Oceaneering to Acquire ROV Business From Subsea 7

Oceaneering International has entered into an agreement to acquire the drill support ROV business consisting of 82 remotely operated vehicles (ROVs), including 54 work class and 28 observation class, related contracts and employees, and significant subsea engineering, tooling, and products capabilities and capacity from the Subsea 7 group of companies. This agreement has been approved by the respective Boards of Directors and is conditional upon several factors, including no material adverse findings during the due diligence review. It is anticipated that closing of the transaction will occur in early 2004.

The purchase price for the assets being acquired is $108 million, subject to certain possible adjustments; no financial working capital is included. Oceaneering expects to fund the purchase price by using existing credit facilities, as well as expanded facilities currently being discussed.

Oceaneering projects this acquisition would generate approximately $70 million in revenues; $10 to $12 million of operating income, after an estimated $10 million of depreciation and amortization expense; and be $0.15 accretive to earnings per share (EPS) on an annualized basis in 2004. Actual results will be impacted by the date the transaction closes. In 2005 Oceaneering projects the EPS accretion to be in the range of $0.20 to $0.25.

John Huff, Chairman and Chief Executive Officer, stated, "We are extremely pleased to have reached a conditional agreement with Subsea 7 to acquire an exceptional operation. We look forward to integrating these assets and talented individuals into our existing ROV organization and increasing Oceaneering's international business exposure to deepwater exploration, development, and production activities.

"The pending acquisition of these ROVs and related tooling engineering capabilities will substantially enhance our existing worldwide market leadership position in providing oilfield ROV services. Our oilfield work class ROV fleet size will increase by 40%, from 125 to 179 vehicles."

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