by Lenie Lectura – January 18, 2016
from Business Mirror
OIL and gas exploration firm Basic Energy Corp. (BEC) has formalized its partnership with Desco Inc. for the sale of the former’s 80-percent stake in a geothermal service contract (GSC).
In a disclosure to the stock exchange Monday, Basic Energy said it signed a farm-in agreement and deed of assignment with Desco “to acquire from Basic 80 percent undivided participating interest in the rights, interests, privileges, duties and obligations in and under the Iriga Geothermal Project, subject to the approval of the Department of Energy [DOE].”
Under the agreement, Desco shall fully shoulder the cost for the geographical survey and all other activities required to bring the Iriga GSC to drilling. Desco is targeting to commence the geophysical activities next month.
Also, Desco will cover 100 percent of the cost to drill the first well. For the succeeding wells, the agreement states that the cost, including the construction of a production facility, shall be shared pro rate between Basic Energy and Desco with 80 percent paid by Desco and 20 percent by Basic.
The DOE awarded the service contract to BEC on February 26, 2013.
The project is located in the Iriga, Camarines Sur geothermal area. It is bounded on 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. (formerly Chevron).
Desco is a provider of integrated solutions and value-added products and services in the energy sector and is engaged mostly in servicing the geothermal and oil and gas industries.