KUALA LUMPUR (May 23): Oil and gas services provider Velesto Energy Bhd (KL:VELESTO) has bagged a contract worth over US$90 million (RM383 million) to provide drilling rig services for the PC Ketapang II Ltd, PC North Madura II Ltd and Petronas North Ketapang Sdn Bhd programme in Indonesia, under which the group will assign its Naga 8 jack-up rig.

The contract is for a firm period of four years, covering 12 firm wells and three optional wells, and is scheduled to commence in July. It is expected to support Velesto’s rig utilisation and earnings visibility from 2025 to 2028.

In a filing with Bursa Malaysia on Friday, Velesto said its indirect wholly owned subsidiary Velesto Drilling Sdn Bhd has received a letter of award from PC Ketapang II, PC North Madura II and Petronas North Ketapang for the contract.

"Operations are anticipated to resume in July 2026, with any changes to the suspension timeline to be communicated by the client," Velesto said.

In the meantime, Velesto said a suspension period is scheduled from February to July, during which the group has the right to market Naga 8 for other opportunities. Naga 8 has a drilling depth capability of 30,000ft and has a rated operating water depth of 400ft.

In a separate statement, Velesto president Megat Zariman Abdul Rahim said the latest contract award reflects the group's ongoing efforts to expand its footprint in Southeast Asia.

"As the second contract secured in the region, it solidifies our commitment to this strategic growth. Our focus remains on building a healthy portfolio of contracts that strengthen the outlook and create long-term value for our stakeholders.”

At noon market break, Velesto shares closed unchanged at 17 sen, giving it a market capitalisation of RM1.36 billion. The stock has risen 6.25% so far this year.