ATLANTIC OILFIELD SERVICES

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Aubrey Marshall
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1 ATLANTIC LTD Report for the 4 th quarter 2006 Company Background Atlantic Oilfield Services Ltd ( AOS ) is an integrated oil service company owning and operating onshore and offshore drilling units as well as offshore accommodation rigs. The Company provides rig management and support services for the oil and gas industry. The management team has extensive offshore engineering and project management experience, having managed numerous rig refurbishment projects and deployments for major national and international oil companies. The Company was incorporated on 20 February 2006 and subsequently entered into a share purchase agreement with the founders and owners of the Atlantic Marine Services group of companies. The Company s acquisition was completed on 30 June Financial Information Statutory results for 2006 Atlantic Oilfield Services Ltd consolidated revenues for 2006, were USD 23.4 million. The operating profit before depreciation and amortization (EBITDA) was USD 5.4 million and the operating profit was USD 1.4 million. Pre-project cost related to the Atlantic Venture has been expensed with USD 1.2 million. Amortization and depreciation were USD 4 million. Net financial expenses were USD 3.2 million and the net loss after tax was USD 1.6 million. As of 31 December 2006, total assets amounted to USD million. Non-current assets amounted to USD million, of which USD 95.2 million is the carrying amount of Atlantic Rotterdam and Atlantic Venture. Cash and cash equivalents as at 31 December 2006 were USD 10.2 million. Total liabilities as of 31 December 2006 were USD 50.9 million. As of 31 December 2006 the Company had a total equity of USD 98.6 million. Warrants given to the founders of the Company during the Private Placement expired in September 2006 since the vesting conditions were not met.

2 4 th quarter 2006 ATLANTIC Total revenues for 4 th quarter 2006 were USD 9.4 million. Operating profit before depreciation and amortization (EBITDA) was USD 2.2 million and the operating profit was USD 0.7 million. Net financial expenses were USD 0.9 million and the net loss after tax was USD 0.02 million. Pro forma results for Pro forma 2006 accounts are prepared to reflect the accounts for the Atlantic Oilfield Services group of companies ( AOS Group) as if the acquisition of the Atlantic Marine Services group of companies had been completed within 1 January The AOS Group had a pro forma revenue for 2006 of USD 32.1 million and a gain on sale of the land rig IR-900 of USD 2.5 million. The rig was sold to Addax in January The income statement shows a pro forma operating profit before depreciation and amortization (EBITDA) of USD 8.7 million and a pro forma operating profit of USD 3.6 million. Amortization and depreciation were USD 5.1 million including amortization of USD 1.4 million of management contracts that were allocated fair value in the business combination. Pro forma net financial expenses for the period were USD 3.3 million and pro forma profit after tax was USD 0.4 million. Operations, management contracts and rig status The Company is strategically positioned in the Middle East and the North Sea with the head office in Dubai and branch offices in Amsterdam, Esbjerg and Oslo. The Company has a non-speculative business strategy aimed at taking advantage of attractive commercial opportunities in the Marine and Oil & Gas Industry. Through its subsidiaries, AOS owns a semi submersible rig, Atlantic Venture, and a jack-up rig, Atlantic Rotterdam. Atlantic Rotterdam is a jack-up accommodation unit with 135 beds of the Gusto-MSC design. The rig is currently on contract with Maersk in the North Sea. The rig is employed through March 2009 in additon to a third optional year.

3 Atlantic Venture is an Earl & Wright Sedco 700 series rig built in The rig has been located at Hamriyah port, Dubai. The rig is now being transported from Dubai to Cape Town where the rig will be prepared for upgrading and refurbisment. Main items with long lead time have been secured. Further refurbishment obligations and corresponding financing needs will be based on a contract for the rig. AOS is also actively marketing the Atlantic Venture for sale. Safe Esbjerg: The Company has the operational management of the accommodation jack-up rig Safe Esbjerg for Consafe in the North Sea. This is a 3-year firm contract expiring July Alborz: The Company had the complete management services, including provision of qualified personnel, catering, spare parts, logistics and technical services, of the offshore jack-up drilling rig Alborz operated by Iranian Offshore Oil Company in the Persian Gulf. This contract expired in October Bennevis: The Company entered into a marketing and management contract with Gulf Petroleum Investment, which commenced in mid May The contract enables the Company to widen its relationship with major oilfield operators in the area. GPI has concluded a 2 year contract with Petzed in the Gulf of Suez,commencing in October after the current program with Gupco is completed. IR-900: The Company has a management contract for the onshore drilling rig owned by Addax in Kurdistan. The contract commenced in mid May 2006 initially for 6 months with likely extension thereafter. Prior to this, the Company prepared and sold the rig to Addax. The second well completed successfully, and the rig s activity is likely to continue to end Outlook The Company foresees continued strong industry fundamentals. The increased global exploration activity leads to an increase in opportunities for oil service companies. The company has experienced interest from a number of external parties the last few months. The board has therefore decided to adress this interest with a structured process aimed at inviting interested parties to bid for the companys shares. 28 February 2007 Board of Directors of Atlantic Oilfield Services Ltd

