Statoil Enters LOI to Buy More Time for Songa Trym

Songa Offshore has entered into a letter of intent with Statoil for the semisubmersible Songa Trym for operation in the Norwegian North Sea. The letter of intent is subject Statoil's partners' approval by November 19, 2009. The current contract expires February 1, 2011, while the renegotiated contract has extended the termination date until July 1, 2012, partly in exchange for a reduction in the dayrate for the remaining originally contracted period. The contract value for the period from December 1, 2009 until July 1, 2012 is US $344 million.

In addition Statoil has an option for one or two additional years, such option to be exercised by July 1, 2011.

If Statoil elects to exercise the option period, any cost associated with continued maintenance of the AOC from the Petroleum Safety Authority Norway will be amortized and added to the day rate over the option period.

Additional upgrade to enhance the rig's subsea completion capabilities is under evaluation by Statoil, and any cost for this upgrade will be paid by Statoil under an amortization schedule for the remaining firm period of the contract.

The current manager of Songa Trym, Odfjell, will continue to manage the rig under a revised operating agreement between Songa and Odfjell with reduced management fee.