Petrolia Reports 3Q06 Results

Operating result for the 3rd quarter 2006 was MNOK 48.3. The operational cost MNOK 51.2, mainly consisting of opex from SS Petrolia operation. The net result for the 3rd quarter, was MNOK 21.6 including net negative financial result of MNOK (17.5), and MNOK (9.5) being 50% share of reactivation Venture Drilling.

Operating result for the period from 1/1 -30/09 of 2006 was MNOK 58.3. The expenses consist mainly of reactivation/mobilization of SS Petrolia in the 1st quarter, and operation of SS Petrolia in the 2nd and 3rd quarters.

The net result per 30/9.06 was positive with MNOK 22.4, including net negative financial items of MNOK (45.6) and MNOK (22.2.) being 50% share of reactivation Venture Drilling

As per September 30, 2006 total assets amounted to MNOK 1 901. SS Petrolia has a book value MNOK 157, which reflects historic cost, including upgrades, adjusted for depreciation. The market value of the rig in today's market is believed to be significantly higher.

The 43.5% share in Petromena is booked at a value of NOK 6 per share. The value of the share as per 30.09.06 was NOK 5. Based on recent new building prices, The Board of directors considers the value of Petromena as reasonable.

Petrolia Drilling ASA has during 2006 issued 165,000,000 new shares at a subscription price of NOK 3.65 per share in a private placement on the April 21, 2006. Gross proceeds from the private placement amounted to MNOK 602.

After the April 21, 2006 private placement, the share capital of Petrolia Drilling ASA amounts to NOK 386,195,999, divided into 772 391 998 shares, each with a par value of NOK 0.50.

The financial data have been prepared in accordance with the International Financial Reporting Standards (IFRS). The Market

The semi market has continued to develop positively during the 3rd quarter of 2006, with improving day rates and rig utilization. The utilization for semi's in UK is close to 90%, while the overall utilization is in excess of 95%.

Recent fixtures in the 2nd generation semi market on the UK shelf in the North Sea corresponds to day rates of approximately US $300,000 - $350,000.

The utilization in the deepwater segment, hereunder drillships, is close to 100%. Recent fixtures in the drill ship market corresponds to day rates of approximately US $300,000- $400,000.

Based on this market Petrolia Drilling ASA invested in Petromena AS, which has entered into agreements for construction of two modern, semi submersible drilling rigs plus a right to construct one additional, at the Jurong-yard in Singapore. The deepwater water rigs are 6th generation units for drilling in ultra deep waters as the Mexico-gulf, Brazil and West Africa. The company's board is expecting a favorable rig market in the next few years.

Current contract for SS Petrolia (100% owned) started on March 28, 2006 and the rig has performed well during the 3rd quarter 2006, and into the 4th quarter. The existing contract with Apache will be followed by a five-month contract starting in the spring of 2007 at a rate of US $300,000 per day.

Acquired 50% ownership in Venture Drilling AS, which has a bareboat agreement for the drillship DS Deep Venture. Larsen Oil & Gas Ltd (Aberdeen) has on behalf of Venture Drilling AS entered into a contract with ExxonMobil for a duration of 18 months, commencing 1st quarter 2007. The value of the contract is in the range of US $200-220 million.

As per November 2006, Petrolia Drilling ASA controls approximately 43% of the shares in PetroMena AS, a company managed by Larsen Oil & Gas Ltd, building two modern, semi submersible drilling rigs (Petrorig I and II) at the Jurong Shipyard in Singapore plus a right to construct one additional . The deepwater rigs are harsh environment 6th generation units designed for drilling in ultra deep waters in areas such as Brazil, the Gulf of Mexico and West Africa. Petrorig I has recently entered into a 5 years contract with Petrolio Braseliero S.A. at a value of US $700 million. Refinanced balance sheet: booked value of equity increased in the 3rd quarter 2006 to MNOK 1114, including share issue April 21st of 165,000,000 new shares at a subscription price of NOK 3.65 per share.

Booked equity also includes incorporation of 43% ownership in Petromena AS. SS Petrolia has a book value of MNOK 157, which reflects historic cost, including upgrades, adjusted for depreciation. The market value of the rig in today's market is believed to be significantly higher.

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