CEO Morning Brief

Velesto Secures Contract Extension From Carigali Hess Worth US$74m

Publish date: Tue, 28 Nov 2023, 08:43 AM
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TheEdge CEO Morning Brief

KUALA LUMPUR (Nov 27): Velesto Energy Bhd said the contract between its unit Velesto Drilling Sdn Bhd and Carigali Hess Operating Company Sdn Bhd has been extended for another one year and six months with an estimated contract value of US$74 million (RM346.39 million).

The contract, which entails the provision of a 10K jack up drilling rig, will commence from April 19, 2024 until Oct 18, 2025, Velesto said in a filing with Bursa Malaysia on Monday.

"Velesto Energy will continue to assign NAGA 8 for the extension period of the contract," it said, referring to its premium independent-leg cantilever jack-up rig that has a drilling depth capability of 30,000 feet and a rated operating water depth of 400 feet.

Velesto added that the extension of the contract is expected to contribute positively towards its earnings and net assets.

Carigali Hess first awarded Velesto Drilling the contract in 2019, and it was worth US$131 million (RM541.17 million) at the time.

Carigali Hess, an oil and gas joint venture between PCJDA Ltd and Hess Oil Company of Thailand Ltd, is involved in gas production in the joint development area administered by the Malaysian-Thailand Joint Authority.

The contract initially commenced in the second half of 2020 for three years, with three extension options of six months each.

Velesto's shares closed up one sen or 4.44% at 24 sen on Monday, for a market capitalisation of RM1.89 billion.

Read also:
Velesto bags RM541m Carigali Hess contract

Source: TheEdge - 28 Nov 2023

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