Kencana Petroleum Berhad's 60%-owned subsidiary, Kencana Mermaid Drilling Sdn. Bhd., has received Letter of Award from Petronas Carigali Sdn Bhd for their newbuild tender rig MKR 1. The contract is for the provision of a tender assisted drilling rig together with the related equipment and personnel to carryout offshore drilling services. The primary period of the contract is five years with extension options for up to an additional five years. The value of the contract is estimated at approximately US $235 million with commencement expected by the fourth quarter of 2009.
The tender rig that was awarded the work is currently under construction by the company’s wholly-owned subsidiary Kencana HL Sdn Bhd and is expected to be completed by fourth quarter of 2009. The rig is owned by Mermaid Kencana Rig 1 Pte Ltd ("MKR1"), an associated company which is ultimately 25% owned by the company. The contract is expected to contribute positively to the earnings of Kencana Petroleum Group through the share of profits in MKR1 for the duration of the contract starting from the financial year ending July 31, 2010.
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