Scorpion & QGP Cancel Cooperation Agreement

On July 31, 2006, Scorpion Offshore Ltd. and Queiroz Galvao Perfuracioes, S.A. ('QGP'), a Brazilian drilling company, decided to cancel their cooperation agreement regarding the formation and operation of the joint venture company referred to in the press release dated June 30, 2006. QGP will proceed without any further involvement from Scorpion.
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