Basic Energy partners with Desco for Iriga geothermal project

MANILA, Philippines - The Department of Energy (DOE) has given its go-signal for Basic Energy Corp. and Desco Inc. to team up for a geothermal project in Camarines Sur.

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

Basic Energy and Desco have forged a partnership in December 2015.

The partnership calls for Desco acquiring an 80 percent participating interest in the rights, interest, privileges, duties and obligations of Basic Energy in the Iriga Geothermal Service Contract (GSC) in Camarines Sur.

With the approval of the farm-in agreement, Desco will become the operator of the project and reduce Basic Energy’s share in the exploration costs to 20 percent.

“Furthermore, with the approval of the assignment to Desco, the consortium Desco and Basic will now be able jointly to meet the work program commitment submitted with the Department of Energy based on the agreed participating interests,” Basic Energy said.

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 to drilling.

The cost for the drilling of the first well will be 100 percent covered by Desco.

For the succeeding wells, the construction and production facility costs will be covered by both Basic Energy and Desco based on their participating interest in the project.

The DOE awarded the service contract to Basic Energy for the Iriga project on Feb. 26, 2013.

The Iriga, Camarines Sur geothermal area is 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, Basic Energy 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 Basic Diversified Industrial Holdings Inc. and iBasic Inc. It also owns 72.58 percent of Southwest Resources Inc., an oil exploration company.