KS Energy-Sinwa JV Incorporated in Singapore

The Board of Directors of KS Energy Services Limited said that KS' joint venture company with Sinwa Limited has been incorporated in Singapore as Yakki International Pte. Ltd. Yakki was formed following a Sept. 21, 2006, announcement by KS Energy. Also on that date, KS Energy, announced the acquisition and subsequent chartering of a new self-propelled offshore jack-up rig to a Central America-based national oil company for use in the Gulf of Mexico.

KS Energy and Sinwa each have subscribed for 250,000 shares in the capital of Yakki International Pte. Ltd. at a subscription price of US$1 per share in cash. Yakki International Pte. Ltd. is now an associated company of KS Energy.

The subscription was funded by internal resources.

The transaction is not expected to have any material effect on the net earnings per share and net tangible assets per share of the Company for the financial year ending Dec. 31, 2006.

None of KS Energy's directors or substantial shareholders has any interest, direct or indirect on the abovementioned transaction.

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