Kenanga Researh said the earnings outlook for FY25 remains intact, supported by existing charter coverage.
PETALING JAYA: Analysts are divided on the outlook for drilling and oilfield service provider Velesto Energy Bhd
, citing concerns over rig charter visibility in 2026 despite near-term earnings support from existing contracts.
The group had secured a drilling contract from PTTEP HK Offshore Ltd and PTTEP Sarawak Oil Ltd for the provision of Naga 5 for its 2025 to 2026 drilling campaign.
The contract, which commenced in June, covered a firm duration of 15 wells and up to eight optional wells, valued at US$40mil with an implied daily charter rate of around US$111,100.
Kenanga Research stated that while the latest win is positive as it secured Naga 5’s earnings visibility into financial year 2026 (FY26), the win is deemed as within its expectations.
“The earnings outlook for FY25 remains intact, supported by existing charter coverage.
“However, FY26 earnings face downside risks as three more rigs are yet to secure charters,” Kenanga Research noted.
It highlighted that rig utilisation in FY26 remained uncertain with only three rigs namely Naga 4, 5 and 8, having secured firm charters to date.
Other rigs are still bidding for contracts or pending renewal discussions, with some jobs likely to be sporadic.
It maintained its earnings forecast and “underperform” rating on Velesto, with an unchanged target price of 16 sen.
