McDermott Signs Shipyard Contract

Press Release August 31, 2012

McDermott’s Lay Vessel 108 will be built at the Vigo, Spain, shipyard with vessel delivery expected around the third quarter 2014.

McDermott Signs Shipyard Contract for Construction of another High Capacity Reeled Pipelay Vessel

McDermott International, Inc. (NYSE: MDR) (“McDermott”) announced that it will build another high capacity reeled pipelay vessel with top-tier payload capacity, tentatively named Lay Vessel 108 (“LV108”). The vessel will be a sister ship to the recently completed subsea construction vessel the Lay Vessel North Ocean 105 (“LV105”), and is to be built to similar specifications at Metalships and Docks S.A.U. shipyard in Vigo, Spain.

“LV108 is another milestone in our vessel renewal program focusing on the subsea construction market for flexible and rigid product installation,” said Stephen M. Johnson, Chairman, President and Chief Executive Officer of McDermott. “Market analysis indicates that the subsea and deepwater construction market is expected to continue to grow and there is demand for more tonnage in both the rigid reel lay and flexible lay markets. The LV108 is expected to meet this need.”

LV108 is designed for advanced deepwater operations with a high-capacity tower for rigid and flexible pipelay and state-of-the-art marine construction equipment that will enable installation of a variety of products to a depth of 10,000 feet, including rigid-reeled pipelines, subsea components and hardware, and deepwater moorings for floating facilities as well as flexible products – cables and umbilicals.

The principal characteristics of the vessel, such as payload, tension capacity and product size, will mirror those of the LV105, but McDermott anticipates enhanced functionality of the LV108 equipment design compared to the LV105. Delivery of LV108 is anticipated to be around third quarter 2014 for outfitting of the custom-designed lay system, built by a specialist fabricator in Europe.

The vertical reel will have a nominal payload of 2,500 tons plus, subject to vessel loading conditions, and a lay tower operational between 90 and 40 degrees. The nominal tension capacity is expected to be 400 tons, and the range of pipe the vessel can install is between 4 to 16 inches diameter. This 427-foot, dynamically positioned vessel will be equipped with a 400-ton heave compensated crane, will have a transit speed of 15 knots and will operate across a range of water depths up to more than 10,000 feet.

“In May we completed building and outfitting the LV105, a vessel that aims to improve our worldwide capabilities to meet the growing needs and technical challenges of the subsea and deepwater markets. The vessel will perform its first project in Asia in up to 4,430 feet of water. We look forward to LV108 joining the LV105 and other vessels in our fleet in 2014,” said Johnson.