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 been awarded with a Letter of Award from ConocoPhillips Sarawak Limited and ConocoPhillips Sarawak Oil Limited (collectively be referred as “ConocoPhillips”), for a Contract for the provision of jack-up rig services, the approval of which was received (“Contract”).
The Contract is for a jack-up rig named NAGA 7 with an estimated contract value of USD8 million.
Details of the Contract is summarised below:
2.1 Provision of Jack-Up Drilling Rig “NAGA 7”
The Contract is for the provision of a jack-up drilling rig to undertake drilling services for ConocoPhillips, and VEB Group will assign its NAGA 7 for this Contract.
The Contract is to drill up to 3 wells with the tentative commencement sometime in the first half of 2021.
NAGA 7 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 375 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 ConocoPhillips
ConocoPhillips’ office is located at Level 58, Tower 2, PETRONAS Twin Towers, Kuala Lumpur City Centre, 50088 Kuala Lumpur. The principal activity of ConocoPhillips is the exploration of hydrocarbons.
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 period 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.
In accordance with the terms of the Contract, VEB has received approval from ConocoPhillips on the content and the release of this announcement.
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 Contract herein is in the best interest of VEB Group.