SCAN Rejects Deep Sea Supply's Payment Claim for 3 Newbuilds

Reference is made to a contract entered into between Deep Sea Suply Management AS (DESS) and SCAN Geophysical ASA (SCAN) on June 2, 2006 for acquiring three of its shipbuilding contracts with ABG Shipyard in India.

Part of the settlement, according to the contract, is US $4.1 million per vessel to be paid from SCAN to DESS upon delivery of each vessel or alternatively if SCAN and ABG Shipyard have agreed to postpone the delivery date for the vessels by more than 90 days due to change orders from SCAN. An invoice has been received from DESS claiming immediate payments for all the vessels under construction and alleging that the vessels are delayed by more than 90 days due to SCAN's change orders.

SCAN has fully rejected such claim and sees no support for such claim under the said contract.