Spinnaker Higher Bidder of 40 GOM Blocks

Spinnaker participated in a total of 56 bid submissions, second most by industry for OCS Sale #182. Forty-one of these blocks are located in water depths greater than 200 meters (deep water) and fifteen blocks in water depths less than 200 meters (shelf). Generally, block sizes are 5,000 acres on the shelf of Louisiana and 5,760 acres in deep water.

Spinnaker was successful in submission or participation in the Apparent High Bid (AHB) on a total of 42 blocks; 32 in deep water and 10 on the shelf. Spinnaker's net exposure to the AHBs is approximately $28.8 million. Spinnaker's AHBs were submitted on 24 blocks where it anticipates that it will act as operator (17 blocks in deep water and 7 blocks on the shelf). Spinnaker's working interest (WI) averages approximately 77% on those blocks.

Spinnaker participated in 18 AHBs where it anticipates being non-operator; where its WI averages approximately 42%. Additionally, Spinnaker has the right to participate as non-operator in four additional deep water blocks with a 25% WI should certain AHBs be awarded.

If awarded, the AHBs represent approximately 234,000 gross acres and 146,000 acres net to Spinnaker. Before any awards from OCS Sale #182, Spinnaker owns approximately 1,100,000 gross acres and 630,000 net acres in the Gulf of Mexico.

Spinnaker's AHBs in shallow water primarily relate to its deep shelf plays. The Company's AHBs in deep water are concentrated in the Mississippi Canyon and Atwater Valley protraction areas. The Company made 11 AHBs in the general area of its recent Seventeen Hands discovery.