Basic Energy Corp. on Friday said it is withdrawing from three geothermal and natural gas exploration projects.
In a disclosure, the listed energy company said it notified the Department of Energy (DoE) of its intention to back out of its service contracts in Mabini, Batangas and Mariveles, Bataan. These contracts were for the exploration and development of geothermal energy in those locations.
The company provided different reasons in choosing to pull out of the contracts. For the Mabini service contract, which was first awarded to the company in 2008, the DoE extended its term for the project until 2021, provided that Basic Energy drills two geothermal wells during the extended period.
But the company said the cost of drilling the two wells would go beyond its contractual commitments. It added, “…vis-a-vis the low potential return for this project and the long gestation period thereof, the company was constrained to withdraw from this project.”
For the Mariveles project, Basic Energy has a pending request with the DoE to reconsider its termination of the company’s service contract. To recall, the DoE terminated Basic Energy’s contract in February 2018 due to the company’s difficulties in getting permits from related agencies and host communities.
The company now wants to withdraw its request for reconsideration, saying a review of a study on the project implies it “does not fully support a viable geothermal resource.”
“The withdrawal of the request for reconsideration of the earlier termination of this service contract will thus put into immediate effect the termination of the service contract,” it said.
