Scorpion Offshore Reports Unaudited 3Q07 Financial Results

The Board of Directors of Scorpion Offshore Ltd. has approved the Company's third quarter 2007 unaudited financial statements. These financial statements have been prepared in accordance with US Generally Accepted Accounting Principles ("GAAP").

Net loss for the quarter totaled US $2.4 million compared to a net income of US $0.6 million for the same period in 2006. For the quarter, interest income of US $0.8 million offset operating expenses of US $0.9 million, stock-based compensation of US $0.7 million, debt commitment fees of US $0.7 million and general and administrative expenses of US $0.7 million. This compares to interest income of US $3.7 million offsetting debt commitment fees of US $0.8 million and general and administrative expenses of US $1.4 million for the 3 months ended March 31, 2006. All interest costs for the quarter were capitalized.

For the period from April 15, 2005 (date of inception) to March 31, 2007, the Company's net loss was US $10.5 million. The net loss was comprised of equity private placement fees of US $8.7 million, debt commitment fees of US $3.6 million and general and administrative expenses of US $4.4 million which was offset by US $9.6 million in interest income.

Total assets as of March 31, 2007 were US $546 million. This consists of US $68.9 million in cash and cash equivalents, US $23.5 million of which is restricted, and US $467.7 million in construction in progress. Long term debt totaled US $250.0 million and shareholder's equity US $251.4 million.

As of June 30, 2006 total assets were US $458.2 million. This consisted of US $142.7 million in cash and cash equivalents ($73.9 of which is restricted) and US $294.5 in construction in progress. Long Term debt totaled US $225.0 million and shareholder's equity of US $217.9 million.

Rig Construction

The Offshore Courageous will be delivered on schedule at the end of May 2007. The Offshore Defender, Offshore Resolute, Offshore Vigilant and Offshore Intrepid are all currently under construction at the Keppel AmFELS shipyard in Brownsville , Texas. These rigs remain on schedule and have met their progress milestones on time. The Offshore Defender was launched ahead of schedule on March 29, 2007. Construction on the Offshore Intrepid started on March 26, 2007.

Offshore Courageous Letter of Intent

Referencing Scorpion's press release dated May 24, 2007, the Offshore Courageous secured a letter of intent for operations offshore India beginning in mid-September 2007. The contract has a firm duration of 4 wells (estimated total duration 120 days) plus one option for 4 additional wells. The estimated contract value ranges from US $35 to $58 million, depending on the number of option wells drilled. The letter of intent is subject to certain conditions including agreement of final contractual terms and conditions.

Offshore Intrepid Rig Financing

Referencing the Company's press release dated April 13th, we completed the construction financing for the Offshore Intrepid. The financing consists of a $95 million term loan and a $10 million revolving credit facility. Both the term loan and revolving credit facility mature 5 years from the delivery of the rig from the shipyard.

All five Scorpion rigs currently under construction are now fully financed.

Market

As evidenced by the Offshore Courageous' letter of intent mentioned above, the international jack-up market continues to strengthen. The Arabian Gulf, India, Mexico, the Mediterranean, West Africa and SE Asia remain tight as evidenced by almost 100% utilization in these markets. In addition, we also expect a significant number of new tenders in most of these markets during the second half of 2007.

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