Coastal is pleased to announce that its wholly-owned subsidiary, Thaumas Marine Ltd has secured a charter contract for a Jack-up Gas Compression Service Unit (“Jack-up”) for an aggregate value of approximately RM1.24 billion from a group of Mexican companies, which in turn has entered into a gas compression service contract with Petroleos Mexicanos (“Pemex”), the Mexican state-owned petroleum company.
The construction work will be started immediately and expected to complete in first half of 2015.
INFORMATION ON THE CONTRACT
The charter contract is for a period of eight years with extension option up to twelve years. The charter contract is expected to commence by second half of 2015.
The charter contract valued at approximately RM1.24 billion is expected to contribute positively to the revenue stream, earnings and net assets of Coastal Group for the financial year ending 31 December 2015 and the financial periods thereafter for the duration of the charter contract.
RISK ASSOCIATED WITH THE CONTRACT
The risks associated with the contract are mainly the normal business risks for an oil and gas company. Notwithstanding this, the Company has put in place adequate risk management procedures and processes in mitigating these risks.
DIRECTORS AND MAJOR SHAREHOLDERS’ INTEREST
None of the directors and/or substantial shareholders of the Company and persons connected with them have any interest, direct or indirect, in the above transactions.
The Board of Directors of the Company is of the opinion that the acceptance of the contract is in the best interest of the Company.
The announcement is dated 10 February 2014.