Basic Energy farms in contract for Camarines Sur geothermal project

MANILA, Philippines – Basic Energy Corp. has firmed up its partnership with Desco Inc. to commence drilling of its geothermal project in Camarines Sur next month.

In a disclosure to the Philippine Stock Exchange, Basic Energy said it signed a farm-in agreement and deed of assignment with Desco.

The deal allows Desco to acquire 80 percent of participating interest in the Iriga geothermal project, subject to Department of Energy (DOE) approval.

Desco will shoulder the cost of drilling for the first well.

“Under the farm-in agreement and deed of assignment, Desco shall bear 100 percent of the expenditure for the geophysical survey and all other activities required to bring the Iriga GSC (geothermal service contract) to drilling,” the firm said.

“Notwithstanding approval from DOE, Desco shall commence the geophysical activities in February 2016 and shall endeavor to complete the survey in accordance with the work program for the Iriga GSC,” it added.

For the succeeding wells and the construction of a production facility, Basic Energy said the cost will be shared pro rata by the partners.

Basic Energy said Desco will undertake a geophysical survey and all other steps to start drilling.

The Iriga GSC, awarded by the DOE on Feb. 26, 2013, bounded in the north by the Isarog geothermal block of PNOC-RC and to the east by the highly productive Tiwi geothermal service contract of AP Renewables Inc.

It is dominated by Mount Asog, a strato-volcano immediately southwest of Lake Buhi in Southern Luzon.

Apart from the Camarines Sur project, it has two more geothermal projects, located in East Mankayan, Benguet and Mariveles, Bataan.

Basic Energy is into oil and gas exploration through wholly-owned subsidiaries like Basic Diversified Industrial Holdings Inc. and iBasic Inc. It also owns 72.58 percent of Southwest Resources Inc., an oil exploration company.