Former Australian Navy Vessel to Become FPSO

AGR Group, the Norway-based oil technology and services group and Helix Energy Solutions Group, Inc., a Houston-based energy services company, have jointly acquired a fuel supply vessel from the Australian Commonwealth Government, the "Westralia," previously used by the Royal Australian Navy, with the intent to convert the vessel into a Floating, Production, Storage and Offloading vessel (FPSO).

The FPSO, to be renamed Shiraz, will be marketed broadly to oil and gas operating companies throughout SE Asia as an early production system or extended production test vessel. Shiraz may be used by operators in the short term to evaluate the longer term production potential of their fields and reduce their dependence on appraisal drilling in the currently tight rig market. It will also allow operators with limited financial capacity to realize early cash flows from their assets at a cost that is a fraction of competing systems.

The 34,000 DWT ex-naval fuel supply vessel was built in 1979 in the Cammel Laird shipyard in the UK. The vessel, which has been maintained to the highest standards by the Royal Australian Navy and is in exceptional condition, will be sailed to a secure shipyard facility in Indonesia where preparations will be made for conversion. An extensive feasibility study is already complete and front-end engineering design for the conversion will commence immediately.

Sverre Skogen Chief Executive Officer of AGR Group said:

"This deal is in line with AGR's strategy with regards to facilities and field development opportunities, based on new and cooperative business models. Shiraz presents oil companies with a solution that allows discoveries to be put into early production or production tested without a large upfront capital spend, and I am delighted that AGR Group and its newly-acquired subsidiary Upstream Petroleum will be working with one of the world's largest offshore installation contractors, Helix, on this exciting project."

Bart Heijermans Chief Operating Officer of Helix said:

"Shiraz fits our strategy as a developer of marginal fields very well. This acquisition furthers the expansion of our services in the SE Asia region where we already have (i) Helix RDS, our reservoir engineering and well technology consulting business, (ii) a controlling interest in SEATRAC, a well services and intervention company that has become part of our global Well Ops business and (iii) Fraser Diving via our majority ownership in Cal Dive International. We are very pleased to work on this project with AGR Group and its Upstream subsidiary, businesses that are focused on providing value added services for oil and gas producers and good future partners of Helix for the provision of bundled services related to the development of marginal fields."

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