St. John’s, Newfoundland and Labrador, June 20, 2006: The D.F. Barnes Group of Companies has been awarded a multi-million dollar manufacturing contract with Oceaneering International, Inc. (NYSE:OII) – the world’s largest operator of remotely operated vehicles (ROVs) for use by the oil and gas industry. D.F. Barnes will manufacture launch and recovery systems, called LARS, through its new subsidiary, Orphan Industries. These are large mechanical devices used to launch and recover ROVs during offshore operations.

This contract establishes the D.F. Barnes Group as one of three worldwide suppliers of LARS systems, servicing Oceaneering’s North America and Western Europe marketplace.

“With revenue forecasts of about $40 million a year, Orphan Industries will generate tremendous opportunities for the D.F. Barnes Group, particularly in the areas of technology transfer, manufacturing and overall business expansion,” said D.F. Barnes President, Jerry Byrne. “Orphan Industries currently has about 40 employees; however, we project this will grow to about 200 long-term jobs for Newfoundland and Labrador. We also expect Orphan Industries to attract other manufacturing opportunities. For instance, we are building a prototype aluminum ROV cage at our Gould’s facility.”

According to Oceaneering, D.F. Barnes Limited competed against 23 international bidders from around the world to capture this opportunity, including Asia, the United States and the European Union.

“This contract signifies the advancement of the province’s manufacturing industry,” explains Byrne. “New jobs will be created and there will be new contracting opportunities for the local service and supply community in St. John’s and beyond. In fact, we hope to engage local companies in the hydraulic, electrical, instrumentation and information technology opportunities required for these state-of-the-art machines.”

The D.F. Barnes Group is a group of Newfoundland and Labrador owned and operated companies engaged in customized metal fabrication, servicing the offshore, marine, and industrial sectors throughout North America. Currently, the D.F. Barnes Group comprises D.F. Barnes Limited, OMI Services Limited, Extreme East Rigging Services Limited, NewTech Coatings, Orphan Industries Limited and Alberta Orphan Industries Limited.

Oceaneering is an advanced applied technology company that provides engineered services and hardware to customers who operate in marine, space, and other harsh environments. Their business offerings include remotely operated vehicles, mobile offshore production systems, built-to-order specialty hardware, engineering and project management, subsea intervention and installation services, non-destructive testing and inspections, and manned diving.

For more information, please contact:

Caron Hawco, ABC – 709-738-5262 – contact@caronhawco.com

Backgrounder

What is Orphan Industries Limited?

Orphan Industries Limited – a wholly owned subsidiary of D. F. Barnes Limited – is Newfoundland and Labrador's newest export manufacturing facility.

After identifying potential export opportunities in manufacturing, the management of D.F. Barnes decided to expand their capacity and open Orphan Industries, a new, state-of-the art manufacturing company.

The company's first contract is to manufacture launch and recovery systems (LARS) for Oceaneering International, Inc. of Louisiana. Orphan officials expect additional contracting opportunities to arise with Oceaneering in the months and years ahead. Orphan Industries is also in discussions with other customers who are positioned to award additional manufacturing contracts to the company in the near future.

What is a LARS unit?

Launch and recovery systems or LARS are 30-ton mechanical and hydraulic systems used to launch and recover remotely operated underwater vehicles (ROVs) during offshore operations, primarily in the offshore oil and gas industry. These 30-feet-by-12-feet assemblies are fabricated from exotic steel. They require precise fabrication that must adhere to a rigorous international regulatory regime to assure compliance and safety since LARS are generally deployed in harsh environments worldwide.

How many LARS will be built in Newfoundland and Labrador?

Although currently under contract to supply 15 LARS systems, Orphan Industries projects it will likely supply approximately 30 to 40 LARS per year. The company’s arrangement with Oceaneering also involves a worldwide upgrade and replacement program for LARS. Additionally, Orphan Industries will be fabricating aluminum “garages” that house the ROVs, as well as computerized numerical controlled (CNC) manufactured parts for ROVs.

Where will the manufacturing take place?

Most of the manufacturing is currently taking place in five separate locations in St. John’s. Due to a lack of local capacity, some manufacturing is taking place in the Maritimes and Ontario. In about one year, all of the fabrication and the services will take place in Orphan Industries’ new manufacturing facility, which will be built in St. John’s.

What is a LEAN facility?

In recognition of the global changes occurring in the manufacturing industry, Orphan Industries will implement several processes to foster their competitiveness worldwide. One of these processes is lean manufacturing. Originally developed by Toyota, lean manufacturing is a process-driven system that maximizes output by minimizing waste at all levels: materials, procedures, setups, time, etc. Orphan management anticipates that a lean system, when completely implemented, will create additional employment and allow additional manufacturing capacity – improving the company’s competitiveness.

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