In accordance with the sales agreements dated December 15 and 16, 2008 with Thule Drilling, Royal Oyster has evidenced their commitment to fulfill their part of the agreement by depositing the first instalment of US $9 million into a UAE bank. The payment will be released by Royal Oyster as soon as they receive confirmation from Thule Drilling and its creditors that the sales agreements will be honored.

This decision now rests firmly with Norsk Tillitsmann (NT) and the bondholders, who up to now, have refused to cooperate and instead have decided to issue an arrest order on Thule Power.Thule has also advised NT and the bondholders about a long term charter opportunity that Royal Oyster is negotiating with an oil major. Royal Oyster risks to lose this opportunity if the arrest is not withdrawn very soon. This fact is presently also being ignored by NT and the bondholders. The arrest order makes it difficult for Thule to maintain and preserve the present condition of Thule Power, which is technically complete. The situation right now is that third party suppliers, once again, are left in the dark as to when they can complete commissioning of the rig and also worry whether or not they will be paid. Each day work is delayed on Thule Power can mean weeks of delay, because suppliers disappear and maintenance may become inadequate. Weeks of delay could soon turn into months.

Through the correspondence with NT and the bondholders, it is apparent that they are trying to force Thule to accept terms which will demolish what remains of shareholder value and push Thule into bankruptcy. This strategy has been confirmed by NT's law firm, BAHR, who only weeks ago through Dagens Naeringsliv encouraged Thule to do just that, i.e. file for bankruptcy. Thule rejects this encouragement by BAHR on the grounds that the sales agreements, now honored by Royal Oyster, means that the company's balance sheet is adequate, even though the shareholders in Thule have suffered substantial losses.

As much as Thule would like to find an amicable way forward and complete Thule Power in accordance with the sales agreements, the actions by NT and the bondholders make this very difficult, and very soon impossible.

Both Thule and Royal Oyster regret the situation and expect and demand that Norsk Tillitsmann and the bondholders release Thule Power in order for the transactions contemplated by agreements to be completed. Further delays of funds into Thule will escalate the detrimental effects on both the bondholders and the shareholders.

Tags: Thule Drilling