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. (“VMV”), which in turn is a wholly-owned subsidiary of VEB, has received a Letter of Award from PETRONAS Carigali Sdn. Bhd. (“PCSB”), for the Provision of Jack Up Drilling Rig “NAGA 7” (“Contract”).
The Contract is for the provision of Drilling Rig Services for PCSB’s drilling programme, whereby VEB Group will assign its NAGA 7.
The Contract is to drill two (2) firm wells with estimated contract value of USD8 million and expected commencement date in Quarter 3 2019.
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 PCSB
PCSB, a wholly-owned subsidiary of Petroliam Nasional Berhad (PETRONAS), is a leading exploration and production (E&P) company taking on increasingly challenging projects to bring new oil & gas supplies to the market. PCSB was incorporated in Malaysia under the Companies Act, 1965 on 11 May 1978 and has its registered office at Tower 1, Petronas Twin Towers, Kuala Lumpur City Centre, 50088 Kuala Lumpur, Malaysia. The principal activities of PCSB are the exploration, development and production of oil and gas.
4. FINANCIAL EFFECTS
The provision of the abovementioned services is expected to contribute positively towards the earnings and net assets of VEB Group during the contract period for the financial period ending 31 December 2019.
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, 4 September 2019 from PCSB.
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 award of the Contract is in the best interests of VEB Group.
This announcement is dated 4 September 2019.