PCPP Nixes Drilling Contract for Naga 2 Jackup Offshore Sarawak

Standard Drilling has made reference to its announcement dated August 12, 2008 in respect of the award of a contract by PCPP Operating Company Sdn Bhd ("PCPP"), a joint venture between Petronas Carigali (Malaysia), Petrovietnam (Vietnam) and Pertamina (Indonesia), to UMW Standard Drilling Sdn Bhd, a Malaysian joint venture between UMW Corporation Sdn Bhd and Standard Drilling ASA, for the provision of Jackup Drilling Rig "NAGA 2" for PCPP's Block SK 305 Exploration and Development Drilling Programs, Offshore Sarawak, for a total contract value of approximately US $170 million.

Standard Drilling  has received notification to the effect that the above mentioned Contract will not be implemented by PCPP and has been terminated. However, pursuant to new scope of works being drawn up under new contracts for drilling activities, UMW Standard Drilling Sdn Bhd is in discussions and negotiations with other PSC (production sharing contracts) Operators in Malaysia in respect of NAGA 2. Standard Drilling ASA expects NAGA 2 to be in operation by September 2009.