Larsen, PetroProd I Sign Lease/Operation Contract on PetroProd FPSO

Larsen Oil & Gas and PetroProd I Ltd have signed a MoU with an undisclosed operator for a 5 year lease/operation of the PetroProd I FPSO currently undergoing conversion work at Jurong Shipyard in Singapore. Completion of the FPSO is scheduled complete to client specification 1st Q 2009. Anticipated 1st Oil is scheduled late 1st half/early 2nd half of 2009. FPSO income will generate from delivery from shipyard.

The parties continue exclusive negotiations with the aim to reach final agreement by 30th June 2008.