SeaBird Exploration Ltd. (OSL:SBX) HIGHLIGHTS THIRD QUARTER 2008

* New all time high quarterly revenues of USD 56.9 million, an increase of 180% compared to Q3 2007. * EBITDA of USD 20.1 million, compared to USD 3.7 million for Q3 2007. * Strong results of operations combined with unrealized foreign exchange gains generated Net Income for the quarter of USD 17.5 million for the quarter, far better than any previous quarter. * Hugin Explorer commenced operation in July and is currently working on her first full scale ocean bottom node survey for Total in Angola. * Nine vessels in operation for the quarter, with an average vessel utilization of around 84%. * We are optimistic about a continued strong long term market. However we are uncertain of the consequences of the turbulence in the financial markets and the weakening of the oil price in the short term, but demand has not been affected so far. * SeaBird's main protection for a potential short term downturn is strong cash flow from operations and the fact that our current investment program is completed. However, we are also evaluating alternatives to improve financial flexibility.

KEY FINANCIAL PERFORMANCE FIGURES

The SeaBird Group reported consolidated revenues of USD 56.9 million for the third quarter of 2008, an increase of 180% compared to Q3 2007. The Hugin Explorer commenced operations in July. Hence, nine vessels were in operation throughout the quarter with an average vessel utilization of around 84%, up from 62% in Q3 2007 and down from 87% in the previous quarter Q2 2008. Earnings before interest, taxes, depreciation and amortization ("EBITDA") were USD 20.1 million for the quarter, compared to USD 3.7 million for Q3 2007. Vessel utilization was negatively affected by the Kondor Explorer being idle for part of the quarter and the Hugin Explorer using around 30% of the time on unpaid final commissioning preparing for the first node survey. However, revenues reached a quarterly all-time high and EBITDA were close to the all-time high of USD 21.5 million in the second quarter 2008.

Charter hire and operating expenses increased from USD 12.1 million in Q3 2007 to USD 30.3 million for Q3 2008. The main reason for this substantial increase is that we had only 6 vessels operational for the full Q3 2007, a further two vessels were brought into operations later in Q3 2007 while in Q3 2008 the Hugin Explorer commenced operations with a substantial increase of operating expenses. In addition, we have experienced general cost inflation in the industry for main cost elements as payroll and fuel and we have operated on contracts with higher project variable cost. SeaBird had selling, general and administrative expenses of USD 6.4 million, compared to USD 4.3 million in Q3 2007, due to the expansion of operations. The increases in operating expenses are more than offset by higher revenues created by the expansion of the fleet.

Earnings before interest and taxes ("EBIT") were USD 9.5 million for Q3 2008 compared to a loss of USD 1.3 million for Q3 2007. Depreciation increased to USD 10.6 million, up from USD 5.1 million for Q3 2007 and up from USD 7.0 million for Q2 2008. The increase from Q3 2007 is mainly caused by fleet expansion with two vessels commencing operations towards the end of Q3 2007. Furthermore, the increase in depreciation from Q2 2008 is mainly caused by commencing depreciations on the investments in patent technology, nodes, seismic equipment, node handling equipment, conversion cost of the Hugin Explorer and other investments related to our ocean bottom node business which commenced operations in July 2008. The Hugin Explorer is chartered in on a five year bareboat charter ending in January 2013 with 3 one year options to extend the lease.

Interest expenses increased from USD 3.6 million in Q3 2007 to USD 4.8 million in Q3 2008. Capitalized interest and borrowing cost on capital work in progress was zero in Q3 2008 compared to USD 1.0 million in Q3 2007. Adjusted for this, the interest expenses are in line with the comparable quarter of 2007, despite an increase of net interest bearing debt from USD 174.5 million by the end of Q3 2007 to USD 196.9 million by the end of Q3 2008. Other financial items for the quarter were positive with USD 13.3 million compared to a loss of USD 2.9 million in Q3 2007. The unrealized foreign exchange gain on translation of our bonds loans of NOK 600 million, contributed with a gain of USD 15.1 million for the quarter in line with the strengthening of the USD against NOK, which was partly offset by a loss on financial instruments (see further details under the note "Financial Instruments") of around USD 1.7 million.

