OIL-and-gas exploration firm Basic Energy Corp. (BEC) has sought the go-ahead of the Department of Energy (DOE) for it to unload 80 percent of its stake in a geothermal service contract (GSC) to Desco Inc.

“Basic Energy recently received the approval of the Department of Energy on the farm-in agreement and deed of assignment with Desco Inc. to acquire from Basic 80-percent undivided participating interest in the rights, privilege, duties and obligations in and under the Iriga geothermal project,” it said. 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.

Also, Desco will cover 100 percent of the cost to drill the first well. For the succeeding wells, the agreement states 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 farm-in agreement will vest the operatorship of the project to Desco and will reduce the share of Basic in the exploration costs, which shall be limited, corresponding to its 20-percent participating interest. Further, with the approval of the assignment to Desco, the consortium will now be able to jointly meet the work program commitment submitted to the DOE based on agreed participating interest,” Basic Energy said. 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 Philippine National Oil Co.-Renewables Corp. 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.

source: http://www.businessmirror.com.ph/basic-energy-seeks-doe-okay-to-unload-80-holding-in-desco/