Velesto Energy, a Malaysian operator of premium jack-up drilling rigs, has reached an agreement with PC Ketapang II, PC North Madura II, and PETRONAS North Ketapang to terminate the drilling contract for the jack-up rig “Naga 8” in Indonesian waters early and without cause.
The contract was signed in May 2025 with execution originally scheduled to commence in July 2025, covering a four-year firm work program comprising 12 firm wells and 3 optional wells. It also includes a scheduled suspension period from February to July 2026, during which Velesto has the right to seek alternative work for the “Naga 8” before resuming operations under the original contract in July 2026.
Prior to the termination of the contract, “Naga 8” had completed the first phase of the project, drilling three of the twelve planned wells over a period of approximately eight months.
Velesto stated that the termination agreement took effect on July 7, enabling it to seek alternative deployment opportunities for the “Naga 8” while pursuing contracts with superior commercial terms, a more logical drilling sequence, and better overall commercial prospects.
Currently, the “Naga 8” is executing the East Belumut Phase 9 infill drilling project offshore Peninsular Malaysia under a separate contract with Jadestone Energy; this project is valued at approximately US$16.49 million and is scheduled to run from March 2026 to July 2026. Consequently, this termination is not expected to have a material adverse effect on earnings or net assets for the financial year ending December 31, 2026.
Shortly before this, Velesto announced the termination of the sale and purchase agreement for the jack-up drilling rig “Naga 3,” which had been signed with PT Indonesia Drilling Energy.