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Marine Log

April 26, 2007

Tidewater announces record earnings--and an internal probe

Tidewater Inc. (NYSE:TDW) today reported fourth quarter net earnings for the period ended March 31, 2007, of $87.6 million, or $1.56 per share, on revenues of $293.5 million--but, in a separate announcement, it also revealed that it is conducting an internal investigation of its Nigerian operations.

The investigations focus on the legality, under the U.S. Foreign Corrupt Practices Act (FCPA) and local laws, of the reimbursement by Tidewater's Nigerian affiliate of certain expenses incurred by a customs agent in connection with the temporary importation of its vessels into Nigeria, particularly the obtaining of certain permits necessary for its vessels to operate in Nigerian offshore waters.

The audit committee of the board has engaged Steptoe & Johnson of Washington, D.C., a law firm with significant experience in investigating and advising on FCPA matters, to lead the investigation.

The audit committee commissioned the internal investigation in late February 2007 after management brought to its attention a settlement earlier that month of well-publicized criminal FCPA proceedings (the second in recent years) involving Vetco Gray Controls, a Houston-based oil service company with substantial operations in Nigeria.

Tidewater's management and the audit committee were concerned that the company's Nigerian affiliate used the same third-party agent for its temporary importations into Nigeria thought to be significantly implicated in the 2007 Vetco Gray proceedings.

As a result of its ongoing internal investigation, Tidewater says it has has become aware that certain practices followed by its Nigerian affiliate or its agents in connection with temporary importation permits, "while perhaps consistent with the practices of others seeking such permits in Nigeria," will have to be changed in order for the company to ensure full compliance with the Foreign Corrupt Practices Act, and other applicable laws. The audit committee and management will work together with special counsel and appropriate personnel within the company to implement appropriate corrective measures.

Tidewater says it has has voluntarily contacted the Securities and Exchange Commission and the U.S. Department of Justice to advise both agencies that an internal investigation is underway and that it intends to cooperate fully with both agencies.

Tidewater says "the internal investigation continues, and no conclusion can be drawn at this time as to whether either agency will open a proceeding to separately investigate this matter, or, if a proceeding is opened, what potential remedies these agencies may seek. In addition, although management will seek to avoid material disruption to its Nigerian operations, the company can not gauge at this time the ultimate effect of implementing the necessary corrective measures for its business in Nigeria. Tidewater has determined that given the status of the investigation, it is premature for it to determine whether it needs to make any financial reserve for any potential liabilities that may result from these activities.

Meantime, Tidewater's fourth quarter net earnings for the period ended March 31, 2007, of $87.6 million, or $1.56 per share, on revenues of $293.5 million compared with same quarter last year net earnings of $64.7 million, or $1.11 per share, on revenues of $246.5 million. For fiscal year ended March 31, 2007, net earnings were $356.6 million, or $6.31 per share, on revenues of $1,125.3 million. For the fiscal year ended March 31, 2006, net earnings were $235.8 million, or $4.07 per share, on revenues of $877.6 million.

Included in the year ended March 31, 2007, results is an after-tax gain of $20.8 million, or $.37 per common share, (recorded in the second and third fiscal quarters), related to the sale of 14 of its offshore tugs for a total cash price of $43.7 million.

Also included in the fiscal 2007 results (recorded in the fourth fiscal quarter), is a $3.5 million pre-tax charge to vessel operating costs for the company's share of a deficit in an industry-wide multi-employer retirement fund in the United Kingdom. This is in addition to a $3.8 million pre-tax charge taken by the company during the second quarter of fiscal 2006 related to the then deficit in this same fundsued during the respective time periods.

Included in the year ended March 31, 2006, results is an after-tax gain of $42.8 million, or $.74 per common share (recorded in the second fiscal quarter of 2006), related to the July 2005, sale of six of its KMAR 404 class of Anchor Handling Towing Supply vessels to Deep Sea Supply ASA for a total cash price of $188 million.

"With another quarter of outstanding financial results, this fiscal year ended March 31, 2007, was the very best in the 51-year history of this company," commented Dean E. Taylor, Chairman, President and CEO. "These results are reflective of our recent efforts to execute on our strategic plan to renew and upgrade our fleet to be better positioned to service the growing international marine transportation needs of our customers."

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