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Cougar Ace Situation Update

Maritime Activity Reports, Inc.

August 3, 2006

A Unified Command of federal, state and shipping company representatives continues to make efforts to right the ship Cougar Ace and plan contingencies for towing to an appropriate port of refuge if those efforts are not effective. These efforts are in response to the vessel's July 24 listing in the North Pacific Ocean. With the arrival of a new naval architect and an additional team of salvage professionals at the scene late tonight, a second, more extensive examination of the vessel will take place. Two pumps and other needed equipment were off-loaded from the Makushin Bay onto the Cougar Ace on Tuesday night for an intended rigging of pumps to begin this afternoon. Another pump is still to be placed on board. The pumps will be set up in series to allow them to function more effectively. Plans call for the pumping of water from the number nine cargo deck which is at the waterline, to the number five starboard ballast tank to help improve the ballast condition and further stabilize the ship.

Several ports in Alaska are under consideration as a destination for the vessel which remains stabilized approximately 106 miles south of Herbert Island. The Coast Guard cutter Morgenthau remains on-scene as well as the tug Sea Victory which arrived at the site from Seattle on Tuesday and has replaced the tug Emma Foss in holding a tow line rigged to the Cougar Ace.

An additional private vessel, the tug Gladiator, has left Anacortes, Wash., and is en route to assist with transporting the vessel if needed. The vessel has similar capabilities to the Sea Victory. According to Incident Commander Capt. Mark DeVries of the United States Coast Guard, a decision on where and how to tow the ship could still be days away. Depending on several factors including weather, the determined condition of the ship, success of at-sea salvage operations and the port selected, transit time for the Cougar Ace to the chosen port could be 5-6 days or more.

Weather on-site is expected to deteriorate, with southeast winds at five knots becoming southwest at 15-30 knots and shifting north to northwest late. Seas are at one foot with three foot swells. The seas will increase slightly with higher winds. It is overcast with visibility reduced to one nautical mile currently. However, the Unified Command does not expect that these conditions will slow the project or create special concerns relative to the condition of the vessel. Weather conditions are expected to improve Thursday.

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