Petrolia Drilling Increases Stake in Petrojack to 39.93%

Petrolia Drilling ASA has on February 1, 2007 entered into an agreement to purchase 25,000,000 shares in Petrojack ASA by way of a share capital increase of 163,204,747 new shares in Petrolia Drilling.

Petrolia Drilling has entered into an agreement to purchase 25,000,000 Petrojack shares from IOT Holding ASA for a total consideration of NOK 550,000,000(equal to NOK 22.00 per Petrojack share). As compensation for the Petrojack shares, Petrolia Drilling has issued 163,204,747 new Petrolia Drilling shares at NOK 3.37 per share to IOT Holding ASA. The price per Petrojack share and the price per Petrolia Drilling share equals the closing prices on Oslo Bors on February 1, 2007.

Following the purchase of Petrojack shares, Petrolia Drilling holds 25,946,200 shares in Petrojack, corresponding to 39.93% of the shares outstanding. Petrolia Drilling holds no options, warrants or rights to further shares in Petrojack.

Petrolia Drilling has issued the new shares based on an authorization given to the board of directors of Petrolia Drilling by the general meeting on June 22, 2006.

Following registration of the new shares, the share capital of Petrolia Drilling will increase from NOK 424,695,999 to NOK 506,298,372.5, and the number of shares, each with a par value of NOK 0.50, will increase from 849,391,998 to 1,012,596,745.

The new shares in Petrolia Drilling issued in the private placement will not be listed and tradable on Oslo Bors until a listing prospectus has been approved. These new shares will therefore carry a separate ISIN (NO 001 0354038) until approval of the listing prospectus. The new Petrolia Drilling shares will in all other respects carry the same rights as the existing Petrolia Drilling shares upon registration of the share capital increase in the Register of Business Enterprises ("Foretaksregisteret").

The investments in Petrojack will give Petrolia Drilling exposure to modern jackup rigs at attractive terms.

Following this transaction, Petrolia Drilling will have a diversified exposure to the offshore industry with a combination of new building of modern floaters and jack-ups, rental business as well as near term cashflow from existing units.