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Trans-Asia, Basic Energy ink deal

/ 12:13 AM December 05, 2013

Trans-Asia Oil and Energy Development Corp. seems set to be a major partner of Basic Energy Corp. on geothermal power projects.

The two companies separately told the Philippine Stock Exchange that they had signed an agreement to jointly explore and develop areas covered by geothermal service contracts (GSCs) awarded to Basic by the Department of Energy.

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Under the deal, Trans-Asia acquired a 10- percent stake in Basic’s Mabini GSC in Batangas province with the option to boost this stake to as much as 40 percent. Trans-Asia may also choose, within six months after signing the agreement, to acquire up to 60 percent of Basic’s other GSCs in Mariveles, Bataan; East Mankayan, Benguet; West Bulusan, Sorsogon, and Mt. Iriga, Camarines Sur.

The partners said Basic CEO Oscar L. de Venecia Jr. and Trans-Asia CEO Francisco L. Viray signed the agreement on Dec. 3.

Basic expressed confidence that the agreement would pave the way to a “mutually profitable” partnership in geothermal energy.

“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,” De Venecia said in a statement.

De Venecia said the agreement could give Trans-Asia major participation in Basic’s GSCs that would allow it to have the first call in purchasing the power to be generated by the Mabini GSC.

“This will hopefully result in significant income streams for both our companies and other partners who may join our consortium, as we go through the development of the Mabini geothermal steam fields and then to power generation and supply,” De Venecia said.

Under the terms of the MOA, Trans-Asia will fund the onshore gravity program for the Mabini GSC and, upon its completion, elect its final participating interest in the project of up to a 40-percent stake.

Both Basic and Trans-Asia also agreed to share the cost of the drilling of exploratory wells for the Mabini project. The GSC calls for the first exploratory well to be drilled by July 2015.

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TAGS: basic energy corp., Business, energy sector, partnership, Trans-Asia Oil and Energy Development Corp.
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