ATLANTIC OILFIELD SERVICES

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Darcy Cole
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1 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 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 the first nine months of 2006 consolidated revenues for the period ending 30 September 2006, were USD 15.6 million. The operating profit before depreciation and amortization (EBITDA) was USD 3.2 million and the operating profit was USD 0.6 million. Amortization and depreciation were USD 2.6 million. Net financial expenses were USD 2.3 million and the net loss for the period was USD 1.6 million. As of 30 September 2006, total assets amounted to USD million. Non-current assets amounted to USD million, of which USD 92.4 million is the carrying amount of Atlantic Rotterdam and Atlantic Venture. Cash and cash equivalents as at 30 September 2006 were USD 12.8 million. Total liabilities as of 30 September 2006 were USD 43.8 million. As of 30 September 2006 the Company had a total equity of USD 98.5 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 3 rd quarter 2006 Total revenues for 3 rd quarter 2006 were USD 11.9 million. Operating profit before depreciation and amortization (EBITDA) was USD 1.5 million and the operating loss was USD 0.1 million. Pre-project cost related to the Atlantic Venture has been expensed with USD 1.1 million and technical problems encountered in moving Atlantic Rotterdam has reduced the operating profit by USD 1 million during 3 rd quarter Net financial expenses was USD 0.9 million and the net loss for the period was USD 1 million. Pro forma results for the first nine months of 2006 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, for the first nine months of 2006, pro forma revenue of USD 26.7 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 6.5 million and a pro forma operating profit of USD 2.9 million. Profit before taxes was USD 0.5 million. Amortization and depreciation were USD 1.8 million including amortization of USD 0.8 million of management contracts that were allocated fair value in the business combination. Pro forma net financial expenses for the period were USD 2.3 million and pro forma profit for the period 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 Venture is an Earl & Wright Sedco 700 series rig built in It is currently located at Hamriyah port, Dubai and being prepared for upgrading and refurbishment. AOS is actively marketing the Atlantic Venture for work in drilling mode with several strong leads in place. 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. 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 until March In second quarter 2006 AOS entered into a three-year contract extension with Maersk until March 2010, in the same region.

3 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. 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. Outlook The Company foresees continued strong industry fundamentals. The increased global exploration activity leads to an increase in opportunities for oil service companies. Atlantic Oilfield Services is expecting to benefit from its favorable position in The North Sea and the Middle East in securing profitable growth. 30 November 2006 Board of Directors of

4 Financial Statement The consolidated financial statements for 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 first nine months of The result from the Atlantic Marine Services Group of companies have been included as from 3 rd quarter Accounting Policies The interim financial statement should be read in conjunction with the report of 30 June 2006 where the accounting policies of Atlantic Oilfield Services Consolidated are outlined. Consolidated income statement Jul-Sept 2006 Feb-Sept 2006 Jan-Sept 2006 Amounts in '000 USD IFRS IFRS IFRS Pro forma Revenue Gain on sale of rig Total operating income Rig operating expenses (7 152) (8 424) (15 516) Depreciation and amortization (1 650) (2 559) (3 618) Other operating expenses (3 189) (3 910) (7 199) Total operating expenses (11 991) (14 893) (26 333) Operating profit (121) Net financial income/ (expenses) (950) (2 259) (2 310) Profit/(loss) before taxes (1 071) (1 600) 542 Income tax - - (159) Net profit/(loss) (1 071) (1 600) 383 Net earnings per share (USD) Basic earnings per share (0.016) (0.028) Diluted earning per share (0.016) (0.028) Number of shares ('000) Weighetd average number of shares outstanding

5 Consolidated balance sheet Amounts in '000 USD 30. Sept 06 IFRS ASSETS Non-current assets Goodwill Other intangible fixed assets Tangible fixed assets Other non-current assets - Restricted cash Total non-current assets Current assets Accounts receivable Receivables from related parties 805 Other current assets Cash and cash equivalents Total current assets Total assets EQUITY AND LIABILITIES Equity Share capital Additional paid in capital Retained earnings (1 600) Translation adjustments (15) Total equity Non-current liabilities Long term borrowings Deferred tax liability 921 Total non current liabilities Current liabilities Trade and other payables Debt to related parties 824 Short term provisions Total current liabilities Total equity and liabilities

6 Consolidated cash flow statement Amounts in '000 USD Feb-Sept 06 IFRS Cash flow from operating activities Profit/ (loss) from operations (1 600) Adjustments for Depreciation and amortization Amortization of bond discount 173 Changes in assets and liabilities: Trade receivables (292) Other current assets (730) Trade payables 244 Short term provisions Other assets and liabilities (5 726) Net cash flow from operating activities (1 260) Cash flow from investing activities Funding of restricted cash account (2 542) Net cash acquired from business combinations Purchase of PP&E (93 263) Net cash flow used in investing activities (91 339) Cash flow from financing activities Proceeds from share issuance, net of trasaction costs Proceeds from issue of bonds Proceeds from issuance of dectacable warrants Net cash flow from financing activities Effect of exchange rates on cash (3) 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 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 (15) (15) Net profit/(loss) for the period - - (1 600) (1 600) Equity 30 September (1 600) (15) Number of shares a USD 0.02 / ('000) Ordinary Share issues Private placement (6 March 2006) Share purchase agreement Total number of shares

ATLANTIC OILFIELD SERVICES

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