Marine Log

May 26, 2006

Drillship order to be acquired

Elder Trading Co., a Liberian corporation, has offered to acquire the entire share capital of Ferncliff Drilling ASA.

Ferncliff Drilling was initiated and founded by Oystein Spetalen and associates in 2006 and is listed on the Norwegian OTC market.

Ferncliff Drilling has entered into a turnkey Letter of Intent with Samsung Heavy Industries for construction of a 6th generation ultra deepwater drill ship, described by Samsung as the world's largest. According to a Norwegian OTC company announcement, the letter of intent includes an option for a second ship.

Elder Trading has offered $1.25 per share for Ferncliff, an offer which values the company at $137.5 million. So far, shareholders holding more than 85% of the shares in Ferncliff Drilling ASA have accepted the offer to sell.

In the event that Elder Trading Co. is unable to acquire all the shares of Ferncliff Drilling ASA prior to the completion date, it intends, following completion, to make a mandatory bid to the remaining non-selling shareholders to acquire their shares at the original bid price.

Elder Trading Co has furthermore agreed to pay a one-time compensation to Ferndrill Management AS of $2 million to cancel all obligations towards Ferndrill Management AS under the marketing and management agreement entered into between Ferncliff Drilling ASA and Ferndrill Management AS.