We refer to the earlier announcements dated 5 November 2019 in relation to the Contract, and the terms herein, unless the context otherwise stated, bear the same meaning as those defined in the earlier announcements on 5 November 2019.

1. INTRODUCTION

The Board of Directors of Velesto Energy Berhad ("VEB") is pleased to announce that Velesto Drilling Sdn. Bhd. (“VED”), a wholly-owned subsidiary of Velesto Malaysian Ventures Sdn. Bhd., which in turn is a wholly-owned subsidiary of VEB, has on 1 November 2023, mutually agreed for the extension of the Contract with Carigali Hess Operating Company Sdn Bhd (“Carigali Hess”) for another 1 year and 6 months (18 months), commencing from 19 April 2024 until 18 October 2025, subject to any further extension as may be mutually agreed upon between VED and Carigali Hess (“Extension”).

2. DETAILS

VEB Group will continue to assign NAGA 8 for the extension period of the Contract, with an estimated contract value of USD74 million.

NAGA 8 is a premium independent-leg cantilever jack-up rig that has a drilling depth capability of 30,000 feet and has a rated operating water depth of 400 feet.

3. INFORMATION ON PARTIES

3.1 Information on VED

VED was incorporated in Malaysia under the Companies Act, 1965 on 29 July 2003 and is deemed to be registered under the Companies Act 2016. VED is principally involved in the offshore drilling business and operations and other engineering services for oil and gas exploration, development and production in Malaysia and overseas.

3.2 Information on Carigali Hess

Carigali Hess is a joint venture Oil and Gas company between PC JDA Limited, Hess Oil Company of Thailand Ltd. Co. and Hess Oil Company of Thailand (JDA) Ltd. Carigali Hess based in Kuala Lumpur, is engaged in gas production in Block A-18 of the Joint Development Area administered by the Malaysian-Thailand Joint Authority (MTJA).

4. FINANCIAL EFFECTS

The extension of the Contract is expected to contribute positively towards the earnings and net assets of VEB Group during the period of the Extension of the Contract.

5. RISK ASSOCIATED WITH THE CONTRACT

The risks associated with the execution of the Contract are operational and execution risks, which will be mitigated and/or managed by VED, a company with a proven successful track record of undertaking drilling programmes.

6. CONFIDENTIALITY

The contents for this Announcement is in accordance with the terms of the Contract, which the Company has received the approval for the release of Announcement today, from Carigali Hess.

7. DIRECTORS AND SUBSTANTIAL SHAREHOLDERS INTEREST

None of the Directors and/or the substantial shareholders of VEB and/or persons connected with the Directors and/or substantial shareholders have any interest, direct or indirect in the above Contract.

8. STATEMENT BY DIRECTORS

The Board of Directors of VEB is of the opinion that the acceptance of the Extension of the Contract is in the best interests of VEB Group.

This announcement is dated 27 November 2023.