KUALA LUMPUR (July 13): Velesto Energy Bhd (KL:VELESTO) said the proposed sale of its Naga 3 jack-up drilling rig to Indonesia's PT Indonesia Drilling Energy for US$63 million (RM258.4 million) cash has been terminated after the transaction failed to complete by the agreed deadline.

The oil and gas services provider said the sale and purchase agreement (SPA) was terminated on July 7 following the issuance of a notice of termination by its indirect subsidiary, Velesto Drilling 3 (L) Ltd (VD3L), to the buyer on June 30.

"Pursuant to the terms of the SPA, completion did not occur by the due date," Velesto said in a brief Bursa Malaysia filing on Monday.

"In accordance with the terms of the SPA, VD3L reserves its rights under the SPA. Velesto Naga 3 remains an asset of the group," it added.

Velesto did not elaborate on why the deal was not completed by the deadline, saying only that the termination is not expected to have a material impact on its earnings or net assets for the financial year ending Dec 31, 2026.

Velesto first announced the proposed disposal in December 2025, saying the rig would be sold as part of a fleet optimisation exercise. The group had expected to record a pro forma gain of RM17.1 million from the sale — targeted for completion by the end of the first half of this year — after accounting for estimated expenses, contingencies and taxes.

It intended to use RM251.1 million of the proceeds for distribution to shareholders, general corporate purposes and working capital; the remainder was to be used to cover expenses related to the disposal.

Shares of Velesto slipped half a sen, or 1.72%, to close at 28.5 sen on Monday, giving the company a market capitalisation of RM2.36 billion.