Basic Energy Corp. is set to start drilling a geothermal well in Batangas province in the first half, a company official said.
“Target spud date for Mabini is first week of May,” Basic Energy senior vice president Anthony Cuaycong said.
He said the Mabini geothermal project drilling in Mabini, Batangas would account for the bulk of the company’s capital expenditure this year.
“Cost of drilling for first well [inclusive of right of way and access road] is pegged at P300 million, of which 75 percent will be shouldered by Basic,” Cuaycong said.
Basic Energy and partner Trans-Asia Oil and Energy Development Corp. signed a joint operating agreement for the Mabini geothermal power project in November.
The move followed the approval by the Energy Department of the deed of assignment for the Mabini geothermal service contract number 8 of Basic Energy to Trans-Asia.
Basic Energy now owns 75 percent of the service contract, while Trans-Asia holds the remaining 25 percent.
The approved arrangement calls for a 75-25 equity and project cost participation between Basic Energy and Trans-Asia.
Under the terms of the agreement, Trans-Asia will shoulder 25-percent undivided participating interest in the rights, interests, privileges, duties and obligations in and under geothermal service contract 8.
Trans-Asia decided to share in the cost of the first exploration well committed under sub-phase 3 of the geothermal service contract, after undertaking due diligence on the project, including geophysical work.
This validated previous prospective estimates that the project could generate between 20 megawatts and 60 MW of energy.
Basic Energy was originally incorporated as Basic Enterprises Inc. on Sept. 19, 1968 and became an oil and gas exploration and development company on April 26, 1971, when it assumed the name Basic Petroleum and Minerals Inc.
The company evolved from an operating company to a holding company under the corporate name Basic Consolidated Inc. It adopted the present corporate name in 2007 when it engaged in the production of ethanol and other biofuels and the development of other alternative and renewable energy sources.