4 Atlantic Oilfield Services Ltd 4th quarter report Consolidated income statement Amounts in '000 USD IFRS IFRS IFRS Pro forma Revenue Other income Gain on sale of rig Total operating income Rig operating expenses (5 854) (12 731) (17 403) Depreciation and amortization (1 480) (4 039) (5 098) Other operating expenses (1 324) (5 235) (8 523) Total operating expenses (8 658) (22 005) (31 024) Operating profit Net financial income/ (expenses) (945) (3 204) (3 255) Profit/(loss) before taxes (231) (1 831) 311 Income tax Net profit/(loss) (22) (1 622) 360 Net earnings per share (USD) Basic earnings per share (0,000) (0,027) Diluted earning per share (0,000) (0,027) Weighted average number of shares

5 Atlantic Oilfield Services Ltd 4th quarter report 2006 Consolidated balance sheet ATLANTIC Amounts in '000 USD IFRS ASSETS Non-current assets Goodwill Other intangible fixed assets Property, plant and equipment Other non-current assets 223 Restricted cash Total non-current assets Current assets Accounts receivable Other current assets Cash and cash equivalents Total current assets Total assets EQUITY AND LIABILITIES Equity Share capital Additional paid in capital Retained earnings (1 622) Translation adjustments 133 Total equity Non-current liabilities Long term borrowings Deferred tax liability 690 Total non current liabilities Current liabilities Trade payables Other payables Total current liabilities Total equity and liabilities

6 Atlantic Oilfield Services Ltd 4th quarter report Consolidated cash flow statement Amounts in '000 USD IFRS Cash flow from operating activities Profit/ (loss) from operations (1 622) Adjustments for Depreciation and amortization Amortization of bond discount 271 Changes in assets and liabilities: Trade receivables (801) Trade payables Other assets and liabilities (8 397) Net cash flow from operating activities (4 360) Cash flow from investing activities Funding of restricted cash account (5 178) Net cash acquired from business combinations Purchase of PP&E (97 480) Net cash flow used in investing activities (98 192) Cash flow from financing activities Proceeds from share issuance, net of trasaction costs Proceeds from issue of bonds Proceeds from credit facility Proceeds from issuance of detachable warrants Net cash flow from financing activities Effect of exchange rates on cash 33 Net change in cash and cash equivalents Cash and cash equivalents at the beginning of the period - Cash and cash equivalents at the end of the period

7 Atlantic Oilfield Services Ltd 4th quarter report Consolidated statement of change in equity All amount in '000 USD Share capital Other reserves Retained earnings Translation adjustment Total equity Incorporation Private placement, net of transaction costs Share based payments, incl. in transaction costs Share issued in business combination Warrants issued in business combination Detachable warrants issued with bonds Currency translation differences Net profit/(loss) for the period - - (1 622) (1 622) Equity 31 December (1 622)

8 Notes to condensed interim financial statements Basis of preparation The consolidated financial statements for Atlantic Oilfield Services Ltd are prepared in accordance with International Financial Reporting Standards (IFRS). The Company s statutory accounts represent the total activities of the Company as from the effective date of establishment of 20 February Consequently there are no comparable figures for The result from the Atlantic Marine Services Group of companies have been included as from 3 rd quarter Significant accounting principles The interim financial statement should be read in conjunction with the audited report of 30 June 2006 where the accounting policies of Atlantic Oilfield Services Consolidated is outlined. Reclassifications Certain revenues and expenses presented gross in previous quarters in 2006 has been netted in the year-to-date financial statements as a result audit adjustments. The total amount netted in previous quarters amounted to USD 1.2 million. Property, Plant & Equipment During the 4th quarter 2006, the Company has invested USD 3.7 million of equipment for upgrading the Atlantic Venture in preparation of securing a contract for the rig. Additionally, the Company has prepaid USD 5.3 million on equipment with long expected lead times. Financing The Company has secured a credit facility of USD 20 million for the purposes of performing the planned upgrades on Atlantic Venture. The interest on the credit facility is LIBOR plus 1.9%. The credit facility has a maturity of 4 years with a declining maximum credit amount. Under the terms of the credit facility, the Company has deposited USD 2.5 million in a restricted account. In December 2006, the Company borrowed USD 7.5 million under the credit facility in order to provide payments on the investments described above. Subsequent events In January 2007, the Board of Directors decided to actively market Atlantic Venture for sale.

ATLANTIC OILFIELD SERVICES

ATLANTIC OILFIELD SERVICES LTD Report for the 3 rd quarter 2006 Company Background ( AOS ) is an integrated oil service company owning and operating onshore and offshore drilling units as well as offshore accommodation rigs. The