Reference is made to the announcements dated 5 November 2019 in relation to the Contract, and extension thereof announced on 27 November 2023. The words defined herein follows the definition in our announcement dated 5 November 2019.
1. INTRODUCTION
The Board of Directors of Velesto Energy Berhad (“VEB”) wishes to inform 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 on 27 November 2024, received a notification from Carigali Hess Operating Company Sdn Bhd (“Carigali Hess”) on the suspension of the Contract with Carigali Hess, commencing from 10 February 2025 or upon completion of the Contract demobilization, whichever is later, until further notice in writing is given by Carigali Hess to VED.
2. DETAILS
With the above notification, the assignment of NAGA 8 for the performance of the Contract is suspended during the suspended period.
NAGA 8 is a premium independent-leg cantilever jack-up rig that has a drilling depth capability of 30,000 feet and has a rated operating water depth of 400 feet.
3. INFORMATION ON PARTIES
3.1 Information on VED
VED was incorporated in Malaysia under the Companies Act, 1965 on 29 July 2003 and is deemed to be registered under the Companies Act 2016. 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 Carigali Hess
Carigali Hess is a joint venture Oil and Gas company between PC JDA Limited, Hess Oil Company of Thailand Ltd. Co. and Hess Oil Company of Thailand (JDA) Ltd. Carigali Hess based in Kuala Lumpur, is engaged in gas production in Block A-18 of the Joint Development Area administered by the Malaysian-Thailand Joint Authority (MTJA).
4. FINANCIAL EFFECTS
The suspension of the Contract, is expected to suspend the remaining order book under this Contract.
5. RISK ASSOCIATED WITH THE SUSPENSION
The aforesaid suspension of the Contract, could potentially have negative impact due to lower utilization in 2025, which would be mitigated and/or managed by VED, a company with a proven successful track record of undertaking drilling programme.
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 today, from Carigali Hess.
7. STATEMENT BY DIRECTORS
The Board of Directors of VEB wishes to inform that ongoing efforts are underway to explore opportunities for Naga 8’s next campaign.
This announcement is dated 29 November 2024.