Cyprus: SeaBird Exploration Plc 3Q 2010 Highlights and Operational Update

SeaBird is to announces a Q3 report with an EBITDA of USD 7.9 million.

• The OBN operation with Hugin Explorer and Kondor Explorer was successfully completed for Chevron North Sea Limited west of Shetland well within schedule 12 August 2010. A new survey for Shell Nigeria Exploration & Production Company Limited started 15 September 2010.

• SeaBird issued a NOK 120 million convertible, non-transferable loan in favour of Perestroika AS with three years maturity. The loan may be converted to shares in SeaBird, up to 23 August 2013 at NOK 3.35 per share. The loan carries an interest rate of 1%. The loan is unsecured, and is provided for general corporate purposes.

• SeaBird concluded a restructuring in September of its bank debt of USD 46.9 million to a bank consortium with BN Bank as agent a new repayment profile of five years, with a balloon after two years (September 2012) and the first quarterly instalment in December 2010. The loan carries an interest rate of three months US Libor plus a margin of 4%.

The vessel utilization for the 9 seismic vessels operated by SeaBird for Q3 2010 was 66%, down from 76% in Q1 and Q2 2010.

The Ocean Bottom Node operations with the Hugin Explorer deploying, retrieving and maintaining the nodes and the accompanying source vessel have continued to perform well throughout Q3 2010 with minimum downtime at a combined utilization of 99%. The OBN contract for Chevron on the Rosebank field west of Shetland was successfully completed ahead of schedule on 12 August with 761 out of 762 nodes delivering high quality data. Kondor Explorer was used as source vessel up to 12 August when it was replaced by Munin Explorer. A new OBN survey commenced on 15 September for Shell Nigeria Exploration & Production Company Limited in Nigeria, and operations have so far been running as planned with no significant disruptions, and is expected to be completed by second half of November 2010. SeaBird is presently pursuing further OBN employments and there are opportunities that may materialize into continued employment in line with the OBNs performance since its inception in Q4 2008. Contracts have not yet been executed for these opportunities.

Utilization of the 2D/3D and Source vessels in Q3 2010 was 62%, down from 71% in Q2 2010. The main reason for the reduced utilization is that Kondor Explorer was laid up in a cold stacked mode from 12 August, Hawk Explorer has been idle but maintained in a standby mode with significantly reduced crew and cost since mid July, and Aquila Explorer was almost 5 weeks off-hire for dry docking and classification.

The rest of the fleet has performed well with Harrier Explorer on 97% utilization, Northern Explorer 81%, Osprey Explorer 76%, Geo Mariner 71% (shallow water 3D), and Munin Explorer on 71%, including the time she was source vessel for the OBN operation.

For the 2D/3D and Source fleet, the backlog has not developed as positively as expected partly due to the aftermath of the Macondo incident in GOM. While Harrier Explorer is continuing on a long term contract to PGS through August 2011, the Geo Mariner is on contract to beginning of January 2011, the Aquila Explorer to mid December 2010 and Northern Explorer to 2nd half of November 2010. The Osprey Explorer incurred an unexpected idle period from late September due to a postponement of a 2D contract offshore Madagascar. The vessel will be maintained in a standby, but off hire mode, with reduced cost, while other potential work is being pursued.

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Source: SeaBirdExploration, November 4, 2010;