COSL Announces Unaudited Operational Data for the First Quarter of 2006

For the first quarter ended 31 March 2006, total number of operating days during the period was 1,113 days, representing an increase of 50 days, or 4.7%, over that of the corresponding period in the previous year. Operating days for jack-up rigs increased 10.5%, or 88 days, over the same period of last year, whereas that for semi-submersibles decreased 17.0%, or 38 days, when compared with the corresponding period in 2005. Such change in operating days was mainly attributable to the decrease in the number of maintenance days by 83 days for jack-up rigs and the increase in the number of maintenance days by 38 days for the upgrading of semi-submersibles, including the rig NH6 . As such, the average utilization rate in terms of calendar days reached 88.3%, a year-on-year growth of 3.9%. In terms of available days, average utilization rate increased 0.5% to 100%.

For its well workover business, the Company operated for 1,219 team days, posting a decrease of 22.3% from 1,569 team days in the same period of 2005.

In January 2006, the Company successfully secured a drilling service agreement with Iran s North Drilling Company ( NDCO ), for participating in the strategic oil exploration management, repair and maintenance of semi-submersible Alborz Rig in Block 6 of the Caspian Sea. The Company will provide a range of services, including the appointment of senior management staff of the oil rig to participate in the testing and operational management of Alborz Rig and the provision of training to local staff in Iran. The total amount of the contract is approximately US 33 million for three years.

NH6, the Company s semi-submersible rig, commenced towage at the end of March 2006 and had arrived at the relevant sea areas in Australia.

As to COSL941, the Company s 400-feet jack-up rig which is currently under construction, the building of the main body was completed in the end of March. The project has entered into a new phase of commissioning and large-scale testing.

During the three months ended 31 March 2006, operating datum of well services in respect of which the Company provided logging, drilling fluids, directional drilling, cementing and well completion services were 172, 94, 57, 56 and 332, respectively. Except for cementing service, which dropped by 8.2% over the same period last year, each service segment achieved significant growth, with year-on-year increases of 20.3%, 19.0%, 46.2% and 33.9%, respectively.

The marine support and transportation services business of the Company operated for a total of 5,663 days during the period, posting an increase of 19 days or 0.3% over that of the corresponding period last year. The average utilization rate in terms of calendar days reached 92.5%, which is in line with that in 2005.

In respect of the Company s geophysical services, as three vessels conducted 2D seismic data operations at Madagascar, Gulf of Guinea in West Africa and sea areas of Indonesia, the Company s collection and processing of 2D seismic data recorded impressive growth of 294.9% to reach 14,687 km during the period, in which data processing business surged 55.2%. With the Company s vessels focusing on 2D seismic data operation, the collection and processing of 3D seismic data for the first quarter of 2006 decreased by 24.4% and 91.8%, respectively.

Mr. Yuan Guangyu, CEO and President of COSL, said, The demand for exploration services in the offshore China and overseas regions remained strong with escalating oil price. Capitalizing on our precise development strategy, the Company s four business segments attained satisfactory performance. Based on the current operation scale and the overall market environment, we are optimistic about the Company s annual results for the year.

Operational Performance Overview: