€m 2016 Md

201 5

[br1 t "zs I 5, )003, fie BOD apprclod Re @ k ed

ie lpproFieion ol t0 ae aillion td th. oselopnenr On lmu. ofthe Eboui oil fiell ir Gabm, i' addinon b lhe $0.56 millian o4jnally appoptia&d mour. Pdicipation ir rhe d*elopnd! oflho Eboui neld by lhe Cmup is ba appeved bv luly 24, 2003, the BOD approved additional appIopnalion of Eoinei ffiings amounling lo i L0 niilion fd rie &v.lo9mei of the lbosi oil field in Glb@, west Afric!.

On February 19, 2013, th. BOD sppnved addiridal .ptroptided r*ined emi4t mount'g ro $ r .09 niuion 10 ever for rhe Gdup's shm in th. cdr ofthe omiited N.lb in tie oilicld in Gaboq w61Anica.

Ehe

Tor.l aFproprialions for the developnml ol t te oilfields in Gabo4 wel Atns a of million. Furths spasid of the soid oilfield is Decmbe. 31, 2016 sd 2Ol5 mouten b

'3.l5 As discu$€d i' Note l, on Ilne 9, 2015, P.tsoEnereJ sold ib l0% inl.ct in lion 1009'6 io 90% The EEIPC, bringit is oM.6l'ip in 6 m equit Ersaction sime rhere v6 no ohuge in mntul

ltuGFd

PtuGEd b

tudon

w6 .eounr€d

'Ihc efiect olchmge in rhe osnmhip inldesl iD PtuGEd on rh..quit) ,Ei6mble of Petolnels/ dDnry tb. t€r G sDo&iEd d fouo*s:

Edrtn ftd non-conlrouirg iniw$ .6mcmounr orlon intull'ns inGFu sol4 nd ortbred.dr Exc$ orcoEidsation @iv.! Bogtized in equiry

bolns

Considedion

t1.359,171

Al PecoEnerg/ s sepraG findcial $lm.nll, lhc g.in 6on sile @o8niz.d in rhe compEhensive incone mornLd lo $2.l2 niuion in 2015. The prinary

crcdit raling

sbhdt

objativ. ofth. Groupt mpibl nrnagd.tt is io eGUE rha! il ndnllins a tuns sd healrhy apibl raris it oder to snppod ib busite$ od ttwimire sheholdeN'

Th. croup msss€s it 6pibl sdcM sd nuJ:es djDshenb to i! in light of chmg€ in sononic cmdniohs. To minlo' q adjsr rhe cipilal slruonE, the Grcup my incrde debr 'E Aon crcdiioN, ldjust the dividdd !€ynd! lo shd.lDldss or i.su n.w shsH As of D€cmb€r is

bbl liabiliri.s

3l,

2016

2Oi 5, rhe

Glup noniloF copibl

using d d.br-lo_equitv

tuiq which

divided by robl eluity.

lilil[|ilL0lm]l

Dembe. 3 t,

As of

2016

2015, the

Croupt soui€s ofcopilal ue 6 follows:

$115y'A717f,

9;9r;1r

$115,710,442

9;9l,3rl 35,620,533

2!822X69

ryGfle

tqu

lIso'l7J

$136.130.61,1 'Ihe

idle belo* denonss$ rh. &bt-ro-equily dio ofrhe Gbup a

22,449,424

r,859,!2L $134,610,942

Dsmb€t 3l,

2016

1gtetn!

Acmutu payabl. dd ecrued .xpci$s Dep.sn for frnuft tuc* subsdption

r'366'5rl

Asd dilment oblblrion orhs .dncllffit liability I

p"br

Basd

$9,l4qj

.auir

1.40'1

i.q',tdi.

on rte

Gmupt sseMen!

rhe prcvisioD fo. (benelil

ton)

the

@tiol mmag€md obj*dve wde m.l

t.3 in 2016, 2Ol5

inc 2015

l2!3,rm 5,219,303

(tr,432,03t

$5.963.77:

m|fiilffiIlIlll![

_60'Ille comtondts oftie Dermd

h 8.b

Grdpt

ner

defsr.d

liabililid @ 6 follrysl

06biliti*) n.osniz.d i.

di]4flr obrigdio ulFlird aor.ign .rchug. lo$ Acmed dich.d |iabiliry

Asd

PBviion foi r4babl.

&"1

los*

(l'5J-'t3or Def*d

{,'6:i1o6)

(r2t6J62)

ard rc.ogniz.d

in .qutty:

7)u

(sr,!2e,{r8r 'Ihc above deferen

d 6sd dd liibili.ies e pMted

lhe

co@lidlted

61,317,536)

shbed

fmcial pGnid a follo$:

!016

Defded insnc d Ncl5 - nd D€fded itrene d liabiliries - net Nd defeftd inon. d liabililies

Dcnb{

rfjr7j36)

2015

(t,6U,496) ($r,3r7,536)

dd 2015, th. Orou! did nol rcagnize defenti ld as.ts on NOLCO md MCIT s the Grcup bcliwd rhar n my nor b€ pbbtble lhal sufii.i.nl dable i'cone will b€ ovaihble in rhe ns fcssble futu .grial vhjch ltc Lx benefirs s be Edizd. As of

31. 2016

Details ofde NOLCO md MCIT

follo*: MCIT 20t9

2015 351

20t,1

2013

s indic&d on lh. Inplenenli'g Rules md Rqllarions of $. Rmcwdle EHs/ GE) Acl ol2OO3, lie NOL,CO ofrhe RE Dev.lopd dhins rh. fi611h@ (3) yem f.om lh. st d of @nDercial optnrion shall be died over a a d.d@lion frcn 8rN inmde for lhe n*r scven (7) €nseutive t x$le yrrs imcnia&ly iollowins the )d or such lo$, subjel lo the rouo{i.s Fo. MGI,

nd bcm pFiouly ofasd 6 a denudion ftd 8rc$ in@m.i od b. r enh litrn rhe (J@ri6 dd tol fDn dE availDmt of instivs p0ided for in the RE Acl. The

NOIrO

b) Ih.lo$

had

should

Foi tSC, on .ruly 23, 2015, 6e tSC reststotrl vith PEZA 6 5 E@nonic Zde Utihis Enlearise lo biablish, opdae dd n.irtain il5 50Mw solar Facilily pojd !r tne cmbl

tLiltillllmIlfiNl

Tehnopdk dd iho sle ofeldicity in &6rdoc. wid, tne alEsent i popoels s€t foib i' ib appli€rion.

ill grss i'cone emed frcm suM wirhin rhe PEZA .conomic zorc in lid 6fpayi4 all nalimal td lEsl incme la{es. GrGs ir@ne eded i.fd ro E o$ ela diived lron uy bNim* &tivity, n r of retDos, dEmub dd dlouu€s, Ie$ 6s ofsoL! cost of producrion .nd .uowrble dpaes 6 defned by tEzA. Inoo'e 3seftd fiom sour6 oubid. ofthe PEZA snonic ane sh.ll bt subject io reglla @rp@L n@s. PSC shall p.y

lie

sp€cial

ra Ee

of 5% on

AU o.ha incomc oursi& th€ Rx md PEZA

lhe ftconcilidim oi

the slaturory

i.gulolioN

subj*r

nte b rhe efi.ctivo in.me

rd lhe RCIT

rde sho*n in

of l0%.

lh.

coNolidlred siaLnenb of incdDe follovs

Add (d.dDd)

trmiline

In6no slbjrct

ihs

dbfDard

capir'i sains $bjErd h 6ndr

rtrcoft non mbris subjcrd

(0.,4

Mucrion. hdponlton Sro$Ee

dd loidiq .xtens

(rs.r)

l0l5 t3,t27,t93

r.,,70.,?0e t4,49-112 !!,ll?

n|liluilllllil

.62

21.

Cor olEldFicit! 5116 !016

.2015

Depsidion dd Mortiaiion (Nore I0 Puich!*d snices od

uilnis

1,34t.531 222,106

lusine$ 0d alai.d dpenses 55,21t

$tr,1rrt61

32,1t4 t?,113

B6€d on Eners/ Resulatidn l-94, all p@r pmducd shall *l 6ide one cmbvd p€r kilovan_ hou (?0 ol^\Th) oflhc tobl eldicit $les oflhe energ/ gensiring f&ility whicn shdl be applicd 10 Gensarion lacilities od/d dets, rcsoEe d.v.lopnenl pojeb locrtd in lll bdmsay., nuicipolilies, cilres, prcvin@s dd EdoN T1; GrcuP recqliz.d oyary r*s mouiins $45,769, $32,114 md 29.605 in 2016, 2015 md 2014, Bpeivcly. Under th. CRESC No. 2010 02 012, the R! D{eloDer shall pay rhe Sovcment shG equivalenr 10 o'e $d a hsrfps€n! (1.5%) ircm de ssle ofssrhemol sEfl pFducd md such gd.Ftion, trsmission dd sd. of eleclrjc power incon. incidentol ro md eisin! gerembd nom geothedal enssl {ithjt rhe Conhcr Ars l6s 0615 5d expenses inc!ftd lneMn. MGI isedad gmnmst sharc dolrting ro t50,990. $69,750 sil 155,2t I in 2016,

otlt

ftd

2015

2014, rcspedively

Elebic,ty

sales of

lessolai

also

PtuSoltu st rteii only

ls3 rn gpvmtnl she mourins

in 2016

ro t41,471

NoL l0).

:1 C.mnlrDd AdDidirhriveErp.htg 20t4

Sddis. *ases md bdefiis $1,192,112

Depleiarid dd motiarion 243,013

Enietuinnenq

mcdenl ud

D5J5r 63.3t6 43.531 .13,332

3t,951

milil]||illlull

$s2.291

t1,729

3t,3J9 ]]7,249

WiFofi

21,339

22,305 35,241

33,,101

43,439

31,123

t 1,695

of defered expldarion

Gadline. oil

dd lubrimb

S*uriq mdj.dibnd

sfli6

l6.t5l 21,n31 393,312

52.12t

t3;1?,r5J .Othed

'Dedin

niqlloeo6 *pde

chftge, lringe beDeft

)5.

Mi*.llmeu

$3,9ll,032

seh s developmst dd r.roduction expses

ssiJh4,

nolsiation, brnl

Imome

Muisemflr incobe (No&

$r30,532

26)

1722

19,307

t),\92 2,131 $2

|,6t3

t24lJr7

Mano€sdt in@ne Etec b adtninisrali'e fe€s biue! by P.lioEne€/ rd Pdoccn Pebowind Fdrhe ems od sondition .f EI&d ls tusrcrioB. s.. Nole 26. 26.

R.l.Ld P.rly Tnn!'ctiotrs Pdies e onsiddd to b€ Elftd if.no pdty h6 tne ,hil'q, dielly ot indnedlv, to on!!l the olhs torq or *€rcise signiliml inilunc over rhe olh.r pfq in D'kin8 frmcial od opsatinA de.isions. Pdis e cmi&Ed 10 b€ Ehred if m. rrt l'6 rhe abilitv, ditcdlv or indirecdv to 6ntul rb. other Do.ly jn m'}jng fnocial ud op€nting d4isions d lhe pdies N srbjcct to Mnon conbol or comon sigilianrt i'oln€ (refftd ro 6 Af6liet) R.lcled pdies mv b. individuah or corpmio entiies.

ililNilillllmmrl

Stnificflt tmsdions

wilh ElaLd panies

I iin

I 'l'FJ8'1'04'(lL'3.

Ontuly19,2015,PERCNailedofa$0.70nillionlomtonHouseoiInvestenrs,Inc(Itr), oayabloorDecember9,20l5ail.12%i sst These loms hale beo tully piid 6 ol D*mbsll,2016 md20l5. p€rfon irtml atdil sewi6 on PeboEnds/ HI chlres ($l.l30) ps n@lh. Al$, on MNh ,. 2016, ?etoEndg/ eryaled di6 f* ofF56,OOO HI for n Ge'enl contuls dd Swlen Inplemmhrid Revi.a. PeEoEnerg/ h6 engaged HI to

Mmh 2015, PWEI aviild of. +20 nillior (or $0.42 millid) lM iion PGEC { 5 6% unual inbE$ payable in June 201 6, This wa slled-ovd ed pai'l on DMbd 29, 2016 On

m ad,Citioml loM 6on IERC doutitg F20 Dillion (or $0.42 niUion) payable in Moy 2016 !r m'ul inrst raL of 6.104% ftis wa slled oler On May 4, 2015, PWEI availen of

ad did

on D.cember 29. 2016.

Mnasment

in@mc

msagddr ud

Advds

Ef*

orher

minirol

ti'ffitins chdgfs, lMagoent fees for &@unling l€al! swic rendeFn ty PetuEnerg/ sd PdocHn ro

tupton

Einbmmdt

.6ls ud

exD€nscs.

TetB h.! cor.ltions .f b@tdio4 wnh ELtetl poti6 oulshdinE bdm€ d yd{nd e uNecu.i, inrss!tue md $ltlo TleE have been no e@d&c p@ided or ftceiled fd -y relah! pany @ivabl6 or payabls The Gbtrp hs not recogniz€d my inp.illMl on moub due tron amlated coDpmis fo. the vds ended Decflbd 31. 2016 dd 2015 This ?sssndl h udertaten e&h ftucid,q! ihrcuSh n €view of lhe fmooial p6 irion of 0tc r.lalod p,rry md fie d.rk l in vhioh lne relatd

!!! squE$de4!Gv\!4!ls!tr ! The Gbup ha a prcfil{l'ery pld for dnecio6, offi€r, nMAen in its byl,Nr The uou! th. lMr.rrd @caion ofdislribulion BOD. poviden

dd poff she

sna0 nor

ex*n

endoy* d indi€t

is ar rhe disci.lio ofrhe oflh. auditd ineh. bef@ income d sd

lr|milililtiltfiIil

'nie remDeBrion ofthe Gsupt

dtebn ud

olher

mmbe6 of ke! mrtged.nl !rc 6 follos: 20t4

Salai6 md {ages md orher shon+m bm.fit (Nor. 24) RdiEmenr

27.

errse

$320,536

,7)61

Fina!.i.| hsrrtrn.nt 'ne Croup s principd fDmcirl iatuenb include sh od sh equinletu, shdn cm i.vehdrs, hding dd invctndt secuities (finmcial 6scb d FVPL), @ivabl6, Gtiden cas\ lod payoble, leoud payable, &c@d exps.s tnd divid.nds pryable The niin purpose ofrhEe finscial instiumdB is lo tund the c'oupt wo ina clpilal i.quiEmdts, caEeodes od Frir vdues ofFidcial hslrmcnls As of DsDbe. 31. 2016 ud 2015, rhe c,rrying mounb of i\c Goup\ frnscial 6sd fDdciil Uabiliti6 DpoxiDab tnen fan vatues ercepl lot lMs payoble. Tle frt ulue ofrhe loos Davable 6 ofDember3l.2016dd2015 Dour€d to $120.19 dillid md $120.71 milUon onlolr{i b then c,rryins lalue of $l 15.49 million 6d $ I I 5.71 miuion,

'n. n

lhods

ed smprioN

used by rh. Group in estimariq the

C6h od cah equtr'ddt drt Rec?ivabkx

D@ b ih. sbonrm natuc of $e carrying moub rDpDnmat frir

Fan

vaks s. bed

Foil valGs ae

lIont

payble ard

eL't

experLrd

fai' vrl@ of

iGtudb,

vil*s 4

on published quo&d

bed d

rhc ahon-t

carryiq

flmci

qM@n

n!ft

plie.

ms*d pnes B d

of ille

mout rppFxitu

of dtr

instuenb, 6d

fan volu€

F i valws e bas.d on lhe di$oured value or exp€ctd fuM cash noss uing dle lpplietl. int*$ hr for3imileltpc ofiNtsmenb. T1r fand@ for 2016 dd 2015 for ihe 5 yd renq l@ is ddived uing rh. pnjsr.i T-Bdd @upon Be or 1.863% md 4.51996. respetiwl, plB 3.202% cEdit spErd for lnE 6d 6ve yd dd 4.303% lor ihe seond five t4. The faf vde ofrhe 22 yee bor lod b derived si4 rh. prcjd.d T-Boi 6utd re of 4.6,1c44 plu 2,250 cEdn sprcld. For rh. so lobs vih 2-yd te.or, 2016 ud 2015 fair valu is ddi!€d Bins rhe Ersury nb of 5.964% Dd 3.39?% plDs a mdn

|nililttiltmtl

3pled, of nil 0d 0,0?3%,

6pdtely.

Fai value is eiimared usilg a modilied bindnial optjoB pricins nodel which asi$ oft*o p*: pricc c fld rhe bekrdds indElid trc..

rhe

The followins bbles shov fnddd inslDneqrl t@grircd at fair ulue a ofD€emb.r 31, 2016 dd20l5. TIE fan mhe G b6ed on rhe source of vllutid 6 oullired belov:

quol.d pnce in active nskeb fq identical dsds or liabilnics (lxv.l l)i those illolving inpft orhs rha qudr€d pnes included ir I-qol I fiai: ffi obePrble for ihe 6set fl liabiliry, eirher di@dy d indislt (Lwel 2): sd dara !hos. wi& inpuls Id L\e 6set or liabili9 thrl d nor b6.d on obsoblc 'wkei (uobsewable inpub) (kvel r).

Mekebble €quiB

lrvestud

$.uirie.

soll.lub 3hrs

i,,Jrdablee{uityscunies

In 2016 md 2015, there

*ert .o Msf.6

fin4cbl

iNtuent dong

all lev.ls.

D'ivdive Fipmcial Instuen6 The onbined fat value of$e oplions is enimtd using . sodilied binonid options P.icing nod.l which @nsisb oftrc E1s: dl. Dri@ lr* dd tie baclaards indudion @. Undt a tisk-

neltal csumprion, rhe Fie lr* is ued lo pftdjct t ie Fbtiil upuad md downward novededts ofrh. comp$y value 6 of valurim diL. ltc bookMds induction @ is B.d to onputelhov{lu€ ofrheoprim givd tnepFdioled vllu6 inthe pricel€. It.baora&ds indndion fte is nodili.d lo incoDoe wsal Nunplions t]l01 @ b€sed on mMgdents ju4Dent md *pe.brios. These Bsmprim e. 6 follos: G) The projered ofid pri@ is rhe bmk value of

Pehwitd al 5rh yer (2020) (b) Polrowird shm p.ice voldiliry h Nm.d d I c,/0. (c) Thert will b€ no dividend d*ldrrion for rhe 7-y.& projeolron (d) 9Elo Fobability of liqnidit evdt.

|l|l$ilfltulfl[[

Sioifimt

Unobserable Inpub b Valurion The signifmr uobsflable inputs lsed in lhc l.t valw De6ument crts@z.d within of rhe fan vabe hi.@hy togoltd wilh a qumtibrive esilivity maltsis s at Dadbr 3 l, 2016 ud 2015 re a shorn below

De.riotion

@hnique Modified

inpub

hobabilir,

binmid ofliqlid'ty

B6e srDption 2016:99% 2015: a0%

se$itivit ofrhe

input

hel

fan

Iftn€ prcbobiliiy is incrcdd bC 5%, tne dervatile liability

Iftbe

sp,rt

prie

increddl

by 5%, rhe dcrivotive liabil,ry

pie

spor n decred.{i by 5%, the &iivotive liabiliry will be

l0Y!,thode vdive liabili9

sill inclge volaliliq

by 1.4%;ifrhe

d*ltred

hy l0%,

Risk Mmsqenfll Obiectv* ed Polioid Tie Goup nmag6 dd nainains ils own portfolio offidcid itstlmdls iD order to fud i6 oM op@liors Md capibl spendirG. Iihddt in sjng lhese finmcial ituhmmll @ tne follo{ing risk on liquidity, ne*d od or.iit.

Firdoi.l

lte

'ain

finmcial nsk disin3

60r

lhe

Gmupt

6neid instlmois ft

Iiquidit is& meket

due The Liquidity risk is lhe isk dd rhe Gsup L ufrbl. 10 ned ib lidcial obliSdions 'hen crcup Doril6 ib crsh flow position dd @enll liquidrty posttion it Msing its dpcrc to liqnidit sk. Ih.Crcupmo'biN a lflelof@hddsh equivalenb d€n d suficie'tb finmei$ opsalionsaldro nirigare rhe.ffels offluctuarion in c6h no{s Tomvda shon_ Lm ud lonsaem fiDding rcquimdts, de Gloup inldds to ue i.bdrllv gddalod tunds 6 sell 6 b obbin lod 6on firsoial i6ridio6.

fiililruililmm|tlll

-636bl6 belos sumne@ lhe matu,ty Dolile of lh. Crcup s nmojol 6srs od fidcial liobilitiE 6 ofDsenber 31, 2016 dd 2015 ba€d on .onr..tu8l palDenti 'IIrc

l[J,1''J'o,gl3j

l-'s&,]714/ld,!r3

]llr3t!L.!!q!r

--_

Mff-"iJ"*oldl|i,.

Mslerrist isrheiskofIo$ onfutu omings, o' fan vatues d on tuluft o6h flows rhrr nay chdgc $ Day Esult tron cbMA.s ir ndlet pi6. The Mbe ofa finncial 'nstumr a rcsuh ofcnmgE in equity prices, foeign cumncy *hmses nles, increst es md other Eouitv Prik tus* The Grcup closely noriroB dE pric6 of ib

s*ltilies d ! d.ily bais, e *ell d dtityiFific f&d shioh oould diEdly or indioOy altar rhe pice oith* instue.t. h 4e ofd dpsten d€fine in its pordolio ofequity seuritics, $c Grolp Eadily dispde or tade lhe s*dtie for rcpl@ment sirh ndF vi.ble md ls riskv nad@monic dd

i'wsdenr surili.s de subjet la pncc tist dne ro chmges in nor*er ulu6 of irorrunenls disin! eithe. ftd facto spi.ific ro individu.l instuenb s thet &su6, or l0do6 afi*ring nU instrDmenb tldei in rhe Mk t. such

||lil[nlruili$ll

'fte mltsis b€lo* is psf@ed for Ee.ably po$ibL noMenb in th. PSa inlex (PSEi) vith all othe. veiables held @nsrant, 3howi4 l]le impet d ircm. befw Lx (due 10 changes in fair vab. ol.quity suriti.s md goll$@s whose for wlu6 m rqrded jl lhe mn$lid,ten sbnmb ofincone). The Grcup used rbe d.ily avdS! ofnovdots ir PSEi Die indies, pls .djDs@d b.L4 fd cquily s.curiti€ 2015

t29s,l

$11,635 o 1,53s)

(]u) Th@

is no

0,20D

orhd imD&t on rh. Cbup\ .guiry oths lhs lhose alFady afaering

i'6ne

FdFih Exchdle Risk

ExD6!re 10 cuoey risk eises fom loeml rd adminisirtive .xpM, ascls ed liibililies in clffides olhd rhM ih. CDur\ tuncio'ol ctrlHcy which is very niniml sinc. ihe Grcup's oil Evdues ud @stl rd *pens e dendDimEd in US Dolls. Cmncy sk is nonnoEd dd iinlyz.d s,rldaii.llt od is mslged by de Group. 'Ihe msl]ris helov

demonfab the ssitivriy ro a @mbly po$ible ohrg. in tne PhiUppine leso dchmg. El. which is lhc dly solff olrhe Gmup's fcisn excbd8E risk, rirh all orhs vdiahles held coNbt sho*ins lhe nnpDl on in@6. befoF ei (due to chdgps in fiir v.lu. of cllffioy seNitiv.lo finoshl llss md liabiliti6). ne Gioup used the yeu'aveBge ldsasl fmm rte Businss Mmird InMrtioMl in rhe sal'6is

'n. follo

ng able er5

ine foFign clmncyidoniml€d 2016 Dd2015:

fdd

GoUDE of D6emhe.3l.

Ps F642,113J15

fiMci.l istumorl

f,qoivrletrt

of rhe

Peso

5r29r4J33 Fl,531,172,611

Equnaknt

t32,535,605

7,t52,211

3{2,060,92t

6,379,74s

r,trs,t3l]tls 22129299 5J42,O712r4

Aoourl

1r5/a12n

1,333,511,609 39,.061191 5,.{45,131,401 115,710,442

pa'€hle and aened

334,5)6,610 13,795,721 2!9.662,m0 4dr9,l0t 597r.689114 120,106t30 6,129,360,031 134,506,16L .P,tt50.504.,t 9r rt9r.6'7.03r, (F4.da1.143.42) (Xo<,/r3,763)

ofD*.hb.r I l, 2016, 2015, rhe exchdAe nt s ed

F47.06 per

lot coNeBion

ffi

?49 72 md

I, Espsiively.

ltmrutmmill

-70-

fie

fouowinE 6hle dmons@s rhe s.nsitivity to . 6o@bly po$ible chsge in US dollar *chmAe iaB. Wirh aI otird wiables held corstonl, rhe efed on the GbuD\ inonc b.fo€ is

(s.rr33I54)

4Ia3,3!4

2015

($4,?7r,933)

4,111,$A

Ir msr

Rale tusk Ine Grcup s exposu. ld ntukd nsk id chsges in inteEi rabs r€labs p.imily ro .he df l6s paylbL is fired fo! tlte crcup\ Ioms payrblo sd deivalive liability. Inrere$ fixr tue (5) yem dd vill b. i.tric.d thft.frer.

Tie bble belor demonshbs the sensilivity b i mmbly posible oh{ge in i.bsr Nith iU olho vriable held conslait ofrhe G@up\ nd inome The Gioup usod u:. f(Hosled ore-yed TE6ury Biu mb in psfomina .he atlFis b.lo{.

nrs,

(s1,700,722)

Th*

h no othcr inpoot on rhe Coup\ eguit orher .hu thos. alreldy afaeiina

iMft.

ofcrcdit ri!* silhin rhe Gbup sincc nosl of iE limcial 6sds de *ith coMdium op.rrls, a$onSn cEdit rLk is innat tial. Tfie 8rG ldiNm .xposuc of rh€ G@npt oedn isk ir eq!.j b the canyi'g moub of the nMdd !sls.

Th* !e signifimr mncdhtim

TheGbuphs!v.lld.t'€dcEditpolicytudcdablishci.rcdilpreduEs In.ddilio, seivablc bdoB E h€ins ndnild.d on . r?gule b6sis ro ensue rintly ex{ution of 'e6sary

intdention.fforis.

|l|m]tmlI[Nll

,11ddminE the crdir qulity by clN for lom-Elded oaolidtkn ${mcnts of findcial posnion lires baed on rhe follo 4l

The CrouD

C6,

sh.nM inwthat ofthe fidciil insritution.

in bmks a1d

Epftrion

b6en m $e druF ofthe

sudrades

md &e

66ed on the prlment behavior ofthe €dbD&l'. Htn 3n& p.nliN to i€eivoblrs ftom ansnim oleer nd irterest l*ilable ftom shoden inwsbenrs sbdrd grde p*i6 io orher lteivables. Borh re neither pal due nor jnpair.d.

n..,iyzrler

Th. i.bl.s b.los sbow lh. credit qu.lily ty cb6s ot 6sei for lomjelftd coBolidare! sbr€meltr of fimcial position lines, baed on the Gmup's ftdil ding 3ystm a of Decdb.i ll, 2016dd2015:

Hiehqrrd.sbnd[dgnd.|Dditrp'nld

HLsh

srrd. sMd'd sad.

","!

inpriftd

Ftr n$lgeDent purpGes, rhe Gmup is o.8diad ido bBinds unils b,sd h6 nve Epotuble segnentl 6 fouows: The oil poducrion segDent L

e4rg.d

'Ihe g@th.mal dergy segFent derelop6

on lhen

prcdlcb md

lh. oil dd nin@l exploEton, dev.lopndt

sd opsdr6 gsrh.lml sllmfrelds

pNa

oer&/ *gndr 6i.s oul$c gae6l b6in6s of goeding, lrdsmining, odor difibutina pord derived im sird 6eEJ sollrs. Sdin8 2015, this w6 noi presEd a opdarinBsegmenls ois b€cmeajoinircntFin20l4. nE crcup l*e up ib shrt in n.t eminss of Ptuwind sd ps.dts it tn. coMlidaLd sftmmb of inede ud.r "she iD n l inon. 0N) of o joinl lentu". 'n. $lr derg/ Fgmmr tries out solar endgy oteFtio's olmc croup Other acriviries Fniin b G.mh od investnent diviti6. The wind

n|[$|lltruLil

-72No opeding segnent have been aggrga&d lo fom llle rbore repotuble oDdling s4m.nts.

Mafrg.ment nonior ii€ opdding Esulls of ib busine$ lnits sepmtely lo! tle purpase of nBldn! daisim abour Bo!i@ .llo$lion sd prfonme ase$mmt SegEen! p.rfomatce n elalucd bascd on opraiing profi or lN ed is is!red consistcntly sid opemrins p@fit o. bs in lne consolidrtd fmcial $alm.ntr

o&loDd.!d.iao!0

oenJot s,z:.rr 6!rrsr)

ru!J)

nr.l'

'h,-h. D6dh|'dt|'!6iil

o,qroD ct6,$D

(6rJ4&M) or,o?,t{)

r"eo

{?t{!4r

n[lruillmmilN

cja.bo 00r1d1)

28,t60.t1

03dijt)

ffi

cicroup investnenb, Evmues md .xFds.s

29. Arlic.Diluled E.ming, Tne conpubrion of rhe

eliDi'ed duing consol .rion

Sh.re

Golp's emings pq shft follossl

Ndhconeatbbubbl!b.quii}

\redd d.i4

oumbs ot

shr.!

0,7r6J10 t0

004J

21)]]!L 100076

she e olollarcd sin3 tne .d incone aittibut ble to e9ui9 hold6 oflh. P,Mt Cmpanydiridedbytneweigjjkni!mg!Nmb.rotshG OnJune3,2015,Seurii6sd Exchmse Conni.sim apprcvcd de inclse in the aulhdizd copital frcn 310.000.000 shes b 700,000,000 sh6 at Fl ptr !'18 ps shde. Our of tne otiE incl%e in ihe Nrhori4d capibi Embgs

per

slook 136.912J l0 cmon sh4s h.vo b@n subscrib€d rhrolgh May I I ro 15. 201t G.. Note 20). 30. NorcoDrrclli.g

rhe

SlNt Righ

On'e.ing on

I .r6b

nonculrolling inrssb NCD p.rLin to lne lO% shdcholding! of EEI-PC in P.doCEen, l5% shmholdi4! ofTrs*Asia dd INOC it MGI md 44% sh*holdings oi EEI-PC in Petosol& As

ofD@nb.r

MGl Petsosol'

2016 md 2015,

and

Ptuwind

dti1i6 incorpo*n ud op.tating

in de Pbilippites.

lil[il]Lllllllll

As of

D*mb.r

31, 2016

nonconholling int Es6

2015, lhe a@@uhbd b€ldces

ofdd

ne1

lo$ ddbulable to

N s tbllos:

2t16

Aannnhr€d

brbnsof troro

mlling

MGI

rJr2,05? 4,313510

94,002.0?3 N.r imon. nos) rrrtb .bl. robcotrtmlli4 i.reBt: MGI

2,868,633 116,042,125

51,597,l]1

1.501,,153

',923,363 'Ihc summeizd firacial infomalion oftise subsidiaries is provid.d b.low ir Philippine Peso which is rhe .uhidiriet turcrioDsl gllftncy. This inlomalion is bzs€d oo dount! b.fore

inLr@mp,'y elimiDarim.

Th. 2016 dd 2015 fil$cial

sbbmetrr

olri

infmiion

nclrl Posiiio!

lor MCI

lollo$:

P596t05y'11

t310,497,164

3,?59,030tr39 3,353,103,714 (457112,133) (652160.361)

(2,13F4?!M!!9!.!!!.1 I

Fr/60676,?77 Fr,lr9,730,l4l st t n.hll

conprche$iv.

F?39,3t6p37 Pr74,45l,lJl (6,13r30J03) (566,3:14,479) sbbr.trIl Nol

Flm

0f csh provided by

Operaring

{ud

in):

a.tililies

Finscing aciiviri.s Ffted orrm'ed.hmFnE N.l incEe (d*Me) in sh

f33a;4r,115 ?272,161,1U (9?,910,65t 022.330,735)

o490r]6a Oj3plo)

(15r,&7J13)

(470q0o)

lutMilmlllfr![

The 2016 finmcial

infooatior for PetuGrem follow:

Slltm. olFiuRid

2015

PNlllor

(265.631!092) (123,n30,3!2)

Equity Slrl.n..r

(439,610,963)

(90fl4l!!)

?1, | 75,541,169

CorpFl.nrlv€

cain (los) m

P71.71?,r98 F255,095,413 1;1vt,493,0\5 |,192,7 15,994

hon.

P11,,r53,609 ?u.405,103

t0,3a2,7r1

ddiv iv*

Exp.rss Nd Dcome(lN)

(33.393,5Q2)

(.17,436,004) (40,700,46!)

Pa-4,&U26 G!a6qrj'o)

Net cah provid.n by (used in)l

inM (defte)

Tl)e 2016 fbanoiai

Sr.&nent

ir @h

inlomtion

for Petosole

(36s,062)

(6r5,443,r51)

(P6,696,0r6,

P13,404,374

follo*:

orFi.'mill Pciliotr

lt!5,1!6,356 2,959,r09J?,1

q Q21,1 29 r)

eJm'usl2n P9?3,!r00,5

P1.261,266,540

2.339,095,003

01) G,31r.334,933) F10q,303,0s7 | t,526.663,5

St'&me ofcoDprch.Ntv.iron.

r:peb6

(Je6'360.r2t (lr,e'J6)0)

(F739,r25p93) P76{,360,3?5 (172122Ja0) (2.337.066,0s9)

Opeding aclilili.s

ou,323I9t

Firuoing adiriries

rfferorroRie*(husemk Ne, 'Ihere

incE*erd*@ej

wr€ ro

diridends D6id

(2J0lPl2)

h6n

b don@d.ollirs

(!l.025J7rJ.q

3,252,930,639

!! ?!f?!:!!L

inrffit.

[[Nrr[unm![

-16The

. . .

inc'ls

in nm@nlolling ideEb non slo.k issuoces fbllows: Decmbd 31, 2015,ledosolar onvcned ils deposir for fito€ sbck subsoiiplim i!1o oapild $ock vhich in*a6.d th. nonco.lrolling inrffir by t4 49 million As of D.mbd 3l,201s, !tusdd isued 3,100,000 comon shaB wirh $2.04 pe value. 'ne i$w6 incBed rhe nonontrclling inleresl by $3 05 niuim, PeL'ocFo aiso issued 55.250,000 shd* rhich ircmed the non€nt@lling inlerl by ft l I Diuion as oi De@mb.r I1,2014. MGI i$D.d 743,330 oomDon shfts with 100 pe valG. suoh stook isum6 incrt8.d 6r nonconrolling intffib by $0.l3 million. As oi

The

incr.s.

Plrd

ron€tullina inere$ ftoo stock i$w6 dG in'ffit i' rh. subsididies.

mr rsuh b tlE dilltion of $c

Conpmy'3 efietiv.

31. ReD{.ble E.ere/

ad of2003

Jmu.ty 10, 2009, Republic Ad No.9511, )n ,4d PMorkC fie De'elapnd, Uilizdian and Cohnetualtdion of Re@able Ewrs Reerc andfar other Pwpetsr, othe ne knrM as the "Rdsrblc En.€, Ad of2003" (ih. ,\ct'), b.cme efidtue. The Acr ains !o (a) &cled rhe qplod.ion dd &vclopnent of rene*able derg/ rcsouM suoh 6, bur nd lidicd lo, bion6s, sole, *ind, hydb, aeorh.mal ud o@ oer8y som6, including hybtid systeNj to achi*e ends/ slf-rlidoc, thFueb lhe sdoplion of sldait$I. endgy development sbabgi6 to ienua lh. coubyt dependen@ d fo$il fiieh sd tiereby minimi* rh. colnLyt exposuE k, pri@ nudrrim in the inMalioMl m6td, the efab of *hicb spLl dou to alnon all s€br oflh. *orm, (b) irc'se th€ tilizlion of rcn.{ablc energy by iNlitliondiziD! the dflelopDent ofn.tional sd leol oaPa6ilities in rhe use of m.wable dergy sysbnq rd pmndling irs efiicienl md @sl*lTedire mnnscial rypli€lion by providi'g dd nd-fis.j jncentires: (c) mcouEg. lhe d.v.lopnent md ulilizaiion ofMeq$lo endg/ Gouc 6 rok ro efftc.iv.ly pdd! or Ednce namtu dissioro dd ln*by balmce rhe goal3 of esndic gro\t r md d*elopnenr with lh. Do&.lion of h*hh md enviromml; ud (d) esbblish the n€€3.ry hnddolue 3nd menrin ro calry out nsdrles sptcified in rhe On

6sl

as pnided fd in the Ac! Ren uble EnsSy GD ddelopds oi RE faoilitis, including hybrid to ln€ qlenl oflh. RE .mpoenq fF both poad ud non-pwer systens, in proponion ro 'nd y lpplicarions, 6 d cenili.d t'y lhe DOq in m6ulbnm wilh ih. Boord oflnvesbenb {BOI), shall be entided b the follwi'3 in€nrives, mong otheN:

lncone

Te Holi&y (lTH)

duly r.Cislf€d RE

ii. iii.

- For the

d*elop.r

shaU

sevs (7)

b..xenpl nom

y.d

ol iE @mneEi'l opsaliats,lre ldicd by rh. N'tionil

inmm€

Duq-fEe ImportotioD ofRE Mmhine.y, EqDipn.nl md Mrrsials - wirhid the Insl6 (10) yes upon issMce of a c.nificatis of u RE develop€r, th. impat&ton of t@hinsv ud €quipnent Md nat rials od pft therf. includins mtttol ud mtmunicdion equip'enq shall nol b. subjeol to kitrduries; Sreial Ralq Tu Riles on lquipnenr od Machinery _ Any law ro die dnltuv nosiihtuding, isl1y ed oths hes oD civil tdk, equipnent, dfhin.ry, ud oms ftcim.s inrdven.rt3 ofa EsisEd RE dev.latd eluslly md exclusiv.ly used fq (l les &c@!lacd nomal 5%) of$en oriBital cost shall Dol dc€€d one fd ! holfpd@r den*iarid s n.t b@k uiue: NOLCO - 1he NOLaO ofrhe RE d.v.lopt dui's rhe fftltI!& (3) y€m 6on ln s6:t ol mnmdial opsarid which iad nd ben previouly ofisd a ded@lid fom 8Es

iv.

'n6fre

truIlruuilfl[l

shrllbe

v. vi. vii

6on sFs incone rot lhc rcn swen im.diotely following rhe ,@ of suh l6sj

ied ovd

d.duotion

(7) co$.curive

dible ,€4 corlomte Td Rd

Ane. selen (7) yss ofrTq RE dev.lopes sh.ll pay a mrpoht 'll (10%) dlble in6ne s d.lin d iD tl'e Nrrioml Incml m ils rel De€nt s mmded by R.public Aol No 933?; Revenu. Code ot t997, Acleden Depdidid - If, sd orly if, o RE psjed fiih b receivc ITH b€f@ depreidid in its tlr b.oks sd be Lxed brscd opeclion, it n.y apply fo.

!*lee!

flll o

zeo Pmml VAT Rac - nre ele of tuel or powr Sremled from Enewrble so!6 of enss/. th. puchAe oflocsl goods. pDpdie md sedi6 nened fd rhe dd.lotmmi, cdsindio. md insbllatid ollhe plonl feilitiE. a well a ihe tholo ptw$ of exploGrion dd d.v.lopndt of RE soNes up b i6 snvdio into powr shall be subie.t

ro do rsFnr (0"/o) vAT; viii. C6h I'cenl e oflE Deleloprs for M;sion

Elebificrtion - An RE develops, Ac! shall" bc htitled ro a cah 3qe6.ion-based incenri'e per kilosrt-hor iaE gdenled, equtualenr b 6fty ps6! (500/") ofde ui!e6.1 chdge for p.*s need.d lo seriG Dksionay al6 Nh.rc i! opdabs dE smq Td lxmDlion of Car$on Crnib - All Drcc..ds lom rhe srle ofcabd tmission orcdib sholl 6. exempr fton dt dd all Lxesr od Tu Credit on Dmeslic C4ihl Equipndr dd Sewi6 - A d mdir equivaltt io ote hundred Decnr (100/") ofth. labe ofilE vaT md cu$on dut.s tht would have bd paid on rhe RE hNhin.ry, cquipmeng mrsials md pad, nod lll6e irens b..n impoded 3hall b. BiveD to d R! opsaring 6nta.t hotl€r who pNhasd l@hin.ry, equipmtrq nobrhls. md Frt fion a dmdiio nsul@er for pDAM set fotii in rhe Ad esbblished and lhe efrectiviq ofthe

ix. x

ldsl mdnf&hrs, fabricotoB Dd snpplid ofle.lly-ptoduoed RE equipnenl shrll rgist r uith the DOE, duNsh the Rddable Entg/ MoasEnmr Bw$ GIEMB). Upon r€gistuion, a cenifidion shall be issued to ach RD da.lot r sd lodl nmutrctur, f.bricabr ed sutplier ofleaUy produced rcnwab,e end$/ equipnenl L sd. 6 rhe bsis ofthoir e'tirlemflt to the in@ntivd loviden lor in rhe Ad AI conificarios Equir.d 10 quali& RE developd to ovail ollhe irc.rt es govid.d for under tne Acr shtll b. i$ued by rhe DoE lbrcu8l lhe REMB, RE dcrel@eB md

32. Ehcnic Porer

Indorky R.fom ,{cr (EPIR-A)

After emerging non lhe cdppling powd crisis rhd ocored in lhc esly 199G. the lhiliFpinc Govemenr dhdk d ar m i'd6ty privatiztid md rutactuing Prq@ envisio!.d to suE lh. (lequb supply of eleclricily h delgiz it d*elopi4 Mnony This retuluting schemeisendi€d inRANo.9116,dFEPIM Appiovtdon,u. 8,2001..heEPIRAseeksro ssft qnility, r.liable, sure od rffodabL .letrio power supPly; dcouaE fr& sd fan onpelitionr d$ooe rhe i'flo* ofpnlat. sriul; ud broadm rh. omdhip b6e ofDows een€mlion, tusdission md disLibulron.

poblds of dE power s*ror. Ine hug! iw.stnelt Fquiment fdr nes Soemtion capacE sd dpssion ofrh. nsesd tunissim ud disdbrtion neNoik vd eslimr€d ar m mEl oreBg€ of the n.ed for sEftr $l.o billion, Civen tu oM n$d coNronls, rhe Govemdl '@gIizd priv*e sator pdiciparid re privde sebr involvesonl in dE po*s seloi. Even liough sotu succe$tuIly irrodmed alier beN.m lh. Nrc od p te inv.sioN, tiis time. the Covcnnenr is envisioniq addre$iq th. p@r s4ror inefficid.i.s md rhe nonopoly in the gpnmiion busines EPIRA ndd e! $e Mnll Mhcoritg of6e Phil ippine .l.olric Pows ind6lrv dd The

cov.m.nl viwed Etuctuiig dd Efom 6 a long-llm $luiion

lo tne

r|IIillflililfim]l

-73call€d for lh€ priv,riztion ofN?C. Ihe reslruturing ofde eleoticiry indufy calb forlh. snpon.nts of lhe lorer sdor. rmely: 8lnmtiod, ltmnhsim, sepmrion of the dtutibuliol sdsuppt O! rhe otns hrd, rhe priv.tialion of lhe Nrc iwolv6 tne sb of de

ditr*

srare{Med powq fmt 8lndtion dd rdsmission 6sd (e.9. pove plob dtd lmNni$io aiDed ar encoDFgi4 Srals conpetirion facilitiB) b privare inv.sh. flEse two Ffoms p.v6 nore privrb setu iNetudts in th. indusfy, dd atFa0lirg

A n@ emp.tilive power idudy will in delilery of eleticiry supply ro dd-usen.

resuh in lowd

po{s rdd 6d

moE €ficienr

Spoifi.ouy, lhe EPIRA h6 the foUowing obj€riv6:

Achiw. lrsspaMoy rilh ihe ubDdlins ofrh. iain snpon.nts of eleai.'ty srGs, whioh Nill tE refl-ten in lhe cmumd eletioity ralesr Openins up ofrhe eleclricily n$td lo ompdirion d the vholeale Gdchljon) lcv.l to inpov. efiicieroy i. the openrim of po*e. pltua dd rcdound 10 lows el*ticiq pies; Enhmce 6ndEr inflow of pinre cipiial dd boodd oue6hip b6e i Senebnon, bmmissio distibution. dd suDply of eleolrtc powr: Eslablish a slrong md i'dependenr regularory body th.l will boldoo lhe inlqsr of both 65e invsroB by psmorins cmpdirid dmuAn cMio. ofa lerel playing 6eld dd trctlcl$. electicity dd{se6 ftm ey n.rkcl power abuss Dd d.isnp.tiliv. b.hovioFj atd Acoolem& sd dsG rhe bbl eledifidion oflh. .owl.y.

u9! a.

Certiircd

Emi$io'

RedudioDs

Pmhe ASsmml

or*i

inro a cdifi.d Enisid Reduclions P@hae agrem.nl on teuary 3l, 201 I, MGI rh lndesi C.rbono S.r. CEndesa") ofM!d'id. SDain. Und.rlh. ERPA, MGI shall sell 100% oflhc Cenified Emission Reducrim ( CERS") goeBbd by rhe MdbMt cdrbemll Pwer Pmjed (ihe '"djor') in f.vot of E de 6on the slal ofits comnercial oDdrions in oclob.r 2013 uril 2020. This will Drcvid. MGI sith o srrM apart 6om ele.ri.it sle. It should b. norci lha! uds rhe RE Act of2003, !u prcens 6on rhe sale of @bo mGsion cFnit shall be erdpt Aon orry

{ ER?A")

sd es

Pojed h6 udsgone F8isbarjm pree$ rcquiEd uds rhe UN Clm DolelopDenr MechdisD (cDM) Tr s inoludes th€ prepadion ofrh. Ptojei Detr Dsudt (PDD), Mlidalion cmducted by a D6igared Opdrional Edily CDoE" or'vdida!oa'), applioolton *ith lhc Dcigmbn Nadonil Aurhorily (Depafinert of Envitment dd Nfitml R6olll€ ror rhe lhnippin.t, dd r.sislEtion or r@pb@ oflh. Projol 6 a CDM Pbjdl Acliviq by lh. cDM Exeolive Bo'rd ("EB) nc PDD which wG pEpGd by End.e peDE infomdion on the esenlial Ebnial md orypidionl ap€cb ollbe PDj4r divi9 md iJ a key inpur in the validaliorl, Egieffiion md ve.inc id ofth. Projeot MGI ontr&t.d lne Spdish A$@iahon for Shdddiz.lid md C.tifisdon ('AENOR') s ihe vslidrror ro perfom m independent evah.tion ofde pDjd aclivity lgtist lhe EquiEnmG of tho CDM ondreb6is ofthe PDD. Tre ssEtridt oflhe uritei Nltio6 fmdoik conventon on climrL chse€ (LNFccc) h6 €nim.d thd tne MGPI hs ben Fsisr€rd etr*ri!. Tho

|milm:mmlll

Upon connercisl opsarioN. MGI .hall collect md mhile all Ele!flr d.b nec.sary fot slolaring sEen hou$ g6 (GHG) dissior rcnudioG, *hich will rhd t€ subjeted lo Deriddic indepddent

GHG €mission

vrificdion.

T[e

lB *ill thd

hsu. ih. CERj equl to rhe veified

Rnudioa.

enditim fo @bon credit s*sely afGcied Ends4 nfesibriDg it closN dd evdo.l liquidolion. For lnis lson, eft*iile tue 23, 2013,

The sloNdoM in sorld Darker

MGI dd End.sa decided

Dunrlly

himte

the

IRPA.

On JDly 3l, 2011. MGI eni.red irb o m.ndmdun af rgrnenr (MOA) Bilh En l Tnde domiciled in Rone, Itdy, {ith rhe iniertion of S.P.A Gnel), a Cout Egisr€Ei

'rddi$ssid, ncgoljotion, od @psarion of a mlo.lly dloblishing m almgemot fo. i\e beneficial CER purchde !3Femmr. To ddq MGI hd nor yet closed a CER Puchae

aC€monlvilhEnel.llleMOAisvtlidforoneysftonthed.l€of ibsisni4 Hov.vd, MGI has nor closed r cER puchGo agrmenl witn Enel bd .he MoA vhich is valid for one y.d fi.n the drte of irs signing thB dpired in 2014. MGI hd nor mdergon. rh. validation pree$, besuse ofrhe poi n&kd condilron for dbon cndits, md MCI only do so mce rhe sme ftbounds.

'ould b. Electicity Suttly Aerencnr

l, MGI entercd inlo o Eletisity SupDly AseDed (Ml ESA) wilh T'm Asi' Oil ed E qS/ Delelopoent CoAonridn (TtusAsio) in {hicn the lans oflsed b ptrcha. oll ofrhe 20 Mw facili9k nsl ou9ur In 201

staid on F.bn ry 3, 2014 md pmudl b lh. Ml ESA, 8il or 01delilery poi't in rcudd€ sitr lhc elect!i.,9 delivsy Dt@d|B Asi, rhmush th. eLctlicily f@s rhe pri€ aseei utoi ud subjeotto on lhc se.ord conhd y€&, for chdges @ forcig' exohmge ud infldion

The conmerci,l opsdidn

MGI

net

{@ sld

c.leiry to

Tts

adjutuent shidg

sale of el*hiciry hder lhc Ml ESA moubd ro tl6.53 billion or milliondd$16 96niUiondPT?2.01 niuion in2016 &d2015,Esp*rively

Rwerue nom P?34.61

ln May 2016. MGI dl@d irto oorhs Electicity SDpply Agtem.nr (M2 €SA) wirh Tlns Asio, lhG tine mvdn8 lne net oulplt ollhc I2 Mw *pmsim. The cm ud @nditions of d.M2ESAftsihildrolh of rheMl EsA.

Operotiry

he dmituab - lM

Gout (s siglee of PCEC) mrded itio a 25 ys opedins l€e agrmdt with Luisib lnd6tidl Pdk CorpoElid. Th. lse is EDew.ble by muntal 4renent of borh pdis smerally uds lhc sme r€ms dd conditions, wjrh es.lhtion claGe of 3% .lery On Jue

34.

22, 2015. rhe

wid Emrs s€rvia Co.hcl

(wf,Sc)

Eke6t Seniee Contmt (WESC) No. 2A09-01002 on Novoher 4, 2013, D.velopnenl Bu! ofihe Phnippin s (DBP) gtrred 10 P.howitd ! F2.3 billid lM lor $e prcjed pr'€ble in 15 y.m. Following thii Pehowind signed kev @nstldion od supply cdtu6 .ov.rite lhe sibhysrd dd bdsnission line *il[ C.ndalt Witul

|LilI||tililrl

-80Ensinedng, civil wdIG d the vind fm inoludiDg intsn r Dads, lubin folndotions, *ind .!rbin. supply, iNblldion, md conhol iom blildings widr EEI Colporarian, n.inrenscddoDadion lh Gdes. !.li€'ldof S.L Unipesonal Spain.

fd (36 MW) slaftd in De@bs 2013 vith EEI pej€t &c.s iood 3! enlry poinr fton rhe Pbvincial higitoy. Tie a@$ coomencinS rh rhe bads rere onplet d by 2nd quorter ol2Ql4, while rhe inlenal rco& for t\e fisl eight UTC (Wind Tlrbi.e Centu ) bvm w* emple@d ty 3rd quan€r ofrhe ys. On DeMb& 19, 2014, Pehwind .lso obbincd hvo (2) key approvals ton Eneigr Rcgllalory CoDsnsion GRC). rRC approled P€tawind\ rppli€tion lor a two-monfi lsling ud sals of sdedcd po*er ofthe n6t eth (3) wTcs. P.towind also eeived rhe appavil 1o d.velop, o'n, od ope@ a dedicihd poinl-to-poinr tusission facility @nn.cling lho Nab4 wind Fan b the NCCPT Nobs4aricld 69 kV ove ead bsmission line, Constructid oftie th6e I ofthe {ind

lini half of 2015 w6 dcvoled lo oompletior of rhe @nshclion ofdE *idd fan in Niba, Aklan. On Mmi 2.4, 2015 PWEI sftce$fully ensgiad !d disparched po*t non .ighr (3) wTCs (WTGk l -3) lo the Visryd grid. Or April I 7, 2015. the Deplnnfr oalndgy (DOE) issu.d is Nonirution for FIT Eligibilit'" ofNsba3-l . fte DOE also rel*ed on Apnl 30, 2015, ib cefrificare of EndoMenl olNab6'I whioh is oe ofrhe ts4uiienmll fd oe ERc ro pftes twErs c.nilico& otco'pli,ne (coc) ror lhe pova fooilily md fd FIT eltibility By Jue 2015, all eigbbn (13) WTC'S b..omc op.raiio'al. On ,De 16, 2015, lh. Depafrenr or Energ (DOE) Ele6ed the Cdifidre of Edoddent (COr) for FIT EliSibility dd6inA the ofiioial sMofcommercislopdlidb b.Jud.l0,2015 Tne ErErsy Reglltrory Commission GRc) also €hplet d ltc siG visil for DOEt CO! IlI valnb on on tue 24-25, 2Q15. The

Au!6r l?. 2015. rhe ERC atpoved PwEl\ Cdifiqie of Conplidc. (COC) fq Phde I Thh confim llle @mmeEid opmtion daE ofrhe vind fam to be JDe 10, 2015. o'r SepteDbfl 3, 2015, IWEI rsiled lh. Philippine Eldiciq M'ke. Corporaliant (PEMC) &*no{ledg.mm1 olP\rrEI s pdisipari@ in rhe wlol.srl. Elelioity spor Makd (wEslvt). Upo' Elia6ly ope.atin8 nU .ighr6 il3) WIOS od @onplishing cdolidalion of cpp@ed pmchlisb dd o.her pm4uisitc deMcntrio'i PWEI eepi.d lh. wind F@ Tborc. c.rtificole fFn Gmesa on Decmber t2. 2015. On

o @Nultur, Mddeh lnsgy (MDM), windfm lm.gmhl t?t.ins to. to do siE audtasn.n! conducr Mdog.me psxom.l, PWEI tshnidl md evalu& Gm6at n@rhly Epqts for the fi61 )€a oflhe O&M. Thesit. luditedtEinincss conduci.d E MEMlastMay 10 l?,2016.

ssis. duftg thc initial sLge ofrhe o&M, PWEI ha sSrged

MdrlMc Sedi6

The

Prvdtive

S{itching StdioD, including

Fo. the

(!MS) ofrhe Windfm EleoE al Flciliries (i e , Sut€iatio Swnchgs) !.rc sucestully conductd @nn^y 2l ' 22,2016

(O&nO ofrhe wind toibines, G@* had adpl.t.d ils on July 05, 2016, its 3-Monrh (3M) Mainkndc. rclivitiq on

Osblim sd Mrinl€n4e

lz-Mdlh ( l2M) Mortemce 12, 2016, rd vill slin vith $? l3-nont! pEvmrive ndnb{c on Octobd 03, 2016. prcgrm for the l3-nonlh minldm@ works is fd on. (1) \rIIC pE da] fd 3 hos o'er m Th€

Aw6t

lhe B.ld& of Ploi (BgP), including .l4ticsl feeder €bles, substrtion, suboftebr - Aimtgy od Renwible hc. _ irom done by Aug6t03 12, 2016, inirial E$ rsulE of shich plsqn Gdda s ovoluation

Mainrdm€ *o.kr foi erc.,

Ni.

Gms's

tI[ilruillnlHI[|

slop. in

poleiid

Auge

works have been inplemenred thsugholr 2016, .von duiDg rhe tFhoon seaon 2016, to shich mnhclor GS! w6 abl. lo 6sss lho i'tegnty of rhe snplekn

rd delsine

*db,

ior tunhd voda.

sht-doM duing rhe otrldeft ofT}ThM M,M' on Noldbei 25, 2016 du b grid failurcs rldu lh. I l3-tv Nabr-Pmib line sd the 69-kv Nabalcdiclu li'e. OHit, the seid tTh@D 6ued ninor soil edid. nito d.nog. ot the @e$ od canal dd obtucled cms dnim (esp*ially rhos. hor'inB 10 wTcs 9, 1.4 md 16) bur rhe e$ oflb. sile remainci udd nmal operotirg conditiors. Sib cleding opdtions along th. dni.age cMls sd r.ad reslrfacing works wse conducred non Novmb.r 26-29, 2016. Tne NWPP

As ior rhe varioble R€nwable EHsy (vR!) T6b aill NGcr, PWEI ir slill owriting ofthe linrl Auihdity to C.md ftm NCCP'S Rerenm ed Resulab.y Af.in Crcup olfi€ in Manilr, which is cxp*ted io b. issuen in Febflary 201?.

issmce (RMC)

Fld Jdud! for the

35.

0l lo D.cmb.r 3I, 2016, rhe lobl me€/ expotud ro thc grd is 101195.76 Mwh Prciedt Pl6e l, wirh rdenue ofPbP 765.3 MM bs.d on lhe FiT prie of P7 40 ps

Conrnd r.dAgruD.trb

Rdol

Moniionne svsten

sd T*hniml a&iso*

sdi4

A@m.nt

agEnmr vilh Fuji El4tir co. Ltd. ro conducr rhe op€mlion md Ddtrnm€ ofdE M.ibdd povr plml. Tiis will include rhe Bdildin3 of rhe poBer tlsl op.ntiars Emolely from Tobo, Jipd deu8n r mote nonitori'g sysbm b be esiablished by rhe Fuji El4tic. Fudha, Fuji Elecric slull povide lire r*hniul sewices to MGI d insbces wh*in the powr plrr momrd ldhni..l poblos Eqninng o') Auast

19, 201 I,

McI ent*d

inro m

Foi rh. mdc noniionrg sedi6, n\e fee modb 1o *3 nillid. Forthe @hni€l advis.ry p€r hou md pd day. Ttis agenmr sh.ll b. for a senjees, lhe fee is b6ed on a psiod of tne EPC conhd pdiod of one (l ) ,€& comd.ing on tie *piry ofrhe ye6 lh@ns npoD alEmd! of both for tie constlot'on of pows plst', tu*.ble prnies. This *d rme*ed in 2015 md .rlended urrtil Otube 2016

(*in tu

.sy

*ddty

on oclober 19, 2016, MGI Dd luii execur.d $. Twhnial seryics A!@ent duly Eplacins the IMS-TAS. Urdr lhc ncw ogrnenr, Fuj i rhall disprt h one Teoh' ical Field Adviloi one .vry sii monds ro @'dd a resnld field insp€clion oftie plels opdtion ud Egul,ry mss MGI'S qDe.ies thnugl phono colls or enail cortsp.ndenG. Should the sitodion ell fd i! IDji auld dispotcn ib pr5@el *ilhin 43 hou6 iD otds ro adde$ dglnl

!&E!!!s!!e!4sr!!r4

Inremmeclion ASement (ICA) with MEMLCO for lhe phtsical intrcmeljm of !h. Blrc.tior sd clDdion fa.ililid of MCI} 20 MW pNd pldt 1o MlRAtaOt di$ibdion sFh. ft. Dovd liDiliq being coM.i.d in BrS/. So Rrlicl, MGI sig€d

uil!ntilmil[

Sro.

Tom, Bat$ga will

com..l!d

MERALCOT .xisling I l5 kv line in Calmbo,

TrdsAdo lnd MERALQ s*r.d a Memomdun ofAgFm€nl vhioh efi*tively wailed tho palDenr for the *h€ling oh'ges momling to $96,1t4 (?4.r0 nillim) ps mo,'ih. On .ruly 7, 20 14, MGI,

Mc, sd FUn silled m D€camber 21, 2015 de cmt?ct for the DdufactuE ud supplv of the l2Mw $rbine, eEneabr md olh.r main equipnen. fot tho Mdbmr 2 {M2) *p$ion proj6i Ille plFst of rhe l0% doM pslDmr mounting to 11,055,600 00 v6 nade on

{ill Deuftu rhe .quiPDenr withh l5 monrhs and deliver io Mcl dClRMdilaonFet'uary20,2017. Installarion of th..guiptnert shdl be sup.flised by Fuji imluding the mhntusioting olrhe M2 pow* pbtf lo the 8id Undd the @nbacr. FUI

Thc lolloNing mnhcb h.vo be.' enhed 50MW Tdlac Sol& Power Prdjer (ISPP):

Iran*or* Amd.nr

for ihe Ownd

ifio lor tne codtldion md d*elopmdt of

Eneind seeEs

€fud inb th. Ftm ort AgEmot for O*nth lnginea sjrt sB sol! Inbmttional AC ($ntsr) Unds rhiJ asi.sen!

On tunc 25, 2015. IedoCGn Senices ror rhc TSPP

engrneen-s.enid colennC *e f.r proF I phtue\ frm con'eF SlnFgt, smilpm\ide 'iih d;\ el;DmmL Pv sskm Ensinedns P\ Posd Planr D6elopnsr &d Pv Po s lldr Proier Execulion. Tobl mllaot pnce mornld lo $l,t00.000 Olfshde Suoplv conhcl

P€lmc€d .nltld in1o D Ofishc SuPply Conhcl widr Cders/ Asi! & (Consg/) for the supPly ofall inpoded sold poua plmt equipnenl which s ME PTE LTD r€qDiEd for the orelruotion of rhe TSPI. Total @tu1pti6 moutd b $46,735'500 €rclaive of valDe Added Td (VAT), oli Jde

10. 2015.

agls.rt requns lhe pdlin8 of a patmflr bond 6 secuitv for lh. obligation b pav nE 90% bd{e of the ofishm Conbd P.ice On Julv 0,2015, t.tocEen sd8n.dthn

The

strpply conracl lo Petosold. Followi'8 rhis EquiFd bond froD M,liyd Inslmc Gmup, Inc

ofthoE

ssigtmot, Ptusols

obbined rhe

OnsboF CoNtucrion Cohtad

Petd6jg enreEj inb d Onsl'oE costutiot ConbDr vith PhGm' Ino. {h*in Ph.s shall insbll the inlode! sol[ pover plor equipn n! Penbm ft. eldicrl tud noisicsl ro*3, po@ locsl platt Dobrials, md t.rfom comissioni'g sedis. Tobl mnhct pri@ Douien b P247,950,000 Th. conhd wa 4r3nd b on tlne :lo. 2015.

PtuSold

lulv 9. 2015.

CNrdiMlion A@emdl On

Jue

30, 2015,

!tuGrcen

s,Ered a

Cdditoiion Ag€nenl wirh

Phcscq Ins md

liltmtililillNI

INDf, Pf, NDENT AUDITOR'S REPORT ON SUPPLf, MENTARY sCHf, DULIS

Thc Board of DirecroB

dd Stocknolkn

PetoEnerg/ R*ourc.s CorpoBnon 7th fioor, JMT Building, ADB AEnue

aodrce

wi.h Philiptile Sland?rds on AuditinS, the consolidated We hale audired in sbtements of PetoEneq/ Resou4es Corrontion and is Subsidisis as ar Deenber I

fin&ci.l | ,

2016

2015edhaveissucdourEponfteftondar.dFebMry23.201? Outiudis{eEmadeforlhe purpos offoming an opinion on the basic fimciil sbrcmdts blen 6 a vhole The schedules lilred in rhe Index o Consolidared Fimcial Sbremeis and Supplenenrdt Scheduls &e rhe respoNibiliq ofthe Conpanlt matu8cmst. These $hedules e pr.snted lor purtoses olcomplying * h Ssurfties Rcgulalion Code Rule 63, As Amended (201I ) and e not pon ofrhe bdic finecial shteDenb These$hedul.s have been subj*ted rd lhe auditing prccedufts applicd in the audn oflh. basic finan.ial slalemenb m4 in out opinion, finly nat, in all naErial rcspeds. rhe infmation rcquned to be sd fonh $eEin in rclarion b rhe b6ic finscial sraremenb blen a a $hole. SYCIP GORRES

VELAYO& CO.

ola t rua

SEC Aocred ihtion No. 07 31-A R-2 (Goup A), Mi, l, 2015, volid until Apil 30, 2013 Tax Idertilioation No. 901-617-005 BlRAccredib.ionNo. 03-001993 ?6-2015.

February27,2015, wlid until F.bruary ?6,2013 PTRNo 5903?75, January3, 2017. Makari Ciry

ilililillllullllllllllilll

PETROENtrRCYRf,SOURCf,SCOR?OMTION ANDSUBSTDIARIES INDf,X TO CONSOLIDATtrD FIN ANI} SUPPLf, Mf, NTARY SCIEDULES

CONSOLIDATED FINANCIALSTATf, MENTS ibilny ror consoli&r.i F nmod Sbemmb

Reponollnd.p.ndenlAudlo6'Rep.n

con\olid!.d sracmenb of Finmclal Po:irioi 6 cmsoli&red Shtments or comprehensi!. Decmber I I, 20 r 6, 2015 sd 2014 conelidared

Dedb.r

sb&h.is

Ii.oh.

31, 2016, 2015 md

ro Cdnrolidated

De.mbd I l, for rh.

or Chsces in Etruiry ror rhe

Finscisl

yaN

yea

2016 and 2015

ended

endsd

l0l1 yds oded

con$lidared sdenenb ol c^h Flows lor rtc Dcnbq I l, 2016, ?0 r 5 hd 20r,1

Nors

sdmeft

SUPPLf, Mf, NTARY SCHEI'ULf, S

B. anou6

Rs.ivabl. from Didots, officm, Enploy.a. R.lftd Pdi6,

Pnrcipd sbckhorden (oo's rhm ReraEd

C. Anoo* Re.ivlbl. nm

c.nsoliddion of Fimcial

R.ld.d Pdi6

sbtmo$

Pdiet

which aE

Elininatd dring rhr

PETROENERGYRESOT]RCES CORPORATTON ANDSI]BSIDIARIES SUPPLEMENTARY INFORMATION AND DISCLOSURES RXQUIRED ON SRC RULE 68 AS AMENDED

Sauitis od ExchdgE Comissim (SEC) isud lhe moded Sarities Regulation ruls dd labeled in rh. mddnelt Code Rule SRC Rule 63 ahich consolid.lG ihe t'o ple.ib.d It also rhe .ddilional i.fondion sd schedule '?d1 I" Pod Bp@rively. Philippire

srmt

r',

Rquienenb for issus ofsecuitie b lh. tublic

Belowetnod\cirionalinfom.lionod$hcdulerceuiFdbySRCRDle63,6Ane.d(201I)lhal m Elevmt io the Gsxp. Illis irfomrtion G pmenred for pures offiling lhtheSECodisnot r.quircd ps otthe b6ic fimcial scimb. Schedde A. Fi.mcial A$ets Th. Cronp is not EquiEd b disclose lhe fod.ill 6*ts i, eqnity seffitis 6 the rod nmcid 6$b d fair vrlue rtftq! profil dd lN secuitiE mourins ro $162,445 do nd coNtnft 5% or nore oflh. btal curent 6s6 ofrhe stuut a d Dember I I, 2016.

6on Dilss. otrrccn. Imolovees. Relaled Pdiff (olhd lhd Rdaled Psnis] od Pri'cibal Sts*noldfls moub Meivibl€ fion dii*16, ofiiooln emPloy*, relaed As of DeMber 31, 2016 lheE de 'o pani6 ud pircipsl dc*ldde6 thil iSgFStt s .oh io moE lfim FI00.000 or l% 6fbbl ascts schedule B. Amounts R@iva6l€

C.nsolid

ion of

Firuotrl slllmenb

It.

followirg is lhe s.h.dule of €eiwhls fim Fl.t d ,!rti.s, whioi @ elininabd in the conslidded n.acial shmb a a! D.cemb€r 31. 20161

s2:o

Tmetions with olher Ehbd pdi6 ouaide lhe Grcup. Ple6e Eftr b Nd 26 of thc Cl)Mlid.t'd FiMcial Shtnenb.

p Inhsible Asd The G6up hs d insierifi$t mout Schedule

$1.01

nillion. Bulk of lne inbgible

Sdldd! E-l!4:!rr!o&!!

'gr

inhsible sets 4 of Demb.r I l, 2016 moun.ing ro teis to llc lard righ eqnisition 6f Ptusolr.

Ptede pler to tJa CMahdde.t Aulrit d FiMcial

stat.wnt,

ot?

l6Jor debitt olthe

loN

|mil$t|ll|ilmil

Schedule F.

bd.blednd b Reldd Pdies lhnq Tq!]

Th. crcup h6 no ofttuding Schedule G.

longrm indebtldn.s

Cl.Mlees ofseuiries ofother

Th. 6rcup does nor haw

gu,fure

lnN &m

lo Elale!

lJsuen of surilie of o$et

Rclated

Conmied

pdi6 a ofD€.dbd

ismd 6 ofDe€db.r

I, 2016.

31, 2016.

Schedde E. Cariial Sl@t

edd6cbyt]dedoft(sod

e10t9,r6 r,B,ae

3a.7r?9I

rmmrmililill

PETROENERGYRISOURCES COR}ORA'I'ION AND SUBSIDIAR]ES

siTueortr or rurelcteL souND\Ess r\DIcAToRs AS OF DECEMBER 31, 2016 rbd 20ls

iir*

!'.

'r.

i*d.t *,t* t" * *rdd

colmr rrio (undtrpas.3r,

(rD

b ne GDup

roral.uror

tor rhe

'nded

Ddnbs

I r, 20 16

20r 5:

d od profit + d.prcciation hsh ++dim lBbllirie\

Ana

Tdl

sbcknoke/s equrv

Earug! b.roE

"t@,ry; baE d{-t tBA d.P

th.

inffi,nd 66 (EBo)

.o$dd'atu'Ptoser ad

t.",

""'t'

PPr

rNilutmml[tl

PETROENERGY R-ESOURCES CORPORATION RECONCILIATION OF' RETAINED EARNINGS AVAILABLE FOR DIVIDEND DECLARATION DECEMBER 31, 2016

Unapproprialed Relaitred Eernings. Beginning Prior year adj ustmenls: Unrealized foreign exchange gain Unrealized Unreslized MTM gain on UDappropriated RetaiDed E.mitrgs,

actuarialgains FVPL

s3 adiusted

Januarv

$13,847,986

net

1.20t6

Net income bosed on the face ofaudited tiDrncial ststements

(247,943\ (5,779) (75.498) 13,518,766 1 ,1 40,71s)

Less:

Non-aotuavuDrgalized incom€ net oftax Equity in net income of an associate/Jv Unrealized foreign exchange gain - net (except those attributable to cash and cash equivalents) Uffealized actuarial gain Fair valu€ adjustrnent (marked-to-market gdins) Fair value adjustment of investment properties resulting to gain Adjustment due to deviation from PFRS/CAAP - gain Other unrealized gains or adjustments to the retained earnings as a result of certain transactions accounted for under PFRS Add: Non-actuayunrealized losses net oftax Depreciation on revaluation increment Adjustrnent due to deviation from PFRS/CAAP - loss Loss on fair value adjushnent ofinvestment properties Movement in defened tax assets

Net income actuel/r€alized Less: Dividend declarations during the year Appropriations during the year Tot|l Parent Company Unappropriated Retrined EarniDgs Avaihbl€ For Dividend DlstributioL December 31.2016

(235,600) (16,404)

(t1,992,719\

$1,525,987

illiltililtffi m|ilililil]]ililil]til

PETROENERCY RXSOURCESCORIORATION AND SUBSIDIARMS SCHEDULE OF ALL THE EFNECII!'E STANDARDS AND INTERPRETATIONS UNDER PFRS AS OF DECEMBf,R 3T, 2OT5 Below ir dE lii oflu etrdive Philippine Filmcial Reponing Sbd&& (?FrS) lhilippine Accouling Shdsrds (PAS) dd Philippin Incerdalim oilntcmitiond Finmial Repoaing lnreDdrions Commifte (FRIC) 6 ofDecember I l, 2016:

conc.pMl Fmwork Phe A:

objd

Fjn'.'rn.Addp'rmofPl'jlippb.rjhecjdRepdij'g Ihvstunr

in a subsidbry, Joi.dy contolled Enriry or

Arcndned

ro PFRS I:

Ad,titimil Erdtions

for

Fnr

RdodorFixedD"tfolrid.timAdoph

AnddlMtbPFRS,:vdn'scmdi'ioBmd Anodm4r b

PFRS 2: Goup

Cah-sl.d Shft-bsd

anerdmcnb h PAs 3t ,rd PFRS

Non-cllm!

A$4 ll.ld fd

S,l. bd

Fiio.i,l Cu,mre

Dituinu.d

riM.ll rnllw.dB DiqlsuB arendned

ro PAs 19

PFRS 7:

Rel6rifi.otidn of

An.ndm4b b PAs 39 sd Plts 7: R.chsmcrbotr of Fhmcial A$eb - Efidriv. Dd. hd Tffirion

An!'dno! b PFRS 7: Inprcvi,s

Di$losGs

ibdr

PFRS 7: Disdo.us . ofrdinc Fi.scial Assd ud Finh.iil Li,biliri.s

anend'Hr b

Anmdn* b PrRs ?: Ma&ldy Efldive PFRS 9 md

Trsiiior

hddnEtr b PFRS 9: Lrddlrory Neq H!ng!

Dat of

Disdosues

ElT6riv. Dd.

A(mdis R.{dirn*

Pl.6s@jdnofFiffi(iilsBanmh PAS l: hrbblc Fil'tri'l PAs 32 'nd Aftinc oi Liquidation ad oblisiim

An4dned h

Intuent

Ac.ouiins Polici.q cho36

an idhdr

ro PAs l2 -

itr

A@utinc Esrimts

D€f.d.d

rd: tu4vdy ol

anendomb b PAs

19: D.6ned

Atrouting fd cov.mn

Bs?h Plds -

Gmb hd Dislosu. or

AlMdnm'NdInvfuduir@ignop.d'on

a(dutncdd

R.ponbsby Rdlmeor B.oeft

MendbmB b

PAS 2?:

rnEtud

Pl4

Ennns

FiimblRaoniqgjnHy?eliDnatui4E4imbs

r,Btuenr rd obliglrid3 atuins d uquid.rion M.ndnrd b PAS r: Clasificdon of tushb r$G anendnrd

ro FAS 32:

Ofi.ejns Finbcial

Asd ad

Am.ndnetu ro PAs 36: Irpaimdr oras* . RsovdrbL Arod Di!.los'ffi for NoD Firocial

P'lMimr, comi4<d Li,bil ri.!

rnd

condrydtAs.E

Fi@ial hlDmdE Rocliim and MdKmat An.ndn* b PAS 39 T,mitioD and hidal Rapirim olFituci.l ad hd Fimcial Lirbilnies

AnmdnenbbP S l9: c,sh Flo* FoF6t InhsFuP T''Ndic

Heds!

A@Dtins or

^nmdm4bbPAsr9:Thera'vilu.oDtion hedd'mb b PAs 39 ,nd PFRS 4: Fimcial G'l,mb Anendnmt b P Anendtunr

Fitu.ial

3c 8nd PFRS 7:

Rel6i6.arioo or

ud PFRS 7' klNindion of Eftcriw Dit od Tmsirim

ro PAS 39

Ass

AnendneDb ro Phlippitu

ldr.rp*don

IFPJC 9

PAs l9: Inb€dded Deri6tiv6

Ahddn n6 ro PAS 39: Fiio.hl I'tumb: Rsog''jiionandM.sd.ndl

chmss

in Exi.tids

De'llmissiooing, R.$@nd md

Mmbd sbft incGopdtjv.Enriti6a sinild Detmhiry tush6 ro

whethq M

Intu

lnmsmd cad.i^t o t .de nd D.misionins;

'nbg R.b.bilidio FBd. R*@rio fld ENnomMl Liab ities ei'inE jnn Pdiituhs i, a s4lft ^t&4 w6t Eh.hcd ad Ettu,b Eqripmd ,tpplti.z th. R.tuent,1warch sd- Pls 29 Fiwcid Rqtuns h Hwlrltaio@ Eq@ia R6esmd! Ancndnetr

ot rmbedd.d

LlridiYes

Pbilippi*

ld.lptuiM

I\tnr Ftnn td R.pune PFRS 2 - Croup ,nd

dd Inpam.tu

TlBury shd.

rmdiG

sefricec.rc*ioAnesenms

cdob* r,Fry

Pq@B

Ljnn 0h 3 D.fi.d 8m.fi. A!3.! R.quii.md6 ud l}cn In6&!o 'Irle

IFFIC

t ind

anendm* b

PhilippiG

ln6ad6dN

IFUC -

14,

rrep.)mnb or! Minibm Fuod'ig tu'ruhment He!s$ or

Ndbl/lfus'

Fiffii,l

Eni4unhing stippinc

c6oL,driotr

in dre

ina Fonlgr

opsdim

Lirbilines wi$ F4ury

P:odu..id Pbc or. surfde

sFi'r

Pxlpo( Endties

Am.ndfr.dbs|c.|2s@P.ofslcL2 Jodly codMu.i En

nies -

In6tuTues R.6vsr In6ne Tds - O6g.s

NoFMdebr) c.nEibdr@

of R.!rlu.d NoD-DepsDble in 6e

Eriluring d. Slbsde

Td sbtu ord hr'ry

orTm*id3

livolvins rbe

sflid

cobBdm Arnnsmmb oi*lolue! R€du. 'Btu TllrlrdG Involvins Advdisirs inbg,bk as.ts . w.j sik Co$

rmdions

s'Not

alplicable" n've been .dolted by de croDp but have no foi thc yee e.ded Dsbd 3l, 2016

st ndlds bgled

stnificul covs€d

6 ofDecemb€r etr*ri!. rhen lhee bdoDe dd hterpFlalro6 Gmup *iU rdotl tle Sbd'rds The Stud,lds

b$td s Nol

odopbd"

m tudaids

issuc! bm not yd cf|erivc

31, 2016.

ti --r lql Lil lll Ll1ZI ------ri fl 5

_ Ii'ETE

ead

E:iJA

E i! 5 ;, EZa z z a2 e

t.t IFL

lFl

-_TJ t-l l;

l€l Igl

l€l

Ei tr

t1 'i :

x E! :

PETROENERGY RESOURCES CORPORATION RXPORT ON SRO PROCEEDS December

3l'

2016

(SRO) The StO ri/as On December 05, 2014, the BOD approved a 2: l Stock Rights Offering o"aert"t"o a*ing tft" period Iraay i i to t5, 2015. The proceeds ofthe SRO amounted to Php 599 68 million or US$12.36 million. As disclosed in the Prospectus the Company expoots to raise gross proceeds of approximately to the PhP599.68 million or U3$tz.ge .lttion *a nftur deducting listing, registration fees related

offer ofPhP592.46 million or US$ 12.26 million. and The proceeds from the SRO will be used to partially fund the exPansion, construction (Maibarara 2) MG-PP Phase 2 ofthe to Mw projects: th€ energy deveiopment ofPnRC's renewable Africa West in Cabon, Projeot th€ Etame and Solar Power Projec! as well as the expansion of

were The table below sho{s the Sross and nst proceeds; each exPenditure item where the proceeds used,

Precccds frcE the Stock Righr6 O ffc.ing P1p599,075p43 5972,677

Les: Listing aad Registiation Fes

PhP594,602,366

m16

2015

Totel

lst, 2nd &

3rd Qualtcr Lcss;

ExFndrires

A. Et me Expanslon - Dri ing

ofw€Is

B. Maib.!@ GeotlEm.l Ploiect well Cost Fluid Colcction & Rcinj<don

15,740'937

157,943,406

164,890

96,881,836

9904,959

39172,422

Pbase 2

96J16,946 29,567A63 System 470,065

IGu.nc G&A and Odrer Costs Fi''3trilA Costs

742,202,469

Tel,c Sola! Pow€r Pbiccr varios Plwiously RcPorted ExPser

Tot.l Exoe$cs Allocatcd to Procccdg

472'954

943919 7AAOJ14

r'48O,774

5,165,AA2

1579913

6,A44,495

I17,000

175,500

133.459.610 r233a,AI6

145,794,446

58,500

114,67

t74,673,326

3)26

4EO,335,425

Remiaing proc.cds et of D.ccdbct 3L zrt6 R.mainina pece€& a! of D€ccDbe' 3t 2016 i! USD

2a,O79,753

41a,$5,n4 PbP116,187,188

t2J36,830

Philtoo'n""i..r. ""itil,i tl +,f fJ

CERTIFICATIO

RESOURCES CORPORATION, with ofiice address at 7'n Floor JMT Building, ADB Avenue, Pasig City, after having been swom and in accordance with law hereby states that the information contained in the hard copy ofthe Gene.al Form for Consolidated Financial Statements for the year ended December 31, 2016 and the one contained in the compact disc ale one and the same."

auyo{Ll0?0f

IN WTTNESS WHEREOF, I hereto affixed my signarure this 2017 at Pasis Citv.

tr||,'\

CARLOTA R/ WRAY

AFFIA|${

SUBSCRIBED AND SWORN to before me this APR 1 0 20172u1 day "1 Pasig City, affiaht exhibited to me her Tax ldentification Number (TIN) 100-732-809.

Doc.No. ZZO PageNo. {'t BookNo. | Series

of20l7

; ; ;

,r.10!lE

I\r|ARK

F'rm , r4y'ubr. hr th! &d intlE

Uill

'l,rlil I rr

Ci6

Prr g

rid:

trrip:liIol P,hoi 31

orietb?.I11

d9.0ir9a! Cliler Ro

R LllllC0t,

rio l{ll?016201!l

lrlo

i3111

h:!i: ftt:i i

?:l!5?? 0!/ii/11 r. .i$t6 !1r it7 [sil

. hvlii:ii105rlt,

SPECIAL FORI! FOR FII{AIICIAL STATEIIEiIIS OF PUBLICLY.HELD

IIATE

CURRE

AI{D IiIVESTIIENT COMPAI{IES

PETROEIIERGY RESOURCES CORPORATIOI{ CORFORATIOI{ AI{O AI{D SUBSIDIARIES SUBSIDIARTES

TADDRESS:

ilo.:

Jlff Buibhc,

?lh Fbof

ADB

Asu.,

53t.29it coflPAt{Y otLE(PtoRATtoll r h.se .ft btsed on consondelnd lt .rci., sbt ,ren6. ore$e so ird[c.E io tlE c.Dti@. TEL

P$rc:

1193

Table l.Consolidatod Statomgntr of Financial P@ition

( rn

I A2 + 4.3 + 4,4 + 4,5 + 4.6 + 4,7 + 4.8 + A"9 + A"i0l 4.1 Cunenr r.ss€rs ta.1 1 +A 1.2 +A.13 +A.14 +A.1 5) A.1.1 C53h tnd Bh euiElents{A.1.1 1+A1.1.2}A.1 1.3)

ASEEIE {41

20'l4

2015

2016

FITiANCIAL DATA

211 2t 701

237.131

(ln f00o ) 112.08

12.697

9.781

12.915

32.536

2.818

{InIo0)

!000 )

A.1.1.2 ln dom€€lic b6nb/6nlil€s

12,910

32,532

4.1 1.3 In lorehn bankvenlities A.1.2 TEde and olher Recoivables lA 1.2.1 + A.1.2 2)

2.1 0u€ irom domestc onriri€s {4.1 2.1 1 + A 1.21.2 A 121 1 oue Ircm cuslomts (u?de) 4.1.2.1 2 0u6

A 1.2.1.3 +

lml. lelal€d oadi€s

7.86t

3 592

6.934

?619

r 859

6.926

1726

1815

3 572

880

a12.11Olhel3.sD€citu{A.12.I.t1+A.121

3.2)

144

A.1.2.1 3.1 Accounls |Bc€iv?bl€ -

OPirC

€0

6 ,54

927

973

1,713

921

973

1.i13

162

156

163

A.1.2.1,3.2

A.1.2.1.4

ote|s

Allorafte lor doubflui accounb {nedlive entdl

4.1.2.2 Due lmm lo€ign enliti6s, sp€.ily lA13) 1+ 413r, + 417r 3+ A.1.2.2.1 A@unls

A1lr l\

r*iwble - Velco

44 (60

4.1.22.2 4.1.2.2.3 4.1.2.2.1 .3 lnv€nroi€s iA.1.31 +A.1.3.2 +A 1.3.3 +A.1.3 4 +A.13.5 +A 1.3.6 3.1 Rry roleriab End suDolies .3.2 Goods in prc€ss (in ludinq unfnish€d ooods,

qofinq crcp!,

.3.4 lGrchandise/Goods in llansil .3.5 Unbil€d S€fticss lln cass ol s€lvce o,ovidas) 3

6 Olh€u. so€.rv (A.1 3 6.1+A I 3.6 2l

A.1.3.6.1 Crude

oil

4.1.4 Financirl lsseb othd

incnldY

$& CdtlR*iEbles/Eouiiv invBhenls

A 1.4.1 Fimndal AsssL al Fat Valu€ lhrcugh Pmfil of Lo6s - bsuod by doneslic enlitio6 {A.l.4 1.1 + A.1.4.1.2 + A.1.4 1.3 + A 1.4.1 4 +

156

4.14.11 NalionalGowmmnt

2 Public Finamial lnsftrtions 3 Public Non-Financial lnstiMions A.l4.l4 Pnwb Financ6l lnslitulhs A.l 4.1 5 Piwte Noi Fhancbl lmb'hiliom A.1.4.1

162

A.1.4.1

A.1.1.2 Held lo Mabrily

lnwstMb

- hsu€d by

156

103

dmtic slili*

(4,1.4.21 + L1 4,2,2 + 4.1.4 2.3 + 4.1.4.2 4 + A.1 4.2 5) 4.1.4.2.1 NrlionalGov€mnenl 41122 PftlhFinrn.irl l.dihnidnc 4.1.4.2.3 Pr hli. N6n-Fin.miel lnsiii ni.ns

4.1.4.2.4 Privto FiMn.irl lmlillti.lM A142

Privrrd NM-Finamial

lnqrir'tiys

ilOTE: Tnb gmErtum b 4prcar,l6 lo.mpah3 dDas€d r Aoiculure, Frshery FoBlry. hnq, aid O@'ryins, aiur4[trf,s, Ek rdDt], Gs td Wabr comtuton who€ssr 8d Rold TEdo, Tmpodalh., st€se ard cmmunbalm, HoGs d R6b'mb RealEsft, commiit sdJ and P6Mml SeryiE,otslocolFldwljor, zds@6 bsi6op€.alim Ilris lm s d$ appfEbls b 0{s tunpaas uMr d0 mrhas tn6|4$p6cfrc spoc a Fm rt sEr$ru aid ?clMla au 6ry b stdit lom sltdl bo c€d by plhrtrb! 6npt*s and 0r@ 6ig4€d n mn b

rffid

ftqlirsM-y rb#rrm sEc d f!$ *tlch a€ l*vro6rd urd.r Plrlbr@

iibr.€didon rircrr oomJlb @Dfddos

tE Pnl0oB l,/4t tE ca€i ol a@nlc li€qn sE6d rt]ldrio DmrB oi Pribdm o

Flirrlrl Finflil

NrilluoN

iB!turbre Els

e ro

ot dxvriy h rllrrrn

lr"s or

tathetskldrais

rd8lsi coooElrore I

h. PNhdm 0n 0EoD€rhaid roEbi @'IqaloB

@ocalbu lilm9aly dtg4€d 0 nEf,ld inbln'edEljon, r4iilalriq frfl;d iibmsd]dim ,m'ly sE46d n na p'ddlfr dr mrrd qoods ad eirnid s 6s

ccDo€lbN har @

ukry nidralsad.*

Fotf,rytr: -EFFSFI-Z@/SPECIAL FORI' FOR FINANCIAL STATEI'ENTS OF PUBLICLY.HELD AND INVESTiTENT COITPANIES

MIIE

PETROEIIERGY RESOURCES CORPORATION AI{D SUBSIDIARIES

CURRE TADORESS:

coMPAt/Y--dfdEEna-iEE-/tttr!6,rc b.!edo,i corroirrCetodlk cialttate'jontt,

sokc a,/eln/,ecaqtlon.

olaasa

Table 'l.Consolidttgd Shtenrgnts of Flnanclal Po€ltion

20't6 l!00

FINAN CIAL DATA

(in

)

2015

2014

{ in 9000 )

{ in t'000 )

A 1.4 3 Loans and Roceivables - issu€d by dom€slic enliles: tA 1411+ A1A lt + A 1A,\'\ 4,1.4.3.1 NaliondG.vemment

A.1.4.32 Pulti. Fin.nnirl ln{in ri.nr

A1.4.33

A1434

PublicNon-Financia lnstitulions

PnvrF F in,nnirl lnrrir'

4.1,1.3.5 P A

1.4

veie

'riM. N*Finan.i.l lnslildims

4 Availablefor.sale linancial assols - issu€d bv don€slic €nlilies 141441+ 4144, + A 1413 +A 1! l4 +A 1 d l5! 4.1.4,4.1 NaiionalGowmmml

A.1.44.2 PublicFinanciallnstitulions A.1.4.4.3 Public Non-Finln..ial lnrtitulons

A.1.4.44 PrivaleFinanciallnsliiulions A 1.4.4

Finen

irl

A1451

Pdvale Non-Financial lnslitulions Assats i$u6d bv loEion Mtiti€s:

4.1t.5.2

Finrn.i2l A rat. 2l f2t v.l"alhnnh dnfii Hold-tcm.turitvinv€ctm€nts

4.14.5.3 Lorm

nrl^c.

and Rffiiveblds

41454 lvril2hlafnr-e2l^nn,n.i2l,rc.lc A

1 A

AlkMrn.. Lr dA,iinA

alq o|her crfl.nr Aqor.lqrr. A l5l Adurn.r( h n-nh}{nr

mri.er vrlr F /ntrrllva .nrto,

snrr.relv mt*i4lr.m(\ rA 151+A 1F,+A l5

I 52 Shonle,1ninv$lmenh a 1 .5.3 Redricl€d cash A

A154 Mered

Finamim

187

993

313 419

138 87(

140 724

79 058

t91

196

t14

179!

1488

183

1.00i

146

687

180071

162 829

1412 93./34 19413

C6l

Preoa d Eroenses ano A.1 5.5 olhers - Advances lo Emoloye€s Suooes 'nvenlory, A 1 s5 Crude Oillnvsloru A 2 Pomrlv. olanl. and muiom4llA 21 + 422 + 423- 424 + 425 + 426 + A2T+42 8\

A 2.2 Bu dno and morcv€m€nts rndudno ls:€sholo m0rovem6nl A 2 4 Transoorlaliorvmotor r€hiclss. aulomo|va eouioment. autos and lrucks. and delivorv A ? 5 L.nd and lrnd imhhvm.nls A 2 5 Othe6

2473

sBifvlA251+4252 +4253 +A254-A2

551

1.74t 19a

A 2.5 1 Welb. Dlefionns and olll€t ta€ilili€s Ar FCRS a.d obduction Wells Geolhemal

22 4Tl

20 888

4253

11.31i

60.158

2.U7

4AOr7

48 248

,7170

27 631 27 631

Conslructon in Pmoess

A 2 6 AooEisalincFe sBito{A261+A26 2 -A263 +A2641 A r 7 Adrmuh.n O.kiri.niD€bLrion lnd.tive.nrNl A , A lmnrim.nr l.cq n RehMllil lmc nmrivn enlrul A:l lnvaqlmmlc ,m'nl.rl f.r rFn.lhe muiv melh.d lA 3 1 -A3 2 . A 331 A 1 1 Fnuirv in dmFrli. rxhriiidFi/,fi A 3 2 Fn'rirv in f.mirn hFn.h*/Hbri.lird*/:lfilirRr A 3 3 OlheR qHift lA 3 1 1 + A 3 2 1 + A 3 3 1 + A 3 3 4l

it*

27170

A332 31

A A lntrndihla ArGr.lA A I +A A r) a A 1 M,ir irm/e .mifv /A A I 1 + A A 1

A611

Soflvare Licenses

+ A A 1 :l + A A 1

4613

A, athAK .Fitu /A 6, 1 + A6, t + A61 7+ A61 4\ A6.2.1 Soflw?r€ Licames - lccumulal€d Amodizalion

A623 A

7 Arsrr Ch.sifErl

H.H Lr

Srl.

Contot No.:

ro SPECIAL FORI{ FOR FIMNCIAL STATEI'E},ITS OF PUBLICLY-HELO t/AitE OF CORPORATIO PEIROEIIEROY RESOURCES CoimRATor{ CURREilT

T ADDRESS:

TEL.l'lo.r 63?'At7 CO PATIYTYPE:

7O Fl@r JMI Building, ADB Ayenue,

rw", cEi,t,frmi

AI{D INVESTIiIENT COIIPANIES AND

SUqtDnmES

Onisr Gnter, Pris city FAX NO,:

PStCt

O! EXPLOMTtox

lfthaso obetadoncontolftt,/'adtut

clsl ttf/fr'lt aht', pl3dse ao indtcat|

Table l.Con.olidaled Staten.nts ot

1193

c'4tlon,

tha

Fin.nci.l Polition 2016

FINAI{CIAL DATA

(li

t'000 )

2015 (in t

000 )

A.9 LonFlefl receivabl€s (n6l ol clrronl Dor|En) lA I + A 9.2 - A 9.3) A.91. Fro,n domestic entilies soecilv tA 9.1 ' +A.91.2 . A.9.1.J A.9.1

2011 {inl000)

9.14t

4.9.1.2 A.9.1.3 A.9.1.4

A.9.3 Allownce lor doubfful accounls, ner of cune"| oodon lne{alrve €nrrv) A.l0 Olher Assets {A 101 +A 10 2 *A.10 3 *A 10.4*A.10.5) A.10.1 Defened hcome Tax

20.85C

%510

25.547

308

307

202

m542

26.203

25.U5

101v

15.920

19.113

10.40t

10.283

6.232

125.021

t5{,753

83.275

22.42t 19355

41.892

218n

33.873

20.571

1598i

16.539

16.679

4.102

4.10.3 A 10.4 Olh66 sD€citv iA.10.4 1 *A.10.4 2 +A.10.4.3 *A.10.4.4) A.10.4.1 Dsl€red ol exDloralion msls A 10.4.2 Ad€nc$ aM O$er Non-CuflEnl Assels 4.10.4.3 A.10.5 Allo*€ncs lor wil€{odm of defened charoegbad accounts (neoadv€ LTABILTflES t8.t + &2 + 8.3 + 8.t + 8.5)

B.l Cun€ntLiabililies(81.1 +8.1 2+B1

3-81.4-81 5+B.l 6+8.1

ent

)

8.1.1 TrSe and O|ner Pavables lo Dome$rc Enltues 8.1 1.1 Loans/Noles Pavable€ 8.1.1.2 Tnds Pavables

1.14

* 8.1.14.3)

3.373

173U

3.892

8.1.1.4.1 Accrued €xD€nses

611

461

521

B 1.1.4.2 Wihholdino laxes Davable

352

2.423

16.462

3.215

Olh6rs. sDecifr {8.1.1.4.1+B 1.14.2

8.1 .1

4.3 Accounb oavabls

8.1.1.4.5 Olhers B.1.3 Povisions

8.1.4 Financial Uabilili63 (6xcludinq Tlad6 and Olher Pavables and Prcvislons) 8.1.4.1

8.14.4

B 1.5 Liabilllies for Cuned Tar

9.1.6 D€fefl€d Iax Liab ili€s B 1.7 Olhers, sp€cifv (ll materEl, stale separatey indicab il lhe ioT i9 oayaole lo 8.1 /.1 Dividonds dtrlarod and nol oaid al balanm she6ldalo

L I .7.2 Deoosils for fulure slocl subs{riotion s 8.1.t.3

3.02i

8.018

1.250

2ff

221

233

1.781

6 557

1.037

1244

8.1.7 4

81./5 B 1.7.2 Accrued lnlere$ Davable B 1.7.6 Anv

olM curfflhabhv n €xce$ ol5% ol lolalCursnt LEbrIlEs.

B.1.7.6.1

8.1.76.2 8.1.7.6.3

Pags 3

1.017

ronqpe: -@F5 SPEChL FORfl FOR FIM}ICIAL STATETIE}ITS OF PUBLICLY.HELD AI{D II{VESTI,|EI{T COI{PANIES XAI,IE OF CORPORAIIOIII PETRoEIIERGY RESOURGES coRPoRATIoI{ AiIO suB'o|AnEs

'1W

CURREI,IT ADDRESSI

PAI{Y TYFE:-----llfdRtrxa-ti0flItthesearebesadoncr,nsotia@

Table 'l.Congolldated Statemenk of Financial PGition

FII{AI{CIAL OATA 8.2 Lonq lerm Debt' Non-cunenl Inleesl-b€rinq Uabililies 18.2.1 + 8.2.2 + 8.23 + 8.2.4 + B 2 5\ 8.2 1 B 2.2 8.2.3 8.2.4

2016

2015

(in f000 ) 99.50i

(lnt000)

2014 {in t

000 )

99.171

44 970

99 505

99171

44.970

3.087

r3.690

16.483

1 538

1.624

5.128

1 550

12066

11.355

Dom€stic Rrblic Financial hslilutions Dome3 c Public Non-Financiallnsliutons Domsdic Privato Financial lnslitulions

DomeslicPdvateNon-Financiallnstlulions

8.2 5 For€iqn Financial lnslilutions

B.3 lrdebl€dr|ess lo Atfiliales and Related Partes rNoFclrenn

4 lbbilities Includ€d io he OisDosal Grouos Classilied as H6ld lor $16 8.5 Olher Uabil,lies 18.5.1 *8.5.2) B

85.1 Dst€ned lncom€ Tax

8.5.2 Oh€rs. soecifv lB 5.21 +8.5.2.2 *8.5.2.3 * 8.5 2.4) 8.5.2.1 As$l r€ti'€m€nt oblnation 8.5.2.2 Ac.rued reliremenl liabililv 8.5 2.3 Deivalive liabilily 8.5.2.4 olhers EOUITY lC.3 + C.4 + C.5 + C.6 + C.7 + c.E I c.g+c.tot c.1 Aulhorized C apilal Slock (m ol sharcs, par value afd tolal value; show dela ls) 100,000,000

ri.rc.,

1.3 OdreE C.2 Subsfibed Caoihl Slock {no ol shares. C.2.1 Conmon shares

10.0215

p|l vduo

Dar valu€ and tolal ualNP-\

095

60s

10.856

r0.677

18:

115

89.27!

82.378

58.773

700,001

700,000

330 000

700.00(

700.000

330.000

9.391

6.322

9391

6322

35.621

25245

24.@2

16.042

8 679

rc 2.1 - C 2.2 . C 2 3,

C.3 Paid-uo Caoilal Slock (C.3.1 +C.3.2) C,3.1 Common shar€s C.3.2 Pcfoned Shares C 4 AddfionalPaid-in CaDital/ CaDilal,n exc.ss oi DarvalJ6 / Paidri Sumlus C

1 36?

5 MinodlY Inleresl

C.6 Olhas. so€cdv {C.6.1 *C.62 +C.63 + C.6.4 + C.6.5) C 6.1 Rem€su€m€nls of net accrued tel|lement liabiliiv C.6,2 Cumulalive lranslalron adiuslmenl C.6.3 Equ(Y reserv6

,3 557 5 399

1.859

t726\

IU2

(36)

{38

t2 549

t804

859

c.64

c65 C.7 ADDraisal SurDluJRevaluation rncremem in Proo€rlv/Revalualiof SUD us C.6 Relain€d Earninos {C.8.1 + C.8.2) ,8.1 AoDioorialed .8.2 UnaoDroodated

C.9 Head / Home Offce kmunl lfor Forelon Branches onk) l0 Cosl ol Stocts H6ld rn T.€asurv rn6dltlv6 antrvl TOTAI. LIABILITIES AI{D EOUITY {B + CI

19369

23.821

22.050

3.15(

3.150

20.67i

18.900

r6.2r9

237.131

142,0,$

21{,30(

ContlolNo.:

ron rtpa:

i4iifri66

PECIAL FORII FOR FII{ANCIAL STATEiIETITS OF PUBLICLY-HELD AND II{VESTI'EMT COI,IPANIES

CORPoRATIOil: URREilT ADDRESST :!. flO,r 6rr'A17

pErRoENERoy REsouRcEs

AME OF

CI.IPA dra3a

YTYPE:

Derod

coRpoialtot| alip suBstptaRtEs

F|@r JIIT Euldlng, ,OB Av€nE, orlisa3 center, Pasig Ciry

f PS|C:

OIL EXPLoRATIOI{

cor6orra,a!6d

trenc,? stalsrDorls,

p,easo so

1193

hdicab in th. c.ption,

Tabls 2: Consolidated Slatomonb of lncome 2016

FINAI{CIAL DATA A.

{in t

REIEI{UE / rricoflE tA.l + A,2 + A.3) A.1 Nel Sales or Rew,rus / R€c€ipls lrom Op€rations (mnulactudng, 66rvices, elc,) lfron Primary Aclivilvl

m ning,utiliti€s,

tad€

A 2 Shar6 in lhe Prcfil or Loss of Associal€s and Joinl Venlur$ ecounted lor usino lhe

A.3 Ofier Rovenue 1A.3.1 *A.3.2 +A 3.3 A

A.34 +A

000 )

2014

2015 {

li t000

}

(lnt'000)

37,07(

23,tE4

25,874

33,630

23,543

25,874

1.130

241

2.31t

t729'

10.492

113

J I R€nlal

A.3.2 A 3.3 A.3.4 A.3.5

Income lrom Land and Bulldlnos Receiols lrom Sals of Merchandis€ ltrdinol lfrcm SecondaN Activilv)

R€l Estale or oher Pmoedv and EduiomeDl Rovallies, Franchise F€es, CoDyriqqls (boots. frhs. records. Sals of

Olt16rs, sp€cify (A 3.51

3 5 2

3 5 3

+A.3.5.4 +A

)

3 5 5 +

4.3.5.1 Renlal Incr'ns. Eouiomenl A.3 5.2 Share in net income ol a ioint r€nlure 4.3.5.3 A.3.5.4 A.3.5.5

A3.5.6 A.3.5.7

4.4 Othff In ome inon.oD€ralino) lA.4

1 + A.1.2 + A.4.3 + A.4

A 4.2 DMd€nd lncom€

(Lo$) fom sellin0 ol Ass€ts, sp€cify {A4 31 +A 4 3 2 +A 4 3 3 +A 4 3,1+A4 3 5 +A a 36 +A ! A4.3 1 Gainondisoosalolrnv6srn6nlandd6nvrtu6liaorllv 4.4.32

A 4.3 Gain /

10,761

(134)

1029t

10.761

t7u

10.297

tlm)

124

A.4.3.4

A.4.4 Gain / {1o3.) on Forshn Exdanqe lA 4.4 1 + A.4.4.2 + A.4 4.3 4.4.4.1 Nsl unr€aliz€d oain on flnancial asseb al FVPL

1€

-8.83i COST OF GOODS SOLDTB.I +

8.2+8.3r

8.1 CoslorGoods Manulaclur€d {8.1.1 ,B 1.2+B 13+B 8.1 .1

l4 +B l5)

Dir€d Mal€rial Us€d

8.1.2 Direct Labor B I 3 Olhff Manulaclurino Cosl / Ov€rnoad 8.1

4 Goods

in Process. Beonnino

8.1.5 Goods b Pmce$. End (nodrtlvr 6ntrv)

8.2 Finished Goods. Beoinnino 8.3 Finished Goods. End {nocdlv. entrv) cosT oF sALEs rc.l + c.2 + c.3r

19i 4(

A.4.4.3 Nsl qain on tor€ion €xcnanoo 4.4.4.4 Accrelion exoense

+ A 4.4

C.2 Mercnandise Inventofi, Beoinnino C.3 l\,brcnandiss Inv€ntory. End ln.crtlv. .nf!) cosT oF SERvlcEs. sPEclFY iD.l + 0.2 + D.3 + 0.4 + D.5 + D.6) 0.1

D2 D.3

0.4

Page 5

211

243

r179)

{94

n41

151

Contot No,:

tutnffie: SPECIAL FORiI FOR FINANC!{L STATEI'EITS OF PUBLICLY.HELD AND II{VESTMEI,II COMPANIES I.IAME OF

CORPORATIOil:

PEIROEITERGY RESOURCES CORPORATION AIIO SUSSIOIARIES

ADDRESST 7ih Fl@rJm TEL, ilO.t 6!t-291f COtlPrrl{Y TYPE: oll EXPLOMTION CURREIIT

lfthaso arc bat6d on contol

lad

finmci2l

Buildlng, ADsAv.nuo. Odgar Cei|.r, Paris Cny FAX

lio.: PSICI

1193

st./,e,,enl6, please so indicae in the czptjon.

Table 2: Con3olidated Statemenb of lncome F

INANC

OTHER DIRECT COSTS, SPECIFY

E.l Oil oroduclior o!€ratlno

2016

IAL DATA G.l

lh5so0)

+ E.2 + E.3 + E.4+ E,5 + EOI

€xD€ns€s

E.2 oeoletEn. deDreoarron and amorlzalim E 3 cosr ol 6lecticilv

F. GROSS PROFIT IA. B. C. D. E} G. OPERAIII'IG EXPENSES lG.1 + G.2 G.l Sellino or M.d€lino Eroenses

G.3 General ExDenses G.4 Olher E oenses. so€dtv lG4 1 +G4 2 +G4 3 +G4 4 +G4 G.4.1 Shale in nel bss ol. oinl ventlre G.4.2 Mis.ellrnoous exo6ns6 G.4.3 Research cosls G.4 4

5-G4

000 )

13.031

12.603

3 705

4.239 I 682 T.113

5.132

12.244

G.2 Adminislralivg Exo€nsss

2014 (in t

18.700

2.195

+ G.3 + G.4)

2015 Iinr000)

1.406 6 065

18.37(

10.021

23.763

3.211

3.911

3.520

3.211

1.911

3.277

243 243

G.4.5

[

J. L.

G4.6 F[{AilCE COSTS

COIIE {LOSS} EEFORE TAX { F . G . H) lNCOlllE TAX EXPEIISE {neoatlve entrv) Amount of {i} Port T5I Potil or Lo8! of Dilcontinu€d OpoRtion!; and {ll} Po3t-Trx Galn or Lo$ R€cogntzed on tieite.6urenent of Fak V.tue le.3 Cosl to S€ll or on th8 Di3po3!l of the &E€t! or Oilpo3al crcup(B) con.tltutlnd th. Dllcontlnued ODerrtlon lff .nvl ilET

9.077

{,933

4,524

6.076

1.177

15,720

.218

3.it33

15.9691

2,5E0

8,489

1.1 NCI sham in nel loss 1.2

lr. N.

Profit or Lo!5 ftnbuhble lo Mnodlv lnt€r€8t PrcfIt or Lo3! Altributablo to Equilv Holdor ol

1.252

d08a

tie P.rsnt

Page 6

1,173

. SPECIAL FORI IOR FIMIIC T STATEXCNIS OF PUBUCLY.flELO TXO h'VESTXENT COXPANIES

fufusekr4'Dglw{'ods|d,hd'c

FdnIyN, SPECIAI FORII FOR FII|AI{CIAL STATEXEI{Ts OF PUSI.ICLY.HEID AND IIIVESTIIEIII

NAUEOFCORPORATIOX:

PEIRoENERGY RESoI,RCES coRPoRATIoII AND SI,BSII]IARIES

CURREIT AODRESgI

7lh

TEL

NO,:

Fld J{r

BuUliC, ADB Averu.,oniq$ Cer

s, PBiq

City

PSIC:

COIIPAI'YTYPE: OILEXPIORATbII

olo

b.!.d

cmroi/ot|l€d

lrfrcid th|€nqtt, pl.w .o ia.rinl€ in lr..t/ion, T.bl. 3. Comolldrl€d Stltdn€ntt of

FINAI{CIAL DATA

let C$h Pdided

P@€ds

fiw ele

by (Uted In]

o@dv. lbnt

0!.6lins Acliviii6 l&m

(nt

CO PAI{IEs

FAI IO,:

d37.2C17

CFFS

dbo6

and

OF FOREIGII EXCIIAIIGE RATE CHANGES III CASH ANO CASH EQUIVALEI{TS IIICREASE III CASH AIID CASH EqUVALENI6 IA + B + C)

Ca3h Florvg

1193

2006)