BACKGROUND TO SALE

Scotia Waterous (USA) Inc. (“Scotia Waterous”) has been retained as exclusive financial advisor by Virgin Oil Company, Inc., Virgin Offshore U.S.A., Inc., and Virgin Offshore L.L.C. (collectively “Virgin” or the “Company”) for the sale of its assets located primarily in the shelf waters of the Gulf of Mexico (the “Offering”).

Virgin, headquartered in New Orleans, LA, is a privately held independent oil and gas company with exploratory and producing assets in the continental shelf waters of the Gulf of Mexico. The Company is offering for sale all of its Gulf of Mexico interests, including a lease located in Louisiana State waters.

INVESTMENT HIGHLIGHTS

• Diverse, largely operated, exploration and development growth opportunity in the shallow waters of the Gulf of Mexico
  • Interest in 18 blocks throughout the Gulf of Mexico shelf and 1 onshore Louisiana state lease
  • Total net proved reserves of ~83 Bcfe (66% gas weighted)
  • Substantial low risk upside potential from significant portion of proved reserves categorized as “behind pipe” and “undeveloped”
  • Net probable reserves of ~24 Bcfe
  • Over 150 Bcfe of possible (exploration) reserves enhance long term potential growth
• Strong current production and cash flow
  • Trailing three months average net production of ~12.3 MMcfe/day from 6 producing wells (60% gas weighted)
  • Trailing three months average operating cash flow of ~$3.4MM/month
• Potential to retain the senior management of Virgin Oil
  • Provides an experienced management team as well as a working interest partner with extensive knowledge of asset base
  • Management has significant industry experience focused on the Gulf of Mexico
  • 9 year exploration success rate of 75%

OFFERING OVERVIEW

Virgin was formed and commenced doing business in 1996. The Company’s properties are located primarily in the Gulf of Mexico in water depths ranging from 40 to 200 feet. Approximately 75% of total proved reserves are operated by Virgin. The Company holds a total of 86,543 gross acres and is actively adding to its acreage position by acquisition as well as participating in Gulf of Mexico lease sales. The Company is the apparent high bidder on a lease offered in Central Gulf of Mexico Sale 206. The Company’s acreage is located in a number of different OCS areas across the Gulf of Mexico.

TRANSACTION PROCESS

Interested parties will be required to execute the Virgin Confidentiality Agreement (“CA”) and may be required to provide sufficient evidence of financing capability. The executed CA should be sent to Bobby Stillwell via e-mail to Bobby_Stillwell@scotiawaterous.com or by fax to (713) 437-5040. Two original executed hard copies should be sent to Scotia Waterous’ office at the following address:

Pennzoil Place, South Tower
711 Louisiana, Suite 1400
Houston, Texas 77002

Approved interested parties will be provided access to the online virtual data room (“VDR”), the physical data room, and other confidential materials. The anticipated timetable for the transaction is as follows:

Milestone	Date
Online VDR Access	Week of April 28, 2008
Physical Data Room Access	Week of May 5, 2008
Bids due at 12:00 pm Central (Houston) Time:	June 16 , 2008
Execute Purchase and Sale Agreement ("PSA")	July 2008

The physical data room will be located in Scotia Waterous’ Houston office and will allow interested parties to review otherwise unavailable evaluation material (including seismic data), and take part in a data room presentation given by Scotia Waterous technical staff. The presentation may also be available via teleconference for those unable to attend in person.

Proposals for the subject assets shall be submitted on or before the June 16, 2008 deadline. Select companies shall participate in a brief due diligence period shortly thereafter.

At no time should any interested party contact Virgin staff regarding the Offering, unless otherwise directed by Scotia Waterous. Please direct questions or concerns regarding the Offering to one of the Scotia Waterous representatives below.

CONTACTS

Scotia Waterous
Shaun Finnie Managing Director +1 832 476 6407 E-mail: Shaun_Finnie@scotiawaterous.com	Ken Becker Director +1 832 476 6405 E-mail: Ken_Becker@scotiawaterous.com
Lance Dardis Associate Director +1 832 476 6406 E-mail: Lance_Dardis@scotiawaterous.com	Bobby Stillwell Associate +1 713 437 5044 E-mail: Bobby_Stillwell@scotiawaterous.com

Scotia Waterous ( USA) Inc.
Pennzoil Place - South Tower
711 Louisiana, Suite 1400
Houston, Texas
USA 77002-2716
Tel: (713) 222-0546 Fax: (713) 222-0572
Email: houston@scotiawaterous.com