MARINE SHUTTLE OPERATIONS INC, S-1/A, 1998-10-14

MARINE SHUTTLE OPERATIONS INC
S-1/A, 1998-10-14
OIL & GAS FIELD SERVICES, NEC

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 14, 1998

REGISTRATION NO. 333-58465

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------

AMENDMENT NO. 1
TO

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------

MARINE SHUTTLE OPERATIONS INC.
(Exact Name of Registrant as Specified in Its Charter)

<TABLE>
<S> <C> <C>
NEVADA 1389 91-1913992
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
</TABLE>

--------------------------

4410 Montrose Boulevard
Houston, Texas 77006
(713) 529-7498
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
--------------------------

FRANZ EDER, PRESIDENT
MARINE SHUTTLE OPERATIONS INC.
4410 MONTROSE BOULEVARD
HOUSTON, TEXAS 77006
(713) 529-7498
(Name, Address Including Zip Code, and Telephone Number, Including
Area Code, of Agent For Service)
--------------------------

Copies of all communications, including all communications sent to the agent for
service, should be sent to:

LEONARD J. BRESLOW, ESQ.
BRESLOW & WALKER, LLP
100 JERICHO QUADRANGLE, SUITE 230
JERICHO, NEW YORK 11753
TEL: (516) 822-6505
FAX: (516) 822-6544
--------------------------

APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act, check
the following box. /X/

If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / / ________

If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ________

If this form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / / ________
--------------------------

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
PROPOSED
MAXIMUM PROPOSED
AMOUNT OFFERING MAXIMUM
TITLE OF EACH CLASS OF SECURITIES TO BE PRICE PER AGGREGATE
TO BE REGISTERED REGISTERED SECURITY(2) OFFERING PRICE
<S> <C> <C> <C>
Common Stock, par value $0.001 per share............. 20,000,000 $6.3125 $126,250,000
Common Stock, par value $0.001 per share(1).......... 13,567,609 $6.3125 $85,645,532
Total................................................ $211,895,532

AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES REGISTRATION
TO BE REGISTERED FEE
<S> <C>
Common Stock, par value $0.001 per share............. $37,244
Common Stock, par value $0.001 per share(1).......... $25,265
Total................................................ $62,509
</TABLE>

(1) Represents shares of Common Stock which may be sold by selling stockholders.
See "Selling Stockholders".

(2) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(c) under the Securities Act of 1933,
as amended. Represents the average of the high and the low prices of the
Common Stock as quoted on the OTC Bulletin Board on June 30, 1998.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.

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<PAGE>

EXPLANATORY NOTE

This registration statement contains two forms of prospectuses: one to be
used in connection with sales of the Company's securities in Germany and certain
other foreign countries (the "International Prospectus"), and one to be used to
comply with post-offering prospectus delivery requirements relating to resales
of the Company's securities into the United States as well as for sales of the
Company's securities in certain foreign countries (the "U.S. Prospectus"). The
International Prospectus and the U.S. Prospectus are identical except that the
International Prospectus has been translated into German, contains a different
outside front cover page, and contains a table of contents and a general
information section immediately following the front cover page. Each of the
pages for the International Prospectus included herein is labeled "Alternate
Page."

<PAGE>

SUBJECT TO COMPLETION, DATED OCTOBER 14, 1998

PROSPECTUS
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
MARINE SHUTTLE OPERATIONS INC.

33,567,609 SHARES OF COMMON STOCK
------------------

This Prospectus relates to the offering (the "Offering") of 33,567,609
shares of common stock, $0.001 par value per share (the "Common Stock"), of
Marine Shuttle Operations Inc., a Nevada corporation (the "Company"), 20,000,000
of which (the "Shares") are being offered by the Company outside of the United
States on a "best efforts, all or none" basis, and 13,567,609 of which (the
"Selling Stockholder Shares") may be offered by certain selling stockholders of
the Company (the "Selling Stockholders"). The Company will not receive any
proceeds from the sale of the Selling Stockholder Shares by the Selling
Stockholders. The Common Stock currently is quoted on the OTC Bulletin Board
under the symbol "ZSUB", and is quoted under Securities No. 912836 on the
Bulletin Boards of the Berlin Stock Exchange, the Hamburg Stock Exchange, the
Dusseldorf Stock Exchange, and the Munich Stock Exchange. On October 13, 1998,
the last reported sale price of the Common Stock on the OTC Bulletin Board was
$4.03125 per share. It is anticipated that application will be made to include
the Common Stock for listing on the Bulletin Board of the Frankfurt Stock
Exchange.

THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK
AND IMMEDIATE SUBSTANTIAL DILUTION. SEE "RISK FACTORS"
COMMENCING ON PAGE 6 AND "DILUTION."
---------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO
PRICE TO PUBLIC DISCOUNT(1) COMPANY(2)(3)
<S> <C> <C> <C>
Per Share.......................................... $ $ $
Total.............................................. $ $ $
</TABLE>

(1) The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."

(2) Before deducting estimated expenses of $800,000 payable by the Company.

(3) The Shares are offered by Berliner Effektenbank AG (the "Underwriter"), as
agent for the Company, on a "best efforts, all or none" basis, for a period
of 30 days from the effective date of the registration statement of which
this Prospectus forms a part (the "Registration Statement"). The offering
period may be extended for an additional 30 days by the mutual agreement of
the Company and the Underwriter, and an additional five days may be added
solely for purposes of allowing checks to clear. All funds received by the
Underwriter will be deposited no later than noon on the next business day
following their receipt by the Underwriter in a separate account, to be held
in escrow by the Underwriter as agent for the subscribers of the Shares. If
no closing takes place during the offering period (or any extension
thereof), then all funds promptly will be returned to the subscribers
thereof without any deduction therefrom or interest therein.

------------------------

The Common Stock is being offered by the Berliner Effektenbank AG (the
"Underwriter"), as agent for the Company on a "best efforts, all or none" basis,
subject to prior sale, withdrawal, or cancellation of the Offering without
notice. The Underwriter reserves the right to withdraw, cancel, or modify the
Offering and to reject any order for the Common Stock offered hereby, in whole
or in part. It is expected that delivery of the Common Stock offered hereby will
be made at the offices of Berliner Effektenbank AG, Berlin, Germany, at the
closing of the Offering.

BERLINER EFFEKTENBANK AG

The date of this Prospectus is , 1998
<PAGE>
[PHOTOGRAPHS]

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The above pictures are computer-generated models of an Offshore Shuttle.

AVAILABLE INFORMATION

The Company intends to furnish its stockholders with annual reports
containing financial statements audited by its independent certified public
accountants and quarterly reports for the first three quarters of each fiscal
year containing unaudited interim financial information.
<PAGE>
PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND FINANCIAL STATEMENTS, INCLUDING NOTES THERETO, APPEARING
ELSEWHERE IN THIS PROSPECTUS. THIS PROSPECTUS CONTAINS FORWARD-LOOKING
STATEMENTS WHICH INVOLVE CERTAIN RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL
RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING
STATEMENTS AS A RESULT OF CERTAIN FACTORS, INCLUDING THOