Basic Energy Corp. withdraws from two geothermal contracts in the Philippines
Basic Energy Corp. has announced the withdrawal from two geothermal services contracts in the Philippines, according to an announcement to the Philippines Stock Exchange.
Basic Energy Corporation submitted today to the Department of Energy (DOE) its notice to withdraw from the Mabini Geothermal Service Contract No. 8. Last year, the DOE extended the service contract term for this project up to 2021, provided, among others, the Company commits to drill two (2) wells during the extension period. Considering, however, that the budget for these two (2) wells goes beyond the contractual commitments of the Company under the service contract, vis-a-vis the low potential return for this project and the long gestation period thereof, the Company was constrained to withdraw from this project.
The Company has likewise submitted its notice to the DOE to withdraw from the Mariveles Geothermal Service Contract No. 2013-02-042. The DOE has terminated this service contract last February 26, 2018, amidst difficulties of the Company in securing permits from the NCIP, the LGUs involved and the host communities. The Company requested for a reconsideration of the termination, which is now being withdrawn considering that a review of the CSMT studies does not fully support a viable geothermal resource. The withdrawal of the request for reconsideration of the earlier termination of this service contract will thus put into immediate effect the termination of the service contract.
Further, the Company has advised that it has withdrawn from a natural gas exploration project.