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The conversion of the M/T Arc is continuing according to a revised schedule, with planned completion somewhat later than original plan.
This rescheduling is as a result of PetroProd's decision not to install more of the equipment on board than needed for some selected field applications. The main component deliveries are continuing according to plan and the co-operation with the shipyard is working well. Vessels operations
The M/T Archimid and the M/T Trust are laid up in Batam, Indonesia, close to Singapore. The Company has decided to divest these vessels and is in dialogue with several potential buyers.
Drilling & Production Jack-ups (MSC/Gusto CJ70)
The work on the 1st CJ70 is progressing on schedule. At this point in time, the Company foresees no delay to the delivery date (mid 2010).
PetroProd continue to work together with the shipyard and key vendors to contract a 2nd identical unit for delivery mid 2011.
For the operation of the jack-ups, PetroProd considers a co-operation with other drilling contractors in Norway/North Sea.
Market Situation
The credit crunch has put all industry players in a difficult financial situation. The Company has therefore implemented tighter control over cashflow management, and is in the progress of negotiating with the shipyard and major suppliers for rescheduling of installment payments.
Financial Information The net result for the 3rd quarter 2008 was USD 2.9 million, compared to USD -19.6 million in the 3rd quarter of 2007. There was substantial unrealized exchange gain and derivative gain in the convertible bond loan denominated in Norwegian Kroners (NOK) during the 3rd quarter of 2008.
The Company is expected to improve its results after taking delivery of the FPSO and the CJ70.
Enclosure: Preliminary results for 3rd quarter 2008
Contact person: Mr. Martin Nordaas, phone +65 91383188
12 November 2008
Board of Directors
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