HONGHUA GROUP (00196) subsidiary signs a 600 million yuan drilling rig sales agreement with Middle Eastern clients, will supply several sets of large drilling equipment.

HONGHUA GROUP (00196) announced that its subsidiary, Sichuan Honghua Petroleum Equipment Co., Ltd. (Sichuan Honghua), has recently signed a total sales agreement for drilling rigs with a client in the Middle East, amounting to 600 million RMB (the Sales Agreement). According to the Sales Agreement, Sichuan Honghua will provide the client with several large drilling rig equipment sets. These drilling rigs will be equipped with the company's independently developed automated tools, the OperaTM intelligent drilling system, and other intelligent equipment, which will help further enhance drilling operation efficiency and the automation and intelligence level of the rigs, meeting the client's requirements for safety and green low-carbon solutions. The Sales Agreement was determined after Sichuan Honghua and the client negotiated based on fairness principles. The terms of the Sales Agreement are normal commercial terms, fair and reasonable, and in line with the overall interests of the company and its shareholders. The client is a leading local drilling contractor and integrated oilfield service provider in the Middle East, primarily engaged in regional land drilling services. The company has established a long-term friendly cooperative relationship with the client for many years, continuously providing advanced drilling equipment and supporting components. The signing of this Sales Agreement will further solidify the Group's leading position in the Middle Eastern large drilling rig market and lay a solid foundation for the deepening cooperation between both parties in the future.