1. INTRODUCTION
The Board of Directors of Velesto Energy Berhad (“VEB”) is pleased to announce that Velesto Drilling Sdn. Bhd. (“VED”), a wholly-owned subsidiary of Velesto Malaysian Ventures Sdn. Bhd., which in turn is a wholly-owned subsidiary of VEB, has received a copy each of Notice of Assignment (“NOA”) for NAGA 2, NAGA 4 and NAGA 6 from PETRONAS Carigali Sdn. Bhd. (“PCSB”) for two (2) years, commencing from 7 February 2024 until 6 February 2026, inclusive of the continuation from the current drilling campaign as per Notice of Assignment dated 11 January 2024, 7 March 2023 and 2 June 2023, for a total contract value of USD73,040,600, USD94,883,800 and USD97,077,800 respectively.
VED had also on 2 February 2024 received a copy of Letter of Contract Extension (“Extension Letter”) from PCSB which extends the term of the Contract for two (2) years, commencing from 7 February 2024 until 6 February 2026.
2. DETAILS
Information on Velesto NAGA 2, 4 and 6 are as follows:
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RIGS
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DETAILS OF RIGS
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VELESTO NAGA 2
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Premium independent-leg cantilever jack-up rig with drilling depth capability of 30,000 feet and has a rated operating water depth of 350 feet.
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VELESTO NAGA 4
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Premium independent-leg cantilever jack-up drilling rig with drilling depth capability of 30,000 feet and has a rated operating water depth of 400 feet.
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VELESTO NAGA 6
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Premium independent-leg cantilever jack-up rig with drilling depth capability of 30,000 feet and has a rated operating water depth of 375 feet.
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2. INFORMATION ON PARTIES
3.1 Information on VED
VED, a company incorporated in Malaysia under the laws of Malaysia on 29 July 2003 and has its registered office at Level 18, Block 3A, Plaza Sentral, Jalan Stesen Sentral 5, 50470 Kuala Lumpur. VED is principally involved in the offshore drilling business and operations and other engineering services for oil and gas exploration, development and production in Malaysia and overseas.
3.2 Information on PCSB
PCSB, a wholly-owned subsidiary of Petroliam Nasional Berhad (“PETRONAS”) and a company incorporated in Malaysia under the laws of Malaysia on 11 May 1978 and has its registered office at Tower 1, Petronas Twin Towers, Kuala Lumpur City Centre, 50088 Kuala Lumpur, Malaysia. The principal activities of PCSB are exploration, development and production of oil and gas.
4. FINANCIAL EFFECTS
The Contracts for NAGA 2, NAGA 4 and NAGA 6 are expected to contribute positively towards the earnings and net assets of VEB Group during the period of the Contract.
5. RISK ASSOCIATED WITH THE CONTRACT
The risks associated with the execution of the Contract are operational and execution risks, which will be mitigated and/or managed by VED, a company with a proven successful track record of undertaking drilling programmes.
6. CONFIDENTIALITY
The contents for this Announcement are in accordance with the terms of the Contract, which the Company has received the approval for the release of Announcement on 22 March 2024, from PCSB.
7. DIRECTORS AND SUBSTANTIAL SHAREHOLDERS INTEREST
None of the Directors and/or the substantial shareholders of VEB and/or persons connected with the Directors and/or substantial shareholders have any interest, direct or indirect in the above Contract.
8. STATEMENT BY DIRECTORS
The Board of Directors of VEB is of the opinion that the acceptance of the NOA and Extension Letter in respect of the Contract are in the best interests of VEB Group.
The Contract's extension highlights strong utilization of VEB’s rigs for 2024. It also indicates the potential for robust financial performance in the coming years, with an order book extending to 2025 and 2026. The extension also underscores our unwavering commitment to safety and service excellence, which the Group consistently delivers across all projects.
This announcement is dated 22 March 2024.