Scorpion Offshore to Build Fifth Jackup

Scorpion Offshore has exercised its option to construct its 5th LeTourneau Super 116 jackup at Keppel AmFELS in Brownsville, Texas, subject to raising sufficient funds to meet the down payment requirements of the shipyard and equipment suppliers. Accordingly, the Company plans to raise up to US $25 million through the private placement of additional authorized shares at market price.

On December 28, 2005, the Company procured an option from AmFELS to construct Rig #5 which has a projected delivery in November 2008. This option, which is valid until January 18, 2006, requires that the Company pay AmFELS US $13 million prior to this date. On December 27, 2005 the Company also exercised its outstanding option to purchase a "Kit" comprised of the legs, jacking system and cranes for a Super 116C from LeTourneau Inc. The Company intends to use this "Kit" in the construction of its fifth rig, which will be named the "Offshore Intrepid". No further payments are due to either AmFELS or LeTourneau on the Offshore Intrepid until the first quarter of 2007.

The Company plans to raise the above referenced funds as soon as possible, but, in any event, before January 18, 2006. Proceeds will be used to make down payments to the shipyard, and to the providers of drilling and other equipment required to construct the Offshore Intrepid. The balance will be used for general corporate purposes.

The Company will inform the market of the price, date and number of shares to be issued upon completion of the private placement.

For More Information on the Offshore Rig Fleet:
RigLogix can provide the information that you need about the offshore rig fleet, whether you need utilization and industry trends or detailed reports on future rig contracts. Subscribing to RigLogix will allow you to access dozens of prebuilt reports and build your own custom reports using hundreds of available data columns. For more information about a RigLogix subscription, visit