Mosvold News

MIS Co. Ltd. Inc. (OSE: MIS) reported record fourth quarter and fiscal year revenues of $125.1m and $387.5m, respectively and closes 2008 with a net profit of $8m and a record quarterly net profit of US$8m in Q4. This strong revenue increase and highest ever quarterly net profit is primarily driven by closing increasing volumes of contracts for the New Build Rigs value stream while maintaining MIS' market share in its traditional works value streams: Rig Refurbishment, EPC and Site Projects, Pressure Vessel, Process and General Fabrication and Technical and Safety Services. The first New Build Rig to be delivered by MIS (Hull #104) was completed with the issue of an ABS Class Certificate and formal Acceptance for Delivery Protocol agreed with MIS' client Seawolf Oilfield Services.

Norwegian crude oil tanker group Frontline will bid 5.5 Norwegian crowns a share, (a total of about $46.53 million), for its tiny rival Mosvold Shipping. Frontline said in a statement that the merger would continue consolidation of the fragmented tanker industry. It said the offer represented a 34-percent premium over Mosvold's average closing price for the last 30 days on the Oslo stock exchange. It already controls 12 percent of Bermuda-registered Mosvold. Mosvold's fleet comprises two 1970s VLCCs and three on order. Frontline said that a main condition was that at least 95 percent of Mosvold shareholders accept the offer. The offer document would be sent to all Mosvold shareholders this week with an acceptance period of two weeks.

Shipping and offshore shares performed well in March with an increase in the Shipping Index of 2.3 percent. The Oslo market as a whole fell 2.2 percent, much due to the world-wide price fall for the IT and telecom sector. Despite the uncertainty about the outcome of the OPEC meeting on March 27 and 28, a number of offshore shares rose significantly during the month. Even though the oil price fell slightly as a result of the meeting, it is obviously within a price range that is considered as comfortable by investors. The two share classes in Smedvig (SME and SMEB) were both up about 19 percent in the period, topping the long list of positive performers in the offshore sector. All but five of the listed offshore shares increased their value during March.

The Shipping Index at the Oslo Stock Exchange performed well in the quite summer month of July, rising 2.7 percent, and thus again lifting the maritime sector of shipping, offshore and cruise shares above the levels of year-end 1999. Within the sector, 29 shares rose during the month, while only 12 decreased in market value. Among the offshore stocks, Nortrans Offshore (NOL) were again strong, as in May, after a 10 percent fall in June. With a rise of 23 percent it ended as the month's winner. Also Havila Supply (HAV) rebounded strongly from a rather poor June performance, while Northern Offshore (NOF) only continued its upward trend.

According to Rigzone, Gulf Capital has acquired, as part of a large investment consortium, a 21% stake in Maritime Industrial Services Co. (MIS) was acquired as part of a larger private placement that raised $80 million for MIS on the Norwegian over the counter (OTC) market. The private placement will enable MIS, which provides a fully integrated onshore and offshore engineering, procurement, fabrication, construction and shipyard service, to capitalize on the current boom in offshore oil explorations and allow it to enter in a major way into the rig manufacturing business. The current high demand for oil and gas has resulted in an unprecedented amount of offshore exploration activities and boosted worldwide offshore rig utilization to 86%, one of the highest levels ever.

ABB has been awarded contracts worth $110 million to supply electrical power systems for twelve vessels and five offshore drilling rigs. • Total electrical power system packages for two semi-submersible drilling rigs for subsidiaries of Jon Fredriksen controlled SeaDrill Ltd (Subsea Drilling (III) Ltd and Subsea Drilling (IV) Ltd). The rigs will be built at South Korea’s Daewoo Shipbuilding and Marine Engineering, based on a GVA 7500 design with the first rig delivery in early 2008. • Total electrical power system package for one semi-submersible drilling rig for PetroRig I Pte Ltd/PetroMena ASA under management by Larsen Oil & Gas.

ABB has been awarded contracts worth $140 million to supply its Azipod® propulsion systems for three vessels and electrical power systems for 11 vessels and two semi-submersible drilling rigs. Six 10 Megawatt (MW) Azipod propulsion units for three Arctic shuttle tankers being built for Russia’s Sovcomflot at Samsung Heavy Industries in South Korea for delivery between 2007-2009. The order also includes main generators, main switchboards, propulsion transformers, propulsion drives and propulsion and remote control systems from ABB. One drilling vessel for Norway’s Mosvold Drilling, also to be built at Samsung Korea. The ABB scope includes generators, thruster motors, main switchboards and transformers.

Shares in Norwegian tanker group Frontline jumped 4.8 percent on the back of strong first quarter results and renewed confidence in the tanker market, analysts said. Frontline shares were up 9.0 Norwegian crowns ($0.990) amid heavy trading, after hitting a year high of 198 earlier in the session. The share had a year low on February 1 at 102.50 crowns. The total index at the Oslo bourse was up 1.3 percent. "Firstly, the increase is driven first by the first-quarter results Frontline presented yesterday, which were very good and above expectations," Ole Richard Hammer, an analyst with Pareto, said. "Secondly, we are at the threshold of summer, which is usually a good period in the tanker market and adds to the confidence investors have in Frontline." he said.

Shipping and offshore shares performed well in March with an increase in the Shipping Index of 2.3 percent. The Oslo market as a whole fell 2.2 percent, much due to the world-wide price fall for the IT and telecom sector. Despite the uncertainty about the outcome of the OPEC meeting on March 27 and 28, a number of offshore shares rose significantly during the month. Even though the oil price fell slightly as a result of the meeting, it is obviously within a price range that is considered as comfortable by investors. The two share classes in Smedvig (SME and SMEB) were both up about 19 percent in the period, topping the long list of positive performers in the offshore sector. All but five of the listed offshore shares increased their value during March.

Frontline has entered into an agreement to sell one of its 2000-built Suezmax tankers, Front Archer. Front Archer was designed and built with future employment as shuttle tanker in mind and is equipped with controllable pitch propeller and thruster tunnel. It is the buyer's intention to use the vessel in shuttle operations. Frontline took delivery of the Front Archer in February 2000 and the vessel has traded in the spot market from delivery. The vessel is expected to be delivered to the buyer in July/August 200. Frontline expects to book a profit of approximately $20 million and to release about $ 32 million in liquidity. Frontline did not fully utilize the technical capacity of Front Archer in regular trading.

Frontline Ltd.'s board has finally approved to participate with a 33% interest in a consortium, which will be established to buy 4 VLCCs from Bergesen for a total price of $321 million. The remaining interest in the joint venture will be taken up by other partners in Tankers International. The ships will be financed through the joint venture and it is anticipated that Frontline's equity investment in the 4 ships will be less than $35 million. The board of Frontline Ltd. has further agreed to acquire 47.2% of the K/S parts in the K/S "Moseagle Invest K/S". The K/S controls a VLCC newbuilding scheduled to be delivered from Samsung in Korea in November 2001. Through its investment in Mosvold Shipping Frontline already controls the remaining 52.8% of the K/S.