LOI for Thule Power Cancelled

In January 2006, Thule Drilling announced the reward of a Letter of Intent (LOI) with a major national oil company for Thule Power. This LOI did not materialize into a contract as the Board decided not to accept the client's request for an extension, enabling the Company to pursue an alternative employment opportunity for a long term contract on similar or better commercial terms.

Negotiations on technical, legal and commercial details have been ongoing with this oil company since mid February, but ended last Friday following the other party's withdrawal. Their decision was solely due to that the expected delivery schedule for Thule Power in their opinion would not meet their requirements.

In the short perspective, the Board is not pleased with this delay in the contracting of Thule Power as it will postpone the company s plan for listing on the Oslo Stock Exchange. On the other hand, the jackup marked is constantly strengthening and this gives Thule Drilling the possibility to exploit alternative and better employment opportunities.

Based on the latest facts, the Board of Directors believes that Thule Power will be completed and ready for drilling in the end of October 2006, to a cost not exceeding contract price including budgeted contingency.

Considering the shortage of suitable jack-ups in the market, the Board is confident that alternative employment on acceptable terms will be found.

The Board has decided to postpone the application for listing on the Oslo Stock Exchange until a suitable employment is in place for Thule Power.

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