Net income for Q3 2008 was USD 17.5 million, compared to a net loss of USD 7.8 million for Q3 2007.

Revenues for the nine months ended 30 September 2008 were USD 150.2 million which is 57% higher than the full year revenues for 2007 of USD 95.8 million. EBITDA for the first nine months of 2008 were USD 51.3 million, 120% higher than the full year EBITDA for 2007 of USD 23.3 million. EBIT for the first nine months were USD 26.7 million, compared to USD 2.5 million for the first nine months of 2007. Interest expenses increased from USD 5.9 million in the first nine months of 2007 to USD 12.4 million in the comparable period in 2008, while other financial items, net, improved from a loss of USD 3.0 million for the first nine months of 2007 to a gain of USD 6.6 million for the first nine months of 2008. Unrealized foreign exchange gains on the bond loans of NOK 600 million constituted USD 8.2 million for the first nine months of 2008, mainly offset by unrealized losses of financial instruments of USD 2.4 million (see further details under the note "Financial Instruments").

Net income for the nine months ended 30 September 2008 was USD 20.9 million, compared to a net loss of USD 5.9 million for the first nine months of 2007.

A strengthening of the USD has in general a positive impact on our operating expenses, interest expenses and gross debt as we have significant costs in other currencies and we have bond loans of a total of NOK 600 million.

OPERATIONAL HIGHLIGHTS Q3 2008

SeaBird had nine vessels in operation in the third quarter with an average vessel utilization of around 84% for the full quarter which is up from 62% in Q3 2007 and down from 87 % in Q2 2008. For this purpose vessel utilization is defined as the percentage of the full quarter where the vessel is in paid work either in the form of acquisition, mobilization, demobilization, steaming, standby or other.

Four of the vessels (Aquila Explorer, Harrier Explorer, Northern Explorer and Hawk Explorer) were on time charter contracts for the whole quarter and had an average vessel utilization and chargeable time of 94%. Kondor Explorer ended a long contract with CGGVeritas at the end of August and consequently the vessel utilization was around 59% for Q3 2008. We have enquiries for the Kondor Explorer, and are optimistic that the vessel should be back in operations in Q1 2009 subcontracted as a source vessel supporting larger contracts.

Osprey Explorer continued to acquire data off the east coast of India for the whole quarter with utilisation of 91% even though this is monsoon season in the region. Acquisition rates have been above expectations during the monsoon. The monsoon season is now over and the Northern Explorer was back at the end of October to finalize some work on the West-Coast of India before it joins Osprey Explorer on the East-Coast projects. Expected completion of the current projects in India is mid-2009.

Munin Explorer was working on various contracts in Africa and had a vessel utilization of 88%. Even though Geo Mariner started the quarter with a low paid time-consuming transit due to adverse weather conditions from Africa to a survey in the Middle-East thevessel utilization was above 95%.

The Hugin Explorer completed successful maritime and seismic sea-trials at the end of the second quarter and completed a short undershoot survey in the North Sea in July. She is now in Angola on her first full scale ocean bottom node survey for Total and is currently close to finishing shooting and will then start recovering the nodes from the first of two survey areas. The first month of this survey was slower than target as we have a lot of new technology onboard and have continued to fine-tune some of the equipment. The performance of the vessel has improved significantly over the last two-three weeks and the test data from the first nodes look to meet our quality expectations. Vessel utilization for the quarter of around 50% is not representative of a full operating quarter as 30% of the time was used for unpaid final commissioning prior to her mobilization to Angola. For the remaining part of Q3 her utilization has been around 82%. Reported revenues for the vessel for the third quarter are therefore not representative for the potential of this vessel.

LIQUIDITY AND FINANCING

At 30 September 2008, cash and cash equivalents amounted to USD 10.1 million, compared to USD 11.6 million at the end of 2007 and USD 8.9 million at the end of Q2 2008. Net cash flow from operating activities for the quarter was USD 6.8 million, compared to net cash flow used in operating activities of USD 20.4 million for Q3 2007. Net cash flow from operating activities for the first nine months of 2008 was USD 44.9 million, compared to USD 1.0 million for the first nine months of 2007. Capital expenditures for the quarter were USD 7.7 million and USD 58.5 million for the first nine months of 2008. Borrowings increased with a net of USD 3.6 million for the quarter, mainly caused by increased draw down of short term credit facilities with USD 10 million during the quarter, offset by regular instalments on various other loans. Net interest bearing debt was USD 197 million at the end of Q3 2008 compared to USD 213 million at the end of 2007 and USD 210 million at the end of Q2 2008. The reduction of USD 13 million from Q2 2008 is mainly related to the reduction in the USD equivalent of NOK 600 million of bond loans caused by the strengthening of the USD against NOK.

SeaBird has from the beginning of 2006 invested almost USD 350 million in a significant expansion of the fleet. The investment program initiated in 2005 is now finalized and paid and we have no further significant investments commited, except normal maintenance type expenditures and certain equipment upgrade under evaluation. Cash flow from operations has improved significantly over the last nine months and in a normal market we would be comfortable with a net debt level slightly below USD 200 million. However, at the end of Q3 2008, the short term credit facilities and current portion of long term debt amounting to USD 70.3 million are due within twelve months. The major part of this is a bond loan of NOK 200 million due in July 2009, draw down under a renewable short term credit facility of USD 10 million together with ordinary debt repayments on various credit facilities and term loans.

At 30 September 2008, SeaBird had a cash balance of USD 10.1 million and undrawn short term credit facilities of USD 5 million. Based on the current business plan and the projected cash flow from operations we expect to be able to repay the debt as they fall due until the end of Q2 2009. When it comes to the bond loan of NOK 200 million with maturity in July 2009, we are working with various alternatives to refinance this. With the current uncertainties in the market the total debt level is on the high side. Therefore, we are working with various initiatives and alternatives to improve liquidity and reduce the amount of short term debt. OUTLOOK

It is difficult to assess how the current financial crisis will affect the seismic market in general and our niches of this market. We have not yet seen significant changes on the demand side within our market niches, but we are preparing for higher uncertainty in the short to medium term as in particular smaller E&P companies in less mature exploration areas might have funding challenges. In the strong market we have experienced over the last 3-4 years we have seen limited new capacity within our high end 2D and shallow water 3D niche, except what SeaBird has brought into the market. A substantial part of the capacity available within the 2D market in general is old and might be taken out of the market if and when demand is slowing down. With a lot of areas still unexplored across the globe, we are still optimistic to this segment in the longer term, but we don't project any further growth. Currently, we have a fairly comfortable backlog for all of the vessels in this niche until mid-2009, with some open slots to fill for Munin Explorer and Geo Mariner.

The Kondor Explorer is currently hurt by a reduction of the wide azimuth activity in the US Gulf of Mexico being the only pure source vessel without 2D capabilities in our fleet. We are monitoring the wide azimuth market closely and will evaluate the future of the vessel if the source vessel market doesn't recover in the near future.

We are very optimistic to the long term outlook within our ocean bottom node niche, as we believe advanced 4D/4C and production seismic in general will continue to grow. However, this is a new technology and the risks and uncertainties involved are high. We are dedicated to secure further backlog for the vessel post the Angola survey for Total project expected to be completed in January 2009.

With the completion of Hugin Explorer, SeaBird has taken delivery of 6 converted seismic vessels in less than two years. This completes the aggressive vessel conversion program and focus is now on improving operational performance and secure continued backlog for all vessels. Capital expenditures for the rest of the year will only be smaller maintenance type investments on the existing fleet and some commitments for equipment purchases. With nine vessels in the fleet we believe we now are in a position to benefit from the significant investments done over the last three years.

We currently expect revenues for 2008 to be in the range of USD 210-215 million.



The Board of Directors and Chief Executive Officer SeaBird Exploration Ltd

6 November 2008

The presentation and the full report with tables can be downloaded from the following links:

This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.



LINK: http://hugin.info/136336/R/1267457/279720.pdf



LINK: http://hugin.info/136336/R/1267457/279722.pdf

SeaBird Exploration Ltd.

http://www.seabird.no

ISIN: VGG7944D1087

Stock Identifier: XOSL.SBX

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