EMGS Announces Cancellation of Contract in Asia

Reference is made to the stock exchange notice dated 2 August 2012 regarding a contract worth approximately USD 7 million for the vessel EM Leader in Asia. The contract has been cancelled in mutual understanding with the customer due to unforeseen delays in obtaining the government permits required to operate EMGS’s vessel and equipment in the survey area.

“We have in partnership with the customer done our utmost to overcome the unprecedented permitting challenges we have encountered in this new country of operation for EMGS. However, we had no other choice but to cancel the project for reasons beyond our or the customer’s control,” said Roar Bekker, CEO of EMGS.

Delaying the survey in anticipation of the required permits was not a viable option due to a combination of the following factors: the operational weather window in the survey area, constraints on the timing of the customer’s exploration decisions and the fact that EMGS has committed to a USD 20 million project in Brunei with start-up no later than mid-October.

Revenues in the third quarter will as a consequence of the above be lower than previously indicated, as will costs thanks to the flexibility EMGS has in the charter hire agreement for the EM Leader.

EMGS expects that the survey in Brunei will commence in early October.

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Press Release, September 10, 2012