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Cyprus, 18 November 2011 - Reference is made to the stock exchange notices dated 8 August 2011 and 3 October 2011 regarding SeaBird Exploration PLC's ("SeaBird" or the "Company") evaluation of financing alternatives and the signing of a letter of intent (the "LOI") with Fugro Norway AS ("Fugro") regarding sale of the OBN business. SeaBird is pleased to announce that it has now entered into a share and purchase agreement (the "SPA") with Fugro on 18 November 2011.

In order to complete the Fugro Transaction (as defined below) SeaBird has approached Norsk Tillitsmann ASA (the "Bond Trustee") with a proposal to be put forward to the bondholders in the SBX01 RET (ISIN 001 032604.4) and SBX02 RET (ISIN 001 035391.5) (collectively the "Bond Loans"), comprising a restructuring of the Company's  financial debt, as described below (the "Restructuring Plan"). The Company has also approached the bondholders in the Perestroika convertible loan (the "Perestroika CB") and the PGS convertible loan (the "PGS CB") (collectively including the Bond Loans, the "Unsecured Creditors") to attain their acceptance of a plan for restructuring of the Company (the "Restructuring Plan").

The Restructuring Plan comprises the following elements (as described below):

  1. The Fugro Transaction
  2. The New Equity
  3. The Use of Proceeds
  4. The Exchange Bond

Bondholders representing over 2/3 of both Bond Loans, the bondholder under the Perestroika CB and the bondholder under the PGS CB have granted their pre-acceptance to the Restructuring Plan.

Fugro Transaction

As set out in the SPA, Fugro will acquire SeaBird Technologies AS and Seabed Navigation Co Ltd which collectively hold all of the Company's rights and assets related to the OBN business for the agreed acquisition price of USD 125 million (the "Fugro Transaction"). In addition, the Company will enter into a time charter agreement with Fugro for the vessel Munin Explorer for a firm period of three years and a further time charter agreement for a second vessel for a firm period of one year, plus one year plus one year in charterers' option. The contract value for the firm part of these two contracts will be in the range of USD 75 million. The Company will also provide services to Fugro required to operate the OBN business for a firm period of 6 months plus 6 months at Fugro's discretion.

The SPA includes certain conditions precedent for closing of the Fugro Transaction, such as inter alia that the Company will continue as a going concern following the Fugro Transaction and that key creditors agree on distribution of proceeds from the Fugro Transaction. The Fugro Transaction is expected to close within two to four weeks.

New Equity

SeaBird has approached its existing key shareholders and proposed to raise new common equity in conjunction with the Fugro Transaction and the debt restructuring. The Company has received pre-subscriptions for  USD 6 million in new Equity (the "New Equity") at a subscription price of NOK 0.25 per share. The equity proceeds, together with the proceeds from the Fugro Transaction will be used to redeem financial indebtedness and strengthen the Company's liquidity position. The Company expects to call for an EGM to be held on or about 8 December 2011.

Use of Proceeds

At the time of entering into the LOI, Fugro acquired 11% of the two OBN subsidiaries, SeaBird Technologies AS and Seabed Navigation Co Ltd, and transferred USD 13.75 million to the Company. This was required to improve the Company's liquidity situation during the due diligence phase. About USD 4.7 million of the USD 13.75 million was used to reduce the Sparebanken 1 SMN/Glitnir and the Standard Chartered Bank facilities (the "Senior Facilities"), while the remaining has been used to repay overdue trade creditors and to improve the Company's working capital position.

The Company intends to use the remaining proceeds (89%) from the Fugro Transaction and proceeds from the New Equity to (the "Use of Proceeds") inter alia (i) repay the Senior Facilities in full, (ii) repay overdue trade creditors to an acceptable level, (iii) retain a working capital and liquidity buffer for the Company of USD 12.5 million, and (iv) partially redeem the Unsecured Creditors on a pro rata basis with all remaining proceeds, expected to give a partial redemption of around 32% of the principal amounts (the "Partial Redemption").

The Exchange Bond

To implement the Restructuring Plan, holders in each of the Bond Loans and the PGS CB are asked to accept a mandatory exchange of their remaining bonds (following the Partial Redemption), including accrued and unpaid interest held as at the exchange date, into a single new senior secured USD denominated bond (the "Exchange Bond"). The Exchange Bond will have a tenor of 4 years and carry a coupon of 6.00% p.a., with semi-annual interest payments. The Exchange Bond will inter alia be granted first priority security in the four wholly owned vessels, Harrier Explorer, Aquila Explorer, Osprey Explorer and Northern Explorer. The expected size of the Exchange Bond is USD 92 million, dependent on the USD/NOK exchange rate at the exchange date and the final Partial Redemption. The Company expects to summons for bondholders' meeting on or about 23 November 2011, with the bondholders' meetings to take place approximately one week later.

Conditions

The completion of the Restructuring Plan as presented above is conditional and subject to certain conditions precedent being satisfied within 31 December 2011, such as inter alia:

  1. Bondholder Meetings in each of the SBX01 Bond and the SBX02 Bond approving the Restructuring Plan;
  2. The PGS CB approving the Restructuring Plan and approving a similar restructuring plan of outstanding principal and accrued interest under the PGS CB;
  3. The Perestroika CB approving the Restructuring Plan and approving to remain in the Perestroika CB at current terms following the pro rata Partial Redemption;
  4. The Company has made all the necessary corporate resolutions required to implement the Restructuring Plan;
  5. Minimum USD 6.0 million in New Equity; 
  6. No new information with respect to the Issuer is disclosed before implementation of the Restructuring Plan, resulting in material adverse change in the premises on which the Restructuring Plan is intended; and
  7. Until the restructuring is completed, the bondholders waive any Event of Default having occurred or threatening under the bond agreements of the Bond Loans.

For further information, please contact:

Tim Isden

CEO SeaBird Exploration

Phone: +971 504 539075

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 pursuant to section 5-12 of the Norwegian Securities Trading Act.