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FOR IMMEDIATE RELEASE

23 June 2009

SOVEREIGN OILFIELD GROUP Plc

('Sovereign' or 'the Company' or 'the Group')

Property Disposal 

Sovereign Oilfield Group plc are pleased to announce the sale of a property in Cambuslang for £420,000, of which £350,000 was paid at completion.  The balance is secured by a second charge on the property.  The property, now surplus to the Groups requirements, was previously used by RDT Precision Engineers Limited prior to their move into larger leased facilities. 

This sale is part of a debt reduction programme implemented by the Board over the last twelve months which has realised £10,040,000 over this period, including the sale of Diamant Drilling Services in Belgium, Vertec Engineering Limited and the rental fleet of Labtech Services Limited.  Further disposals have been earmarked in the Drilling Division in order to focus the future growth of the Sovereign Group on its Fabrication Services Division.

The Fabrication Division continues to be profitable despite the challenging environment and the lower prevailing oil prices, which has dampened the demand for oil services in the North Sea, a prime market for the Group.  However, the management team have initiated cost reduction programmes across the Group to remain competitive and the Group presently has an order book in excess of £25m.  Cost cutting includes reducing the corporate overhead and, since completion of the Group's refinancing, one off and exceptional costs have also been significantly reduced. 

Further information:

Sovereign Oilfield Group Plc                                        Tel: 01224 261900

Graham Burgess, Executive Chairman

Julie Cowie, Finance Director

Buchanan Communications                                        Tel: 0207 466 5000

Tim Thompson/Catherine Breen

Charles Stanley Securities - Nominated Advisor            Tel: 0207 149 6000

Mark Taylor/Freddy Crossley

 

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