DEEP Superior Offshore Intl (MM)

HOUSTON, Jan. 9 /PRNewswire-FirstCall/ -- Superior Offshore International, Inc. (NASDAQ:DEEP) today announced that it has reached definitive agreements with Hornbeck Offshore Services LLC, a wholly owned subsidiary of Hornbeck Offshore Services, Inc. (NYSE:HOS) ("Hornbeck"), for the sale and charter-back of the Superior Achiever, a DP-III deepwater construction and dive support vessel that is under construction and is expected to be delivered in late 2008. Under the agreements with Hornbeck, Superior Offshore will receive approximately $70 million in cash, which represents its investment to date in the new vessel. Superior Offshore will use the proceeds of the sale to repay its $55 million term loan obligation to Fortis Bank and will pay down substantially all of its outstanding borrowings under its senior secured credit facility with JPMorgan Chase Bank. Following the completion of the sale and the application of the proceeds, Superior Offshore will have no outstanding term debt and will have reduced its 2008 capital requirements by approximately $30 million. Closing is subject to customary conditions, including obtaining third-party consents, and is expected to occur on or before January 21, 2008. Hornbeck has agreed to a five-year time charter for the Superior Achiever or another acceptable vessel. Superior Offshore will have the option to terminate the charter with 90 days' advance notice prior to the end of each six-month period within the term. Superior Offshore and Hornbeck also have agreed to explore non-exclusive joint marketing and cooperation agreements for new business opportunities that would utilize the complementary resources of the two companies. The vessel - which will keep the name, Superior Achiever - will be capable of working in harsh or deepwater environments. Superior Offshore expects to deploy the vessel by the end of this year to international markets and/or deepwater Gulf of Mexico projects. "We are pleased to sign this definitive agreement with Hornbeck, one of the world's leading new-generation vessel operators," said Jim Mermis, Superior Offshore's President and Chief Executive Officer. "Hornbeck has one of the youngest fleets in the offshore supply vessel industry and is on the leading edge of advanced technology serving the deepwater oil and gas industry. We believe our subsea construction services are a natural fit with Hornbeck's multi-class fleet of deepwater vessels. "This transaction will benefit our shareholders by streamlining our capital structure," Mermis added. "Once the transaction is closed and funded, we will retire our term loan and significantly deleverage our balance sheet." Withdrawing 2008 Guidance Separately, Superior Offshore is withdrawing its prior 2008 guidance due to the recent events that have changed the Company's financial and operational profile, including the decision to cancel the acquisition of Ocean Flow International L.L.C.; the pending sale and charter-back of the Achiever; and current negotiations with respect to several potential long-term charters. "We will continue to focus on our primary markets in the Gulf of Mexico, Trinidad, the Middle East and Africa, with a streamlined focus on operational effectiveness and efficiency," Mermis said. "We expect to be in a position to provide new guidance for 2008 financial results on or before we report fourth quarter and full year 2007 results in March." About Superior Offshore International, Inc. Superior Offshore International is a leading provider of subsea construction and commercial diving services to the offshore oil and gas industry, serving operators internationally and domestically in the outer continental shelf of the U.S. Gulf of Mexico. Construction services include installation, upgrading and decommissioning of pipelines and production infrastructure. Commercial diving services include inspection, maintenance and repair services and support services for subsea construction and salvage operations. The company also operates a construction/fabrication division. Superior Offshore operates a fleet of nine service vessels and provides remotely operated vehicles (ROVs) and saturation diving systems for deepwater and harsh environment operations. Forward-Looking Statements Certain statements contained in this news release are forward-looking statements. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements, including statements regarding the expected closing of the sale/charter-back transaction, the expected proceeds and use of proceeds from the transaction, plans to pursue business opportunities with Hornbeck and expected synergies with Hornbeck's fleet, expected performance of the Superior Achiever, expected delivery and deployment of the Superior Achiever, Superior Offshore's strategy and business plans, including plans to focus on its primary markets in the Gulf of Mexico, Trinidad, the Middle East and Africa, and expected financial results for the fourth quarter and fiscal year ended December 31, 2007 and for the fiscal year ending December 31, 2008. Forward-looking statements by their nature involve substantial risks and uncertainties that could significantly affect expected results, and actual future results could differ materially from those described in such statements. Although it is not possible to identify all factors, we continue to face many risks and uncertainties. Some of the factors that could cause actual future results to differ materially are described under the caption "Risk Factors" in our Prospectus, dated April 19, 2007 and filed with the Securities and Exchange Commission ("SEC") on April 20, 2007, and our other filings with the SEC, which may be obtained by visiting the Investor Relations section of our website under "Financial Information" at http://www.superioroffshore.com/ or from the SEC's website at http://www.sec.gov/. Contacts: Superior Offshore International Roger Burks, CFO 713-910-1875 DRG&E Ken Dennard / Anne Pearson / 713-529-6600 DATASOURCE: Superior Offshore International, Inc. CONTACT: Roger Burks, CFO of Superior Offshore International, Inc., +1-713-910-1875, ; or Ken Dennard, , or Anne Pearson, , both of DRG&E, +1-713-529-6600, for Superior Offshore International, Inc. Web site: http://www.superioroffshore.com/

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