The drilling contract comprises a one-year primary term and an extension option into the second year.
The BP contract is the first drilling contract secured by AOS following its recent acquisition by KS Energy and will be fulfilled by a 1500HP National 110 land drilling rig. This drilling rig was recently acquired by KS Discovery Limited, a wholly owned BVI subsidiary of KS Energy. The rig will be refurbished, re-certified and upgraded by AOS to the latest and highest standards at AOS facilities in Dubai.
The rig is expected to be shipped to Pakistan later this year for commencement of drilling operations in the first quarter of 2008.
Commenting on the award, Mr. Kris Wiluan, Chairman and CEO of KS Energy, said: "This contract from BP to perform drilling operations at the Badin Field marks the Group's integrated service to a major oil company and entrance into a new territory. We are now well positioned to pursue opportunities arising from the growing global demand for quality one-stop oilfield services."
Additionally, KS Energy also secured a SGD12.8 million (US$8.4 million) dry lease charter contract in Kurdistan for a period of 2 years with a one year renewal option. This contract involves the rental of the land rig only and no drilling crew will be provided. The charter revenue is expected to commence in fourth quarter of FY2007.
The total contract value of the two abovementioned contracts amounts to approximately SGD47 million (US$31 million). These contracts will be funded by a combination of internal resources and borrowings.
The contributions from these contracts are not expected to have material impact on the Group's earnings per share for FY2007 and neither do the substantial shareholders of KS Energy have any interest, directly or indirectly, in the above transactions.
Furthermore, to demonstrate their commitment and confidence in the growth potential of KS Energy, the management of AOS and their families, through Sovereign Assets S.A., have acquired equity interests in KS Energy.
AOS is a specialized oilfield services company providing on and off shore drilling, accommodation and support services for the oil and gas industry with a well established presence in the Middle East and the North Sea. Headquartered in Dubai, the Company has operations in the Netherlands, Kurdistan, Egypt and Denmark.
The operations of AOS in Dubai are sited on a 30,000 sq m yard comprising a workshop, fabrication and maintenance facilities. The site is in close proximity to the Jebel-Ali port in Dubai. AOS employs a total of more than 300 staff comprising 47 management staff and more than 250 site assigned personnel.
Underlying AOS' competency to successfully execute complex oilfield projects is the experience and knowledge of its strong management team. Having worked with major international oilfield service companies, the AOS management team has had significant exposures in worldwide oilfield operations.
A leading one-stop energy services provider to the global oil & gas and petrochemical industries Listed on SGX-SESDAQ on 6 August 1999 and upgraded to the Mainboard on 11 March 2002, KS Energy is an energy services group catering to the oil & gas and petrochemical industries around the world.
In addition to distributing more than 60,000 oil & gas, marine and tubular related products that encompass more than three hundred global brands, the Group, through a series of acquisitions in the last few years, enhanced its expertise in the related services of procurement, distribution, engineering and offshore chartering to support its customers. Over the last two decades, the Group has established very close working relationships with major oil & gas companies in the region. In leveraging its enhanced expertise as a leading one-stop supply and services provider with these long term relationships, KS Energy was able to provide higher value-added services by procuring and supplying upgraded capital assets to CNOOC Group, Maersk, Gulf Drilling International Limited and others under the service contracts it has secured since November 2003.
Headquartered in Singapore, the Group has subsidiaries and representative offices in China, Vietnam, Thailand, Qatar, UAE, USA, Indonesia and Malaysia to support its wide base of global oil & gas customers.
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