KUALA LUMPUR, MALAYSIA, 15 MAY 2017 – UMW OIL & GAS CORPORATION BERHAD (“UMW-OG” or the “Company”) held its 7th Annual General Meeting (“AGM”) today at Menara Berkembar Bank Rakyat, in Kuala Lumpur. The Company’s shareholders approved all resolutions put
forward including:

1. The re-election of Dato’ Abdul Rahman bin Ahmad, Rohaizad bin Darus and Cheah Tek Kuang to the Board of Directors;
2. The payment of Directors Fees for the financial year ended 31 December 2016;
3. The payment of Non-Executive Directors’ fees from 1 January 2017 to the 8th AGM of the Company;
4. The payment of Directors’ remuneration (excluding Directors’ fees) to the Non-Executive Directors up to an amount of RM723,930 from 1 January 2017 until the 8th AGM of the Company; and,
5. The re-appointment of Messrs. Ernst & Young as the Company’s Auditors for the ensuing year.

In the 2016 financial year (“FY2016”), the Group recorded total revenue of RM321 million, a decrease of RM519 million or 62%, compared to the RM840 million reported in the preceding year. The revenue reduction was the direct result of full impact from the significantly lower levels of exploration, development and production activities in the oil and gas industry, whereas in 2015, the Group continued to receive income from existing unfinished contracts.

As a result, the Group posted a loss before tax of RM1,181 million for the financial year ended 31 December 2016, as compared to a loss before tax of RM348 million in the preceding year. The losses were resulted by weak demand for the Group’s drilling and oilfield services due to prolonged low oil prices as well as asset impairment amounting to RM780 million.

UMW-OG also announced the retirement of its Chairman, Tan Sri Asmat Kamaludin and the appointment of Dato Abdul Rahman Ahmad as the new Chairman.

Rohaizad Darus, President, UMW-OG shared, “2016 was another challenging year for the drilling rig business, facing not only a further decline in demand, but also declining charter rates. Similarly, workover and oilfield services divisions were also affected by the lower demand. As the company is an asset based business, significant lower utilisation of our assets will negatively impact both the top and bottom lines.”

Rohaizad also added, “Despite all the challenges, the market outlook for 2017 appears to be better than 2016. With the likelihood of continued production limit this year by OPEC and other major oil producing nations, the floor price of oil will be sustainable. This will give certainty for oil companies to invest again and for the service industry to benefit. We are already seeing this recovery with all of our 7 drilling rigs already under contract within just six months of the production cut, compared to only 2 contracted late last year. While the recovery is expected to be slow with the day rate remains depressed, we feel that it is the best time to position ourselves to maximise the benefits of the recovery. By strengthening our financial position via rights issue and refinancing our existing debts, we will be able to have the financial stamina to stay ahead longer to implement our strategic plan and embracing the changes of this cyclical industry.”

Looking ahead, the Company will continue to defend its leading position in Malaysia while progressively returning back to its previous markets in Southeast Asia. At the same time, the Company will continue to explore the Middle East market to widen its safety net to enable the Company to remain relevant and resilient should there be another industry downturn.