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 (collectively be referred as “VEB Group”), has received a Letter of Award from Sarawak Shell Berhad / Sabah Shell Petroleum Company Limited ("SSB/SSPC") for a contract for the Provision of Jack-Up Drilling Rig Services for Sarawak Shell Berhad / Sabah Shell Petroleum Company Limited for the provision of a jack-up rig services, the approval of which was received today (“Contract”).
The Contract is for VEB’s jack-up rig, namely NAGA 4, with an estimated contract value of USD17.68 million.
Details of the Contract is summarized below:
2.1 Provision of Jack-Up Drilling Rig “NAGA 4”
The VEB Group will assign its NAGA 4 for this Contract. The Contract is to drill seven (7) firm wells with expected commencement date between 15 August 2021 to 15 October 2021.
NAGA 4 is a premium independent-leg cantilever jack-up drilling 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 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 SSB/SSPC
SSB/SSPC provides oil and gas exploration and production services. SSB is based in Miri, Malaysia and SSPC is based in Kota Kinabalu, Malaysia. Both SSB/SSPC operates as a subsidiary of Royal Dutch Shell PLC.
4. FINANCIAL EFFECTS
The provision of the above mentioned services is expected to contribute positively to the earnings and net assets of VEB Group during the contract period for the financial year ending 31 December 2021.
5. RISK ASSOCIATED WITH THE CONTRACTS
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. 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.
7. STATEMENT BY DIRECTORS
The Board of Directors of VEB is of the opinion that the acceptance of the Contract herein is in the best interest of VEB Group.