KUALA LUMPUR (Dec 11): Velesto Energy Bhd has bagged a US$30 million contract from Abu Dhabi's Mubadala Petroleum LLC to provide jack-up drilling rig to undertake drilling services for the Pegaga development drilling programme.

In a bourse filing today, Velesto said its indirect wholly-owned subsidiary Velesto Drilling Sdn Bhd has received a letter of award from Mubadala Petroleum’s entity MDC Oil & Gas (SK 320) Ltd for the proposed services.

"The contract is to drill seven firm wells with an expected commencement date envisaged for the second quarter of 2020," it added.

Velesto said it will use its NAGA 4 rig, which has a drilling depth capability of 30,000ft and an operating water depth of 400ft, to undertake the works. 

"The provision of the services is expected to contribute positively towards the group's earnings and net assets during the contract period for the financial year ending Dec 31, 2020," it noted.

Velesto shares closed unchanged at 36.5 sen today, for a market capitalisation of RM3 billion.