Two energy listed firms, Basic Energy Corp. and Trans Asia Oil and Energy Development Corp., have sealed an agreement to jointly explore and develop the geothermal service contracts (GSCs) the Department of Energy earlier granted to Basic.
In a memorandum of agreement, Trans Asia acquired a 10-percent stake in Basic’s Mabini GSC located in Mabini, Batangas, giving Trans Asia the option to boost its stake in Mabini to up to 40 percent.
The agreement further gives Trans Asia the option within six months to acquire up to 60 percent of Basic’s other GSCs in Mariveles Bataan, East Mankayan in Benguet, West Bulusan in Sorsogon and Mount Iriga in Camarines Sur.
“We welcome Trans Asia’s intention to potentially become our major partner in the development of Basic’s various GSCs. We will work for a resultant synergy to more quickly develop the geothermal power requirements of our growing economy,” Basic Chief Executive Officer Oscar de Venecia Jr. said.
De Venecia said that he hopes the entry of Trans Asia would result in significant income streams for both of the companies and other partners who may want to join the consortium.
Both Basic and Trans Asia also agreed on the sharing costs for the drilling of exploratory wells for the Mabini project. The GSC calls for the first exploratory well to be drilled by July 2015.
For Mabini, Trans Asia will have the right to be first in negotiating a purchase accord with the consortium for all the electricity output to be generated by the project, at commercially-competitive rates.