INTRODUCTION

The Board of Directors of SapuraKencana Petroleum Berhad (“SapuraKencana” or “Company”) (“Board”) is pleased to announce that its wholly-owned drilling subsidiaries have been awarded one new contract (“Contract”) and three contract extensions (“Contract Extensions”).

INFORMATION ON THE CONTRACT AND CONTRACT EXTENSIONS

(A) Award of Contract

SapuraKencana Drilling Pte Ltd, a company incorporated in Singapore and wholly-owned by SapuraKencana, has been awarded the Contract by Total E&P Congo, Republic of Congo (“Total Congo”) for the provision of its Semi-Tender Assist Drilling Rig “SKD Berani” for a period of one year with an option for an extension of one year.  Total Congo intends to utilise SKD Berani for its workover and development drilling campaign offshore Republic of Congo.

The Contract will commence in April 2014 until March 2015 and is valued at approximately United States Dollar One Hundred and Eight Million (USD108,000,000).

(B) Contract Extensions

(i) SapuraKencana Drilling Sdn Bhd, a company incorporated in Brunei and wholly-owned by SapuraKencana, has accepted an extension to its contract with Brunei Shell Petroleum Company Sdn Bhd (“Brunei Shell”) for the provision of offshore drilling rig and services by its Semi-Tender Assist Drilling Rig “SKD Pelaut” (“Contract Extension 1”).  Brunei Shell will continue to utilise SKD Pelaut for its development drilling campaign offshore Brunei.

 Contract Extension 1 is for a period of two years commencing April 2015 until March 2017 and is valued at approximately United States Dollars Ninety Two Million (USD92,000,000).

(ii) SapuraKencana Drilling Asia Limited, a company incorporated in Hong Kong and wholly-owned by SapuraKencana (“SKD Asia”), has accepted an extension to its contract  with Cabinda Gulf Oil Company Limited (“CABGOC”) for the provision of Tender Assist Drilling Rig “SKD Setia” (“Contract Extension 2”).  CABGOC will continue to utilise SKD Setia for its development drilling campaign offshore Cabinda, Republic of Angola.

Contract Extension 2 is for a period of two years commencing August 2014 until July 2016 and is expected to increase the total contract value by approximately United States Dollar One Hundred and Sixty Four Million (USD164,000,000).

(iii) SKD Asia has also accepted an extension to its contract with Chevron Thailand Exploration and Production Limited (“Chevron Thailand”) for the provision of the Tender Assist Drilling Rig “SKD T-12” (“Contract Extension 3”).  Chevron Thailand will continue to utilise SKD T-12 for its development drilling campaign in the Gulf of Thailand.

Contract Extension 3 is for a period of two years commencing March 2014 until end of March 2016 and is expected to increase the total contract value by approximately United States Dollar Ninety Million (USD90,000,000).

RISK FACTORS

Risk factors affecting the Contract and Contract Extensions include execution risks such as availability of skilled manpower and materials, changes in pricing and/or political, economic and regulatory conditions.  Notwithstanding, the Company has established a successful track record undertaking similar projects.

FINANCIAL EFFECTS
 
The Contract and Contract Extensions will have no effect on the issued and paid-up share capital of the Company and are expected to contribute positively towards the earnings of SapuraKencana Group for the financial year ending 31 January 2015 and the financial periods thereafter during the Contract and Contract Extensions periods.

DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTEREST

None of the Directors and/or major shareholders of the Company and/or persons connected with them has any direct or indirect interest in the award of the Contract and/or Contract Extensions.

DIRECTORS’ STATEMENT

The Board is of the opinion that the acceptances of the Contract and Contract Extensions are in the best interests of the Company.

This announcement is dated 1 April 2014.