KCA Deutag - Initiation

All,

Please find attached our initiation on KCA Deutag here.

Eeven under our wildest projections, we struggle to see the company pass its covenants at the end of the year. It’s on and offshore business - in particular in Russia, the Middle East and Africa are subject to divergent trends and it’s interest bill is too high.

Tomas will be doing further work on a rig-by-rig contract analysis as well as legal structure. Shareholders fronted by Pamplona have twice cured covenants and remain heavily invested.

Please call Tomas to discuss.

Wolfgang