Update of the IOT Group - The OilService Division of Petrolia

Independent Oil Tools AS (IOT) in Stavanger is the parent of The IOT Group involved in various Oilservices worldwide.

The market for Oilservices have increased considerable the last year after the fall in the oilprice in 2009. A high drilling activity level is expected for many years both in Norway and in most Exploration and Production areas.

The new Board of Directors and Management of Petrolia have for the last 2 years restructured and refocused the IOT Group which is now showing positive results.

Revenue for 2011 is about USD 80 mill and EBITDA about USD 30 mill and budget for 2012 is USD 90 mill and USD 40 mill respectively. EBITDA in 2010 was USD 5 mill after impairments of receivables with USD 26 mill.

During the last 7 years equipment in excess of USD 200 mill funded by Petrolia have been purchased for the services provided by IOT Group. Book value of equipment is about USD 60 mill per 31.12.11 based on 5 years depreciation. Economic life of the equipment is 10 - 20 years. Petrolia will now refinance part of this funding, presently about USD 100 mill, to provide funding for the E&P activity, by issuing bonds, bank financing, private equity or similar financing.

The Board is now analysing strategic options both with respect to equity and debt.

Contact:

   Kjetil Forland, Managing Director (kjetil.forland@petrolia.no)

   Sølve Nilsen, Finance Manager (solve.nilsen@petrolia.no)