Title XI Funding
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Marine Log

May 9, 2007

Jurong wins order for largest jackup ever

Norwegian OTC-listed PetroProd Ltd (PROD), which is managed by Larsen Oil & Gas, reports that it has entered into a contract with Jurong Shipyard for the construction of an enhanced class CJ70 jackup rig with delivery mid-2010.

The unit will comply with Norwegian sector regulations and, according to PetroProd, "will be the largest jackup rig ever constructed."

The CJ70 jackup rig is a large, harsh environment drilling rig that is also capable of hosting production equipment enabling combined and simultaneous drilling and production.

Jurong Shipyard, a subsidiary of SembCorp Marine says the contract is worth $442 million and is subject to certain conditions being met by June 30, 2007 or as mutually extended.

PetroProd says the total estimated delivered project cost for the CJ70 amounts to approximately $560 million including supervision, management and capitalized interest costs.

The funding requirements during the first half of the construction phase will be financed through a $80 million equity private placement and a new bond Issue of a minimum $185 million.

The equity private placement is closed at a subscription price of NOK 11.30 per share (42.5 million new shares). The equity private placement is conditional upon the new bond issue. PetroProd has identified a number of employment opportunities on the Norwegian sector for a large jackup like CJ70 capable of providing combined and simultaneous drilling and production. The company expects to be able to secure a long-term drilling and production contract ahead of additional funding requirements.

Pareto Securities ASA acts as financial advisor in relation to the equity and bond private placements.