Deep Sea Supply Nixes Newbuilding Contract with Jaya

Deep Sea Supply has cancelled the contract with Jaya Shipbuilding and Engineering Pte. Ltd. ("Jaya") pursuant to which Deep Sea Supply was to take delivery of Hull No 875 tbn "Sea Hawk 1". The cancellation is based on substantial delays beyond the revised, contractual delivery
date. Deep Sea Supply has made pre-delivery installment payments to Jaya in the amount of US $3,6 million, which are to be refunded in full.

Deep Sea Supply has not entered into any employment contract in contemplation of contractual delivery, and, therefore, suffers no exposure to any non-performance claim.

The latest information available suggests that Hull No. 878 (tbn "Sea Eagle 1") will be delivered by Jaya in April 2009 as scheduled.