BW Offshore: In negotiation for a new FPSO contract

(Oslo, June 27, 2006) Bergesen Worldwide Offshore Ltd. (BWO) has signed a letter of intent with Peak Petroleum Industries Nigeria Ltd. and Equator Exploration Ltd. in which the purpose is to provide common terms and provisions to negotiate an agreement for an FPSO at the Bilabri Field, offshore Nigeria.
Peak and Equator (the `Companies`) intend to produce oil from the Bilabri Field, located in Block OML 122, offshore Nigeria with proven recoverable reserves of 45 million barrels of oil and 730 BCF of gas. BWO will use the FPSO BW Endeavour for the services and operations at the Bilabri Field. The BW Endeavour will have to undergo a general upgrade before commencement of production on the field.
The intended terms and provisions of the contract are the lease and operation of an FPSO for a firm period of 5 years with the Companies option to extend the contract for up to an additional 5 years. The operation on the Bilabri field is intended to commence mid 2007 at an estimated 30,000 barrels of oil per day. The hire rate will consist of a fixed day rate plus a production incentive rate. The nominal value of the fixed day rate in the contract including the 5 year option period is approx. USD 240 million. BWO expects, that when the FPSO is ready and producing at the field, the fixed day rate in the contract will generate an annual EBITDA of USD 16.5 million. In addition BWO will receive the production incentive rate which will be charged on a dollar per barrel of oil produced basis.
Mr Svein Moxnes Harfjeld, CEO of Bergesen Worldwide Offshore comments:
"We are delighted to sign an LOI with Peak and Equator to develop the FPSO application for the Bilabri field offshore Nigeria. It is an exciting prospect that is also fast track. First oil is set for mid 2007, something which is made possible by offering our existing FPSO, BW Endeavour. The FPSO will undergo a general upgrade in Singapore due to commence in September this year. The final contract will form part of BW Offshore's business goal for 2006 to secure 2 new FPSO contracts."
Background information
Equator Exploration Limited
Equator engages in the exploration and development of oil and gas projects in highly prospective West Africa. Equator's objective is to build a diversified portfolio of exploration, appraisal and production assets in the region. The Company has exploration interests in the territorial waters of Nigeria and of São Tomé & Príncipe as well as in the Joint Development Zone between the two countries.
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For further information, please contact:
For BW Offshore
Mr. Svein Moxnes Harfjeld
BW Offshore
Tel: +47 2212 0400
Fax: +47 2212 0401
Mobile: +47 4140 4886