Contract alteration for Songa Mercur

Songa Offshore ASA has received notified from Chevron Australia Pty. Ltd. that the operator has elected to terminate the contract for the Songa Mercur due to late rig delivery.

Offshore staff

OSLO, Norway -- Songa Offshore ASA has received notified from Chevron Australia Pty. Ltd. that the operator has elected to terminate the contract for the Songa Mercur due to late rig delivery.

Santos, which was co-contracting the rig with Chevron for two-thirds of the time in the original contract, will now enter into a direct contract with Songa Offshore for the rig on similar terms as the original Chevron contract. The only exception to the original contract is that the fixed term for Santos is per the outset of the Chevron contract (i.e., an initial firm period of 270 days with an option for a further 90 days at the same rate, followed by two 6-month options at market rate).

The contract with Santos will begin as soon as the rig is ready for departure from Singapore, which is now expected to be late June, Songa says.

6/19/2007

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