Kuala lumpur: Velesto Energy Bhd's share price saw a modest increase, rising half-a-sen to 26.5 sen, after securing a significant US$51 million contract from Chevron Malaysia for the North Malay Basin Full Field Development Campaign. At 10.53 am, a notable 28.52 million shares of Velesto were traded, reflecting investor interest in the company following the announcement.

According to BERNAMA News Agency, Velesto's jack-up rig, Naga 8, will play a critical role in the contract, providing integrated rig, drilling, and completion services for Chevron. The contract is scheduled to commence in August 2026 and is expected to continue through 2028. CIMB Securities Sdn Bhd highlighted that the contract, with an assumed firm duration of 17 months, suggests a blended day rate of approximately US$98,000 per day. This new agreement effectively replaces the recently terminated PC Ketapang campaign, which had a lower assumed day rate of US$90,000 per day.

CIMB Securities also noted that Velesto is actively re-marketing another rig, Naga 3, for a potential project starting in the fourth quarter of 2026, following the cancellation of its proposed disposal. Meanwhile, Velesto's other rigs are contracted for the remainder of the financial year 2026 (FY2026), with the company now concentrating on securing contracts for FY2027. The research firm projects a utilisation rate of 69 percent for Velesto in FY2026, slightly down from 72 percent in FY2025, before an anticipated improvement to 76 percent in FY2027.

Despite the new contract, CIMB Securities made no adjustments to its earnings forecasts for Velesto or its target share price of 35 sen, as the contract award had already been factored into their projections. They expressed confidence in Velesto's strategic position to capitalize on the recovery in domestic upstream activity and a potential tightening of the jack-up rig market.