SeaBird - Vessel acquisition, evaluation of financing alternatives and debt specification

Cyprus, 8 August 2011

SeaBird Exploration PLC ("SeaBird" or "SBX") is pleased to provide an operational update regarding its business activities and an update regarding the ongoing evaluation of financing alternatives;

VOYAGER EXPLORER AND THE GEO MARINER
A three  (3) year bareboat contract has been entered into between SBX as disponent owners and Koleth Singapore (Pte) Ltd as owners for the charter by an SBX subsidiary of the 2D/3D shallow water 4 streamer 2005 built vessel "Voyager Explorer" (ex "Veritas Voyager") to replace the "Geo Mariner" in the SBX fleet. The contract contains three (3) further one year options to extend at SBX's discretion. The vessel has now sailed from the yard after some minor upgrades and will be rigged with equipment from the "Geo Mariner" over the next 2 weeks before mobilizing for her first survey.

Capital expenditure for the vessel for year 2011 will be between USD 1.5m and USD 2.0m, and the "Geo Mariner" will not proceed with her scheduled docking but be derigged and deactivated and her equipment utilised.

On 4th July, SBX announced the award of 2 contracts for 2D/3D surveys in the Far East with total contract values of USD 25m to 30m. Approximately half of this will now be carried out by the "Voyager Explorer".

The "Voyager Explorer" will first sail to Malaysia for a 485 sqkm 3D 2 streamer survey, and then mobilize to Australia for a 2,000 lkm 2D survey followed by a 3D 4 streamer survey for a minimum 600 sqkm with possible extensions. The additional streamer sections required will be leased. The vessel will be employed until end Q4-11 on the confirmed contract scope of work.

Management sees the retirement and replacement of the "Geo Mariner" as a natural forward step for SBX, and whilst the "Geo Mariner" has served the company well in performance since year 2000, it is seen that there are better opportunities in the market for a modern 4 streamer shallow water vessel, both in revenue level and as regards potential employment.

A photo of the vessel is attached.

FINANCING UPDATE
Reference is made to the announcement made on 13 July 2011 regarding the Postponement of the Bond due 14 July 2011 with 2 months until 14 September 2011 and the subsequent approval from the bondholders.

SeaBird is, together with its advisors, evaluating several alternatives to strengthen the Company's financial position going forward. As a part of this process, and alongside other alternatives, SeaBird has initiated processes that might lead to a sale of assets. Such alternatives will be evaluated against all other options with the overall goal of maximizing shareholders values and meeting the financial obligations of the Company. SeaBird has appointed ABG Sundal Collier Norge ASA and Fearnleys Fonds ASA as financial advisors in this process.

Following the bareboat contract for the Voyager Explorer and the retirement of the Geo Mariner, SeaBird has the following financial debt instruments (pro forma as of 8 August 2011:

- USD 8.75 million bank debt with Standard Charter Bank
- USD 39.8 million bank debt with BN Bank as agent
- NOK 400 million unsecured bond loan
- NOK 81.75 million unsecured bond loan (Net 78.75)
- USD 42.9 million unsecured convertible loan from PGS
- USD 21.5 million unsecured convertible loan from Perestroika
- USD 17.7 million in financial lease obligations

USD 8.75 million bank debt with Standard Chartered Bank
The loan has first priority mortgages of Northern Explorer and Geo Mariner and matures at 31 August 2011 USD 1.25 Million and 30 September 2011 remaining USD 7.5 million. The interest rate is Libor + 4.5 %.

USD 39.8 million bank debt with BN Bank as agent
The loan has first priority mortgages of Osprey Explorer, Aquila Explorer, Harrier Explorer, and certain other encumbrances including the node equipment and technology. The loan is payable quarterly in arrears every 14 March, 14 June, 14 September, and 14 December and matures 14 September 2014 with a remaining balance of USD 11.7 million. Quarterly instalments are USD 2.3 million. The interest rate is Libor + 7.5%.

NOK 400 million unsecured bond loan (FRN SeaBird Exploration Ltd Callable Bond Issue 2007/2012)
The loan is unsecured and repayable in full on 14 February 2014. Interest rate is 3 months NIBOR + 6.50% plus PIK interest rate of 2%. The bond loan is traded on the Oslo Exchange Alternative Bond Market.

NOK 81.75 million unsecured bond loan (FRN SeaBird Exploration Ltd Open Bond Issue 2006/2009)
The loan is unsecured. The loan at net NOK 78.75 million (SeaBird is owner of NOK 3 million of the bond) has extended maturity to 14 September 2011, with a repayment price at 104% of par value. The Company has the option to exercise a call option to redeem the remaining Loan in whole or in part before 1 August 2011 at a price of 101% of par value and before 1 September 2011 at a price of 103% of par value.  Interest rate will be adjusted to 3 months NIBOR plus 9.25% accruing from 14 July 2011. The bond loan is traded on the Oslo Exchange Alternative Bond Market.

USD 42.9 million unsecured convertible loan from PGS
SeaBird entered into an agreement for a strategic cooperation with Petroleum Geo-Services ASA (PGS) on 25 January 2011. In conjunction with this agreement, SeaBird issued a five year convertible loan of NOK 240 million, later converted to USD 42.9 million, directed towards PGS with a conversion price of USD 0.5993 per share. The conversion price will be adjusted in the event of an equity issue in SeaBird between 25 July 2011 and 25 January 2013 if the price is set below the conversion price. The adjusted conversion price will be set equal to the price in the equity issue. The same adjustment principal will apply for convertible instruments with a strike lower than USD 0.5993.  The annual interest of 9% can be paid in cash or in kind is payable semi-annually every 30 June and 31 December. The loan can at any time be converted into ordinary shares until the maturity date on 25 January 2016.

USD 21.5 million unsecured convertible loan from Perestroika
Following the conversion of the currency from NOK to USD the principal amount is USD 21.5 million maturing in full on 22 September 2014. The loan can at any time be converted into ordinary shares at a conversion price of USD 0.5993 per share until the maturity date. The annual interest remains unchanged at 1% and can be paid in cash or in kind.

USD 17.7 million in lease financial lease obligations
SeaBird has USD 17.7 million in financial lease obligations relating to an eight years Bare Boat Agreement with Hawk Explorer AS, owned by Global Skipsholding 1 AS, ending November 2014. The rate is USD 13,950 per day payable monthly in advance. SeaBird has annual purchase options in November on a declining scale, reduced to USD 6 million at the end of the charter.

For further queries contact:

Tim Isden
CEO SeaBird Exploration
Phone: +971 504 539075

Kai Solberg-Hansen
CFO SeaBird Exploration
Phone: +47 920 51 455

SeaBird Exploration PLC "SeaBird" is a global provider of marine solutions for seabed acquisition of 3D/4C/4D multimode seismic data with OBN operations, marine 2D and 3D seismic data, and associated products and services to the oil and gas industry. SeaBird specializes in high quality operations within the high end of the source vessel and 2D market, as well as in the shallow water 2D/3D market. Main focus for the company is proprietary seismic surveys (contract seismic). Main success criteria for the company are an unrelenting focus on Health, Safety, Security, Environment and Quality (HSSEQ), combined with efficient collection of high quality seismic data.

All statements in this press release other than statements of historical fact are forward-looking statements and are subject to a number of risks, uncertainties and assumptions that are difficult to predict, and are based upon assumptions as to future events that may not prove accurate. These factors include SeaBird's reliance on a cyclical industry and the utilization of the company's vessels. Actual results may differ substantially from those expected or projected in the forward-looking statements. 

 This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act)