Sovereign Oilfield Group

Acquisition

RNS Number:1634T
Sovereign Oilfield Group plc
26 October 2005



SOVEREIGN OILFIELD GROUP Plc

Acquisition of Serco S.A.


Sovereign Oilfield Group Plc ('Sovereign' or 'the Company'), the Aberdeen based
diversified oilfield services group, announces the acquisition of Serco S.A.
("Serco"), a French specialist oilfield services company, for a total
consideration of Euro1.5 million payable in three equal instalments over 12 months.

Serco was founded in 1999 by Frederick Cha and provides oilfield fishing
services, including manufacturing of specialist downhole tools, tool rental and
directional drilling expertise. The business is based in Pau, southwest France.
Clients include Perenco SA, Gaz de France and Repsol YPF.

In the year ended 31 December 2004, Serco had audited revenues of Euro3.3 million,
achieving a profit before taxation of Euro19,000. Net assets at 31 December 2004
were Euro588,000. For the 8 months ended 31 August 2005 Serco had unaudited
turnover of Euro1.8 million. Net assets of Serco include Euro479,000 in cash.

The initial consideration consists of Euro0.5 million to be satisfied by a payment
in cash. Further consideration of Euro0.5 million will be satisfied by the issue
of new ordinary shares in Sovereign shares at the average mid market price of
an ordinary share in the two weeks prior to issue on 21 April 2005 and a further
payment of Euro0.5 million in cash will be payable on 21 October 2006.

In addition, as outlined at the time of flotation, Sovereign has repaid the
Euro648,000 loan to ISIS Nederland BV following which Sovereign now has a
beneficial interest in 94.85 per cent. of the issued share capital of its
Belgian subsidiary Diamant Drilling Services SA.

Graham Burgess, Chief Executive of Sovereign Oilfield Group plc stated:

"This is an important strategic acquisition. It is complementary to the
acquisitions made prior to flotation. Serco broadens our product range,
increases our access to the major oil producers worldwide and strengthens our
relationship with the major European oil companies. It is a cash generative and
profitable business.

"This continues our acquisition strategy and helps towards achieving our aim of
forming a group capable of offering a broad range of oilfield services covering
drilling services and fabrication to a growing client base".

Frederick Cha, Operations Director and owner of Serco SA.

"We are delighted to become part of the Sovereign Oilfield Group. This will help
Serco to consolidate its existing customer base and internationalise the
business, as well as expand the capabilities of our workshop and the services
provided".

26th October 2005
ENQUIRIES:

Sovereign Oilfield Group Plc Tel: 01224 643 675
Graham Burgess, Chief Executive

Bankside Consultants Tel: 0207 367 8888
Michael Padley/Susan Scott


Editors' Note

Sovereign, which joined AIM in September 2005, was formed in October 2003, by
Dr Peter Felter and Mr Graham Burgess, for the specific purpose of developing
an oilfield service company focussed on:

- the provision of experienced engineering personnel to oil and gas
companies and contractors in the UK and internationally;
- the provision of engineering services to oil and gas companies and
contractors in the UK and internationally;
- an emphasis on 'high tech' and IP and the promotion of new
technologies for enhancing oil and gas drilling and production.


Wormcatcher

Sorry did not want to mislead ,i just used an old post after the thread was vandalised a few days ago.