The 427-foot NO102 should enable J. Ray to be an immediate player in the flexible pipe installation market

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    HOUSTON, Dec 21, 2009 (BUSINESS WIRE) — J. Ray McDermott, S.A. (“J. Ray” or “the Company”), a subsidiary of McDermott International, Inc. (NYSE:MDR) (“McDermott”), announced today the completion of a vessel transaction with Oceanteam ASA (OSL: OPU) for the subsea construction vessel, North Ocean 102 (“NO102”) and a new build vessel, North Ocean 105 (“NO105”).

    Under the terms of the transaction, J. Ray will have an approximately fifty percent ownership stake in the NO102 vessel owning company and a seventy-five percent ownership stake in the NO105 vessel owning company – and will partner with Oceanteam to construct the new build NO105. J. Ray has agreed to charter the vessels for five years from these respective companies, after which, J. Ray will have the option to purchase Oceanteam’s shares in both vessel owning companies.

    “The addition of the NO102 and the new build NO105 to the J. Ray fleet will provide us with versatile subsea and deepwater installation equipment to support our growing subsea capabilities across a range of water depths worldwide,” said Bob Deason, President and Chief Executive Officer of J. Ray.

    Outfitted with state-of-the-art marine construction equipment, J. Ray intends to use the new construction vessels to install a wide variety of products and facilities for the offshore oil and gas industry, including submarine power cables, control cables and umbilicals, flexible pipelines, rigid-reeled pipelines, subsea components and hardware, as well as deepwater moorings for floating facilities.

    “We aim to pursue high-growth subsea markets around the world,” said Deason. “Leveraging these two new marine construction assets with our worldwide subsea engineering capabilities, the NO102 and, after construction, the NO105 will improve our overall EPCI offering in subsea, floating and conventional project installation work.”

    The 427-foot NO102 should enable J. Ray to be an immediate player in the flexible pipe installation market. J. Ray expects to take delivery of the NO102 in the third quarter of 2010 following completion of the current vessel charter. The vessel has two cranes and a moon pool to support deepwater subsea construction work and has a fast transit speed. It is currently equipped with a 7,000-ton capacity cable, umbilical and flexible pipe carousel with horizontal lay system. J. Ray plans to further upgrade the vessel’s capability by installing a high-capacity flexible-lay system for ultra deepwater installation work. The upgrade will include installation of a new 250-ton crane.

    The second vessel, the 427-foot NO105, will be constructed at the Metalships & Docks S.A.U. shipyard in Vigo, Spain. J. Ray plans to outfit the vessel with a high capacity rigid-reeled pipe-lay system with top-tier payload capacity. The system will also accommodate installation of flexible products including submarine cables and umbilicals and flexible pipelines. The anticipated delivery date of the NO105 is during the last quarter of 2011, and is subject to completing the Spanish Tax Lease structure under which the vessel will be built.

    The addition of these construction vessels to J. Ray’s fleet reinforces the Company’s subsea growth strategy and enables the company to meet the growing demands of the technically challenging deepwater market.

    McDermott is an engineering and construction company, with specialty manufacturing and service capabilities, focused on energy infrastructure. McDermott’s customers are predominantly utilities and other power generators, major and national oil companies, and the United States Government. With its global operations, McDermott operates in over 20 countries with more than 25,000 employees.

    In accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended, McDermott International, Inc. cautions that statements in this press release, which are forward-looking and provide other than historical information, involve risks and uncertainties that may impact the actual results of the transaction. These forward-looking statements include statements about the growth in J. Ray’s subsea capabilities, the use of the construction vessels, the improvement of J. Ray’s overall EPCI offering, the flexible pipe installation market, upgrades to the NO102, the outfit of the NO105, the delivery of the NO102 following the completion of its current charter, the anticipated delivery date of the NO105 and J. Ray’s ability to meet the growing demands of the technically challenging deepwater market. Although we believe that the expectations reflected in those forward-looking statements are reasonable, we can give no assurance that those expectations will prove to have been correct. Those statements are made by using various underlying assumptions and are subject to numerous uncertainties and risks, including, without limitation, market conditions, actions of third parties, financing of the construction of the NO105, construction delays and difficulties and the actual performance of the vessels. If one or more of these risks materialize, or if underlying assumptions prove incorrect, actual results may vary materially from those expected, projected or implied. For a more complete discussion of these and other risk factors, please see McDermott’s annual and quarterly filings with the Securities and Exchange Commission, including its annual report on Form 10-K and quarterly reports on Forms 10-Q. Except to the extent required by applicable law, McDermott undertakes no obligation to update or revise any forward-looking statement.

    www.mcdermott-investors.com

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