Norway: Dolphin Increases Seismic Vessel Fleet with M/V Artemis Arctic and M/V Artemis Atlantic

Dolphin to charter M/V Artemis Arctic and M/V Artemis Atlantic

* Time-Charter from Artemis Shipping AS the 3D Vessel Artemis Arctic for 5 years and the 2D ice class long offset vessel Artemis Atlantic for 4 years

* Purchase of existing Multi Client data and developed projects for USD 3,3 million

* Transfer and continuation of existing acquisition contracts and back-log for the two vessels

* Ownership transfer of all seismic equipment onboard the two named vessels

* Long term equipment financing secured with SpareBank 1 SR-Bank and SpareBank 1 SR Finans in the amount of NOK 84 million and Drawing Facility established in the amount of USD 5 million

Atle Jacobsen, CEO commented;

In our continuing efforts to build a new leading Geophysical company, this opportunity to secure additional vessel capacity that will be operating immediately, is highly attractive to Dolphin. The financial terms for the two charters and related financing is very competitive and these vessels will fit well into our existing fleet and secure significant capacity and revenue growth for the company based on the existing capital structure of the Dolphin Group. We are pleased to recruit, consolidate and welcome new experienced employees into our organization and to ensure the new vessels will be profitable in a market where we expect stronger demand for seismic services.

Dolphin Group ASA (Dolphin) experience a strong demand for its services and target to expand in a strong seismic market with the objective to position ourselves as a recognized and effective geophysical company. As part of this growth strategy, Dolphin have entered into long term charter agreements for two additional existing seismic vessels to increase its seismic fleet capacity. These vessels were offered to Dolphin by SpareBank 1 SR-Bank, as part of a restructuring arrangement with one of their clients.

Dolphin will together with Artemis Shipping and associated service providers ensure the full and continuing operation of each vessel and take the responsibility for the vessel operations.

Effective immediately, Dolphin has entered into agreements with Artemis Shipping AS (owned by SpareBank 1 SR-Bank) to Time-Charter the M/V Artemis Arctic (3D) for the initial firm period of 5 years with additional 2 times 2 years option. Dolphin have an option to upgrade the vessel to 8 streamer capacity, where the ship owner provide financing for the minor upgrade against an uplift in charter rates. Similar Time-Charter agreement has been entered into for the ice classed 2D vessel M/V Artemis Atlantic has been entered into a firm period of 4 years with 2 times 2 years option period. The bareboat element of the Time-Charter will be at a day-rate of USD 25.000 for the two vessels combined.

The M/V Artemis Atlantic will continue to acquire an existing 2D Multi Client program in West Africa. Dolphin will also purchase approximately 5.500 line kilometers of data already acquired, for the total amount of USD $3.3 million . The purchase includes the transfer of all permits, licenses, pre-funding arrangements, Multi Client prospects and existing plans for project expansion. Furthermore, Dolphin will relocate the 3D vessel M/V Artemis Arctic to the North Sea to complete the existing back-log of contracts, commencing operations end of May 2011.

Dolphin will take over ownership of all seismic equipment onboard the two vessels, which will be fully financed with a 5 year financial lease arrangement with SpareBank 1 SR-Bank and SpareBank 1 SR Finans for the amount of NOK 84 million with interest terms of NIBOR plus 2,75% per annum.

Following this transaction, Dolphin and SpareBank 1 SR-Bank will enter into a standard term Drawing Facility for the amount of USD 5 million.

Dolphin does not intend to raise new equity capital in connection with the transaction. The company is continuously considering further growth expansion for the Group, through organic growth in the high-en 3D market segment as well as potential mergers or acquisitions that may involve new equity offerings or issuing of new shares as considerations.

Source: dolphingeo ,May 09, 2011;


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