KUALA LUMPUR (June 1): Velesto Energy Bhd has secured a contract worth an estimated US$10.9 million (RM50.26 million) from Vestigo Petroleum Sdn Bhd for its Naga 2 jack-up rig to drill five wells.

The contract, awarded to Velesto’s wholly-owned unit Velesto Malaysian Ventures Sdn Bhd, is expected to commence in 4QFY2023, Velesto said.

Vestigo, which develops small and stranded oil and gas (O&G) reserves, is a wholly-owned unit of Petronas Carigali Sdn Bhd.

This is the third contract win announcement by Velesto this year. In February, Naga 2 secured a one-month contract from Roc Oil (Sarawak) Sdn Bhd to drill three wells for a contract value of US$14 million.

Last month, Velesto announced contracts for Naga 3, 4, and 6 worth US$128 million from Petronas Carigali for the drilling of 22 wells with options to drill three more wells.

The group is riding on the O&G upstream activities recovery, with 1QFY2023 daily charter rate of US$86,000 at its highest since 2016 and utilisation rate of 90% being its highest since 2014.

Firm order book stood at over RM1.3 billion as at April, according to Velesto's annual general meeting presentation in May.

Shares of Velesto closed unchanged at 23 sen, giving the group a market capitalisation of RM1.85 billion.