Velesto Energy Berhad (VELESTO)

Velesto Energy Berhad: The Only Jack-Up Rig Contractor on Bursa Malaysia

Velesto Energy Berhad (formerly known as UMW Oil & Gas Corp Bhd) is Malaysia's largest jack-up drilling rig contractor. The company provides drilling and oilfield services for the upstream oil & gas sector. Velesto is the only listed company on Bursa Malaysia focused 100% on jack-up rig services - making it a niche but unique player in Malaysian investors' portfolios.

Rig Fleet: NAGA Series

Velesto operates 6 jack-up rigs under the NAGA brand. All rigs are self-elevating platforms used for oil and gas drilling in shallow waters.

Important note: NAGA 3 was disposed of in 2022-2023 (aging 2010-built rig, no longer economical). Current fleet is 10-16 years old - this is an aging fleet requiring higher maintenance costs.

Business Model

Velesto generates revenue through:

• Drilling Services (99.5% of profits): Leasing jack-up rigs to oil companies like Petronas, PTTEP, and Indonesian operators. Rental rate is called day rate (charge per day), for example NAGA 5 is leased at USD111,100/day to PTTEP.
• Non-Drilling Services (still minimal): Oilfield support services like platform maintenance, manpower supply, and small projects.

In December 2025, Velesto sold its workover business (Velesto Workover Sdn Bhd) to Enviros Holdings for RM16.5 million. Expected gain is only RM0.4 million - very thin. This is a streamlining strategy to focus solely on core jack-up rig business.

Company History: From UMW O&G to Velesto

The company was formerly UMW Oil & Gas Corp Bhd, a subsidiary of UMW Holdings that nearly went bankrupt during the 2015-2020 oil crash. Crude oil prices fell from USD100/barrel to below USD30, causing Petronas and other operators to cancel many rig contracts. UMW O&G had to restructure debt, and in 2017 rebranded to Velesto Energy Berhad as part of the turnaround.

From 2020 to 2024, Velesto successfully recovered as oil prices rebounded and Petronas resumed capex. 2024 was the golden year with 87% utilization and high day rates (USD126k/day). However, 2025 shows signs of moderation - utilization down to 70%, day rates down to USD111k.

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