Songa Offshore Acquires the Deepsea Delta

Songa Offshore has entered into an agreement with Odfjell Drilling to acquire the semisubmersible Deepsea Delta. The acquisition price is set at US $428.5 million.

Deepsea Delta is an Ocean Ranger-designed semisub, built in 1981 at Rauma Repola. The rig is a substantially upgraded third generation rig. Attributes include 15K BOP, VDL transit / drilling / survival of 2,000 mt / 3,700 mt / 3,700 mt, water depth capacity of 1,500 ft and 12 point mooring system. The rig will continue to be operated by Odfjell Offshore, a company within the Odfjell Drilling Group for the remainder of the two contracts it is fixed for. During this time Odfjell Offshore will receive a management fee equal to 5% of actual dayrate achieved.

Currently the rig is on a contract with StatoilHydro Petroleum ASA, which is estimated to end in February 2009. The dayrate for this contract is approximately US $170,000. Thereafter the rig has been fixed for three years to a group of two oil companies, Revus Energy ASA and Det norske oljeselskap ASA, at a dayrate of US $435,000 plus cost escalation clauses.

The Company intends to finance the acquisition through bank facility and interest bearing instruments. Efforts have started to put this in place.

CEO Asbjorn Vavik says: "We are pleased to announce this transaction, which is in accordance with our strategy of focusing on midwater units which are in operation. This unit is a well maintained rig, which meets all current requirements in the Norwegian sector, and it allows for upgrade to 3,000' water depth. The contracts which follow with Deepsea Delta increase the Company's earnings visibility and are accretive to the Company."

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