Scorpion Offshore Increases Share Capital

Scorpion Offshore has raised approximately US R25 million of equity on January 6, 2006 through a private placement of 3,000,000 shares at a price of NOK 55.50/share. The offering was executed by Fearnley Fonds and First Securities ASA.

The total number of outstanding shares of Scorpion Offshore Ltd. increases from 40,830,385 to 43,830,385 shares, pending registration of the capital increase in the Register for Business Enterprises. Accordingly the issued share capital of the company was increased by US $6,000 comprised by 3,000,000 shares with a par value of US $0.002.

The proceeds from this private placement will be used to make the necessary down payments on the Offshore Intrepid (Rig #5) to the Keppel AmFELS and, and to various providers of drilling and other equipment required to construct the Offshore Intrepid. The balance will be used for general corporate purposes. The cost of the Offshore Intrepid, including financing, is expected to be US $143 million, which is in line with the cost of the Offshore Resolute, our third rig.