INTRODUCTION

The Board of Directors of SapuraKencana Petroleum Berhad (“SapuraKencana” or “Company”) (“Board”) is pleased to announce that Kencana HL Sdn Bhd (“Kencana HL”), a wholly-owned subsidiary, has been awarded the following contracts:

(i)  An EPCIC contract for 3 remote wellhead platforms in the North Malay Basin by Hess Exploration and Production Malaysia B.V.

This EPCIC contract is for a period of approximately 25 months and the work is expected to commence in the second quarter of 2014 and expected to be completed by the third quarter of 2016.

(ii)  An EPCIC contract for 4 wellhead platforms and associated subsea pipelines for JDA Block B-17 and B17-01 Field Phase 3 Development Project by Carigali-PTTEPI Operating Company Sdn Bhd.

This EPCIC contract is for a period of approximately 39 months, with work commencing in June 2014 and expected completion in September 2017.

TOTAL VALUE OF CONTRACTS

In total, the contracts are valued at circa USD415 Million (circa RM 1.3 Billion).

FINANCIAL EFFECTS

The Contract will have no effect on the issued and paid-up capital of the Company and is expected to contribute positively towards the earnings and net assets per share of SKPB Group during the Contract period.

RISK FACTORS

Risk factors affecting the Contract are mainly operational in nature and include execution risks such as availability of skilled manpower and materials, weather conditions, and political, economic and regulatory conditions.  Notwithstanding, the Company has established a successful track record in undertaking similar projects.

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 Contract. 

DIRECTORS' STATEMENT

The Board is of the opinion that the acceptance of the Contract is in the best interest of the Company.

This announcement is dated 19 June 2014.