PT BASIC Energi Solusi (PT Basic), a unit of listed Basic Energy Corp., has begun works on two wells in Indonesia in a bid to draw more oil within the resource area.

PT Basic is a subsidiary of Hong Kong-based Grandway Group Ltd. — which is a 70-30 joint venture between Basic Energy and Malaysian firm, Petrosolve Sdn. Bhd.

Basic Energy, in a disclosure on Wednesday, said it “has spud-in its fourth well and fifth well,” which marks the start of drilling activity for these wells.

“Preparations are also underway for the spud-in of its sixth well,” Basic Energy said.

The company has so far drilled three out of 10 wells planned in the area.

“[W]ith regard to earlier drilled wells, the first well has reached its target depth though encountered complications and cannot be immediately produced,” Basic Energy said.

The company said, however, that good oil saturation is still expected at several layers of the well.

Meanwhile, the second and third wells are still undergoing drilling and testing.

“Further studies are to be done to optimize oil recovery prior to the construction of production facilities and going into the production phase,” Basic Energy said.

Basic Energy President and Chief Executive Officer Oscar L. de Venecia, Jr. said earlier all these activities are intended to produce oil from the resource area.

PT Basic — which has the right to manage 10 oil wells in Central Java in Indonesia — was incorporated to provide consultancy, management and supervision services in the management of oil wells.

Petrosolve, a firm registered in Malaysia, is engaged in the business of oil field services including application of chemicals for increased oil production and the development of oil and gas fields and wells.

Basic Energy and its subsidiary, Southwest Resources, Inc., are involved in various oil exploration activities. It currently holds minority stakes in service contract (SC) 47 and SC 53, located offshore and onshore Mindoro province, respectively, as well as SC 41 in the Sulu Sea.

The company, through its subsidiaries, is also involved in the production of ethanol and other biofuels; development of geothermal renewable energy resources; and development and production of farm products.

The company trimmed its net loss to P5.643 million as of end-March.

Revenue grew 27.28% to P5.976 million, while expenses jumped 28.1% to P11.619 million.

Basic Energy shares closed at 30 centavos apiece on Wednesday, up by 1.5 centavos or 5.26% from Tuesday.

Source: http://www.bworldonline.com/content.php?section=Corporate&title=Basic-Energy-unit-starts-work-on-two-Indonesia-wells&id=90634