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Execution of Tender Rig/Shareholders' Agreements by Mermaid

Back Oct 24, 2007

Ref: COR:MS/EL07025e/ms

22 October 2007

Subject: Execution of New Build Tender Rig Agreement, Shareholders Agreement, and Options Assignment Agreement by Mermaid

To: The President of the Stock Exchange of Thailand

Ref: Disclosure of Information No. COR:MS/EL07024e/ms dated 19 October 2007 in relation to New Build Tender Rig Order and Newly Incorporated Subsidiary of Mermaid Maritime Public Company Limited

Thoresen Thai Agencies Public Company Limited ("TTA") would like to confirm that on 22 October 2007, Mermaid Kencana Rig 1 Pte. Ltd. ("MKR1"), a newly incorporated subsidiary of Mermaid Maritime Public Company Limited ("MMPCL"), has signed the following contracts:

a) The Shareholders' Agreement in respect of MKR1 between Mermaid Drilling (Singapore) Pte. Ltd. ("MDS") and Kencana Petroleum Ventures Sdn. Bhd. ("KNPV"); and

b) The Agreement for the Design, Construction, and Completion of a Self Erected Tender Rig and Derrick Equipment Set (together the "New Build Tender Rig") between Mermaid Kencana Rig 1 Pte. Ltd. ("MKR1") and Kencana HL Sdn. Bhd. ("KNHL")

This is consistent with the signing schedules notified in the earlier said report to the Stock Exchange of Thailand ("SET").

Change of Shareholdings in MKR1

MKR1 was incorporated on 19 October 2007 as a wholly owned subsidiary of MDS with an issued share capital of USD 100 (United States Dollars One Hundred Only) divided into 100 shares of USD 1.00 (United States Dollars One) each.

As a result of the signing of the Shareholders' Agreement, MDS sold 25% of the equity in MKR1 to KNPV, and KNPV now owns 25% of the equity in MKR1 and MDS owns the remaining 75%.

The value of the consideration paid was USD 25.00 (United States Dollars Twenty Five Only) received in cash being the cost of 25 shares with a par value of USD 1.00 (United States Dollars One Only) each.

Cont. 2.../

Thoresen Thai Agencies Public Company Limited
Page 2
Ref. No. COR:MS/EL07025e/ms

 

Future capitalization in MKR1 shall be made by MDS and KNPV in proportion to their above mentioned new shareholding percentages in MKR1, with the total capitalization to be dependent upon the split between equity and commercial bank debt required to fund the purchase by MKR1 of the New Build Tender Rig, including any working capital requirements.

Re: The Options Assignment Agreement between MKR1, MDS and KNHL

Apart from the above two contracts which have been signed on 22 October 2007, the Options Assignment Agreement between MKR1, MDS, and KNHL in respect of options to order additional new build tender rigs was also signed on the same day.

In the earlier said report to the Stock Exchange of Thailand, the Agreement for the Design, Construction, and Completion of a Self Erected Tender Rig and Derrick Equipment Set between MKR1 and KNHL contains clauses for the exercise of options by MKR1 to order up to three (3) additional new build tender rigs from KNHL.

Under the Options Assignment Agreement, MKR1 will assign the options and all rights, interests, responsibilities and liabilities associated therewith to MDS and KNHL will consent to this assignment.

The rationale for the assignment is that MDS acts as the holding company for Mermaid's foreign partnerships and investments in drilling and drilling - related services. MKR1 will be the special purpose company that owns the first New Build Tender Rig. Future drilling rigs will be owned by other newly incorporated subsidiaries of MDS, and therefore MDS should be able to assign these options to other subsidiaries. This complies with Mermaid's policy on the corporate structure of such investments. Mermaid will make an announcement each time the options are exercised, and TTA will report the exercise of options by MDS (if any) in accordance with the Rules, Procedures, and Disclosure of Information of the SET in due course.

 

Yours faithfully,
Thoresen Thai Agencies Public Company Limited

 

_____________________________
M.L. Chandchutha Chandratat
Managing Director
_____________________________
Ms. Nuch Kalyawongsa
Director, Group Finance/Accounting

 

Note:
Disclosure of Information by MMPCL on the Singapore Exchange ("SGX-ST") can be viewed at:

http://info.sgx.com/webcorannc.nsf/b3b0c35c9025f91e4825735f00232564/ 154534bf089a011b4825737c004d3cbe?OpenDocument

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