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 on 1 November 2023, mutually agreed for the extension of the Contract with Carigali Hess Operating Company Sdn Bhd (“Carigali Hess”) for another 1 year and 6 months (18 months), commencing from 19 April 2024 until 18 October 2025, subject to any further extension as may be mutually agreed upon between VED and Carigali Hess (“Extension”).
VEB Group will continue to assign NAGA 8 for the extension period of the Contract, with an estimated contract value of USD74 million.
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 extension of the Contract is expected to contribute positively towards the earnings and net assets of VEB Group during the period of the Extension 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.
The contents for this Announcement is 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. 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 Extension of the Contract is in the best interests of VEB Group.