Northern Offshore contracts GSF Arctic II

Northern Offshore has entered into a $155 million drilling contract with AGR Peak Well Management for the use of the semisubmersible GSF Arctic II in the North Sea.

Offshore staff

HOUSTON -- Northern Offshore has entered into a $155 million drilling contract with AGR Peak Well Management for the use of the semisubmersible GSF Arctic II in the North Sea. Northern Offshore has agreed with an affiliate of Transocean Inc. to acquire the rig and expects to close on the purchase in 4Q 2008. Following the closing, the rig will be renamed the Energy Atlas.

The drilling contract is for a period of one year. It is anticipated that the vessel contract will begin near year-end 2008 and follow in direct continuation of the rig's current contract backlog after a brief handover period from Transocean.

The company also reported that a 145-day commitment it had entered into for theEnergy Searcher to begin in mid-July has been terminated as a result of the counterparty's inability to deliver the required financial guarantees.

08/25/2008

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