Basic Energy secures funding partner for Iriga project, Philippines
Basic Energy Corp. has secured a farm-in agreement essentially selling a 80% participating interest in the Iriga geothermal project in southern Luzon, Philippines.
Reported from the Philippines earlier this week, Basic Energy Corp. has announced that it signed a farm-in agreement allowing Desco Inc. to acquire an 80-percent participating interest in the Iriga geothermal power project.
Basic Energy said in a disclosure to the stock exchange Desco would bear the entire expenditure for the geophysical survey and all other activities required to bring the Iriga geothermal service contract to drilling.
“Notwithstanding approval from DoE, Desco shall commence the geophysical activities in February 2016 and shall endeavour to complete the survey in accordance with the work program,” it said.
Desco shall also fund the entire drilling cost for the first well, with Basic fully carried in the first well. Desco is a local drilling firm engaged mostly in servicing the geothermal, oil and gas industries.
The agreement also stipulates that the cost of drilling the second well and succeeding wells and the cost of production facility shall be divided pro rata between Basic and Desco at 20 percent and 80 percent, respectively.
The Iriga geothermal service contract was awarded by the Energy Department to Basic Energy on Feb. 26, 2013. The project is located near the Iriga/ Asog volcano in southern Luzon.
The Iriga, Camarines Sur geothermal area is bounded in the north by the Isarog geothermal block of PNOC Renewables Corp. and to the east by the highly productive Tiwi geothermal service contract, owned by AP Renewables Inc.