The Basic Energy Corp (BEC) has sealed its farm-in deal with Desco Inc for the development of its Iriga geothermal project. Desco is a local service provider for the geothermal, oil and gas companies.

BEC disclosed on Monday the agreement was signed to acquire from BEC 80 per cent undivided participating interest in the rights, interest, privileges, duties, and obligations in and under the Iriga geothermal project, subject to the approval of the Department of Energy (DOE).

“Desco shall bear 100 per cent of the expenditure for the geophysical survey and all other activities required to bring the Iriga GSC to drilling. Notwithstanding approval from DOE, Desco shall commence the geophysical activities in February 2016 and shall endeavor to complete the survey in accordance with the work program for the Iriga GSC, as approved by DOE,” Desco said in its statement.

With BEC fully carried to the first well, Desco shall also cover 100 per cent of the cost to drill it.

Also within the agreement, the cost of drilling the second well and succeeding wells thereafter, and the cost for construction of a production facility shall be shared pro rata between BEC and Desco with the former paying 20 per cent, and the latter by 80 per cent.

DOE awarded the Iriga geothermal service contract to BEC in February 26, 2013.

The Iriga, Camarines Sur geothermal area is bounded in the north by the Isarog geothermal block of PNOC-RC and to the east by the highly productive Tiwi Geothermal srvice contract of formerly Chevron, now AP Renewables Inc. The areal landscape is dominated by Iriga or Asog Volcano, relatively in stratovolcano immediately southwest of Lake Buhi in Southern Luzon.

Source: http://www.dealstreetasia.com/stories/ph-dealbook-governments-psalm-eyes-buyout-for-hydro-plants-bec-desco-ink-partnership-27503/