SeaBird Wins Principal Action in GGS Arbitration

Silver Queen Maritime Limited, a fully owned subsidiary of SeaBird Exploration Limited (BVI), is acquitted in the principal action raised by Global Geo Services ASA ("GGS") in the court of arbitration in Oslo, Norway. The ruling cannot be appealed.

As previously disclosed, GGS presented substantial claims in the arbitration proceedings against SeaBird. The main claim in the principal action was unlawful withdrawal of the lease of M/V Geo Mariner in 2005, amongst other things including (a) a claim for compensation in the amount of US$4.3 million and (b) the right to a 50% ownership of the vessel and 50% of the future earnings of the vessel upon expiration of the charter agreement.

Based on legal advice, SeaBird has been comfortable throughout that this claim was unlikely to be successful. However, the company said that it is a relief to get this confirmed by the court of arbitration. GGS is also required to compensate SeaBird for all legal costs related to the principal action.

The arbitration proceedings included a number of other claims and cross-claims, with various results. In total, SeaBird will charge a loss of around US$5 million in the Q4 financial statements, related to GGS, including the loss on investment in GGS shares, write off of receivables refused in arbitration result and other GGS related items. All substantial parts of this loss are non-cash.

Dag Reynolds, Chief Executive Officer of SeaBird commented:

"Our involvement with GGS has certainly not been a pleasant experience and has taken a lot of management resources. However, we are happy to see that the court of arbitration supported our view in the principal action and removed the question of the ownership to M/V Geo Mariner erroneously raised by GGS."