Basic Energy Corp. (formerly Basic Petroleum Corp.) is eyeing drilling prospects on two oil and gas areas in Indonesia.

Based on documents filed with the Securities and Exchange Commission, Basic Energy said the areas being reviewed include one secondary recovery candidate and another under exploratory phase.

Basic Energy is currently a participant in Service Contracts (SC) 41, 47 and 53. It plans to continue exploration efforts with the consortia involved in these contract areas after the farm-in obligations are delivered.

The company is an indirect recipient of the Galoc field production resulting from a purchase agreement signed with Forum Energy Philippines. Under the agreement, Forum will remit 75 percent to Basic the historical cost recovery accounts of SC 14. The Galoc consortium will be realizing gains from historical cost recovery in the next 12 to 24 months.

In addition, Basic Energy is planning to go into geothermal energy development in partnership with other entities. “The company is discussing with other companies interested in the exploration and development of geothermal resources. A consortium is being considered. The plan is for the consortium to jointly undertake exploration and development activities at the Mabini geothermal areas and the other areas of the members,” Basic Energy said.

To fund its oil exploration activities and planned acquisitions, Basic Energy is planning a follow-on offering of 5.5 billion new common shares to raise around P2 billion.

BDO Capital & Investment Corp. has been tapped as lead underwriter for the issue.

Other proceeds from the offering will be used by the company to fund its expansion into biofuels and other alternative and renewable energies and mineral resources industries.

The company’s decision to venture into bioethanol is in line with implementation of the Biofuels Act of 2006, which mandates a five percent bioethanol blending into gasoline.

The ethanol project is seen to yield 200,000 liters of ethanol upon full operations in 2009.

Demand for bioethanol is expected to increase to over 500 million liters per day by 2011 with a mandated 10-percent blend.

Basic Energy was transformed into a holding company with bioethanol producer Zambo Norte Bioenergy Corp. as one of its subsidiaries.

Source: http://www.philstar.com/business/46651/basic-energy-eyes-oil-gas-areas-indonesia