Velesto Receives Letter of Award for the Provision of Jack-Up Drilling Rig

Source: www.gulfoilandgas.com 10/1/2021, Location: Asia

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 Letter of Award from PETRONAS Carigali Sdn. Bhd. (“PCSB”), for the provision of jack-up drilling rig services (“Contract”).

The Contract is for the provision of services of jack-up rig, namely NAGA 2, with an estimated Contract value of USD12.4 million.

Details of the Contract is summarised below:

2. DETAILS

2.1 Provision of Jack-Up Drilling Rig “NAGA 2”

For the provision of drilling rig services for PCSB’s drilling programme, VEB Group assigns its NAGA 2 to drill five (5) firm wells, with the extension option of one (1) plus one (1) well, with an expected commencement date of between 1 December 2021 to 31 December 2021.

NAGA 2 is a 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.

3. INFORMATION ON PARTIES

3.1 Information on Velesto Drilling Sdn. Bhd.

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 PCSB

PCSB, a wholly-owned subsidiary of Petroliam Nasional Berhad (PETRONAS), is a leading exploration and production (“E&P”) company taking on increasingly challenging projects to bring new oil and gas supplies to the market. PCSB was incorporated in Malaysia under the Companies Act, 1965 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 the exploration, development and production of oil and gas.

4. FINANCIAL EFFECTS

The provision of the above-mentioned services is expected to contribute to the earnings and net assets of VEB Group during the contract period for the financial period ending 31 December 2021.

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. 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 Contract.

7. STATEMENT BY DIRECTORS

The Board of Directors of VEB is of the opinion that the acceptance of the Contract is in the best interest of VEB Group.


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