KUALA LUMPUR (July 27): Velesto Energy Bhd, formerly known as UMW Oil and Gas Corp Bhd, has bagged a contract worth US$25 million (RM101.52 million) to provide drilling rig services for Sarawak Shell Bhd or Sabah Shell Petroleum Company Ltd (SSB/SSPC). 

In an exchange filing today, the group said the contract awarded by SSB/SSPC to its unit Velesto Drilling Sdn Bhd has a tentative commencement date between Aug 1 and Sept 30, 2018. 

Velesto Drilling is a unit under Velesto Malaysian Ventures Sdn Bhd, which is in turn a wholly-owned subsidiary of Velesto Energy.  

The contract, with an estimated value of US$25 million (or RM101.52 million), is for the provision of jack up drilling rig services for Royal Dutch Shell Plc’s subsidiaries, SSB/SSPC, based in Miri and Kota Kinabalu respectively.  

Velesto’s NAGA 7 rig will be assigned to undertake the contract, the group said.  

“The provision of the above-mentioned services is expected to contribute positively to the earnings and net assets of Velesto Energy group during the contract period for the financial period ending Dec 31, 2018,” the filing read. 

Risks associated with the carrying out of the contract are operational and executional, which can be mitigated or managed by Velesto, given its proven track record of undertaking drilling programmes. 

Shares of Velesto settled unchanged at 30 sen today, after a total of 21.64 million shares crossed hands, valuing it at RM2.47 billion.