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 three new contracts (“Contracts”) and a contract extension (“Contract Extension”).

INFORMATION ON THE CONTRACTS AND CONTRACT EXTENSION

(A) Award of Contracts

(i) Petcon (Malaysia) Sdn Bhd, a wholly-owned subsidiary of SapuraKencana, has been awarded two contracts by Petronas Carigali Sdn Bhd (“PCSB”) for the provision of its tender assist drilling rigs, namely SKD T-9 (“SKD T-9”) and SKD T-10 (“SKD T-10”).

PCSB intends to utilise SKD T-9 and SKD T-10 for its development drilling campaign offshore Malaysia.

SKD T-9

The contract for SKD T-9 is for a period of five years with an option to extend for a further two years. This contract shall be effective from July 2014 to June 2019.

SKD T-10

The contract for SKD T-10 is for a period of three years with an option to extend for a further two years. This contract shall be effective from August 2014 to July 2017.

(ii) SapuraKencana Drilling Asia Limited, a company incorporated in Hong Kong and wholly-owned by SapuraKencana, has been awarded a contract by Chevron Thailand Exploration And Production Limited (“Chevron”) for the provision of offshore drilling rig and services by its tender assist drilling rig “SKD T-18” (“SKD T-18”).

Chevron intends to utilise SKD T-18 for its offshore development drilling campaign in Thailand.

The contract for SKD T-18 is for a period of five years and shall be effective from June 2014 to May 2019.

(B) Contract Extension

Seadrill Jaya Ltd, a company incorporated in Bermuda and wholly-owned by SapuraKencana, has accepted an extension to its contract with BP Trinidad & Tobago LLC (“BP T&T”) for the provision of offshore drilling rig and services by its tender assist drilling rig “SKD Jaya” (“SKD Jaya”).

BP T&T intends to utilise SKD Jaya for its offshore development drilling campaign in Trinidad & Tobago.

The extension of the contract for SKD Jaya is for a period of one year and shall be effective from August 2014 to July 2015.

VALUE OF CONTRACTS AND CONTRACT EXTENSION

In total, the Contracts and Contract Extension are valued at circa USD700 million (RM2.3 billion).

RISK FACTORS

Risk factors affecting the Contracts and Contract Extension 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 Contracts and Contract Extension 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 Contracts and Contract Extension 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 Contracts and/or Contract Extension.

DIRECTORS’ STATEMENT

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

This announcement is dated 16 June 2014.