Velesto Energy, Carigali Hess agree to extend 10K drilling rig contract for another 18 months

KUALA LUMPUR: Velesto Energy Bhd’s wholly-owned subsidiary, Velesto Drilling Sdn Bhd, has mutually agreed for the extension of the Provision of 10K Jack-up Drilling Rig for 2020 Drilling Programme contract with Carigali Hess Operating Company Sdn Bhd for another 18 months worth US$74 million (US41=RM4.67).

In a filing with Bursa Malaysia today, Velesto Energy said the extension would commence from April 19, 2024 until Oct 18, 2025, subject to any further extension as may be mutually agreed upon between Velesto Drilling and Carigali Hess.

"Velesto Energy will continue to assign NAGA 8 for the extension period of the contract with an estimated contract value of US$74 million,” it said.

It said NAGA 8 is a 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 Energy said the extension of the contract is expected to contribute positively towards the earnings and net assets of the company during the period of the extension of the contract.

"The risks associated with the execution of the contract are operational and execution risks, which will be mitigated and/or managed by Velesto Drilling, a company with a proven successful track record of undertaking drilling programmes,” it said.

On Nov 5, 2019, Velesto Energy through Velesto Drilling bagged a contract from Carigali Hess for the provision of 10K jack-up drilling rig for 2020 drilling programme worth US$131 million which commenced in the second half of 2020.

The contract was for a duration of three years with three extension options of six months each. - Bernama

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Velsto Energy , extension , Carigali Hess


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