MODEC announced today that it has received a Letter of Intent from AED Oil Limited for a time charter agreement on the FPSO MODEC Venture 1.

The FPSO MODEC Venture 1 previously operated in the Elang/Kakatua/Kakatua North (EKKN) oil fields in the Timor Gap Joint Petroleum Development Area for ConocoPhillips (the original field operator was BHP) for nine years. The fields were abandoned by ConocoPhillips at the end of July 2007.

MODEC will continue to own and operate the FPSO but will lease the FPSO to AED who plans to use it for the development of the Puffin SW field, Timor sea, Australia. Operating conditions at the Elang/Kakatua and the Puffin SW fields are similar. The facilities at the Elang/Kakatua/Kakatua North fields, including mooring, flowlines, umbilicals and risers will be redeployed and installed by MODEC at the Puffin SW field. The MODEC Venture 1 has a production capacity of approximately 32,000 barrels of oil per day and storage capacity of 750,000 barrels.

"Obviously we are delighted to redeploy the MV1 so quickly," said Kenji Yamada, President and CEO of MODEC, Inc. "MODEC maintains and operates its FPSOs to the highest standard, which makes quick redeployment possible. I am very pleased with our Operations & Maintenance team."

The FPSO will undergo minor modifications and maintenance prior to beginning work for AED. The FPSO is expected to be on station at Puffin-10 toward the end of the first quarter 2008, with production starting shortly thereafter. The contract agreement is for a fixed term of three years with two one-year option periods at AED's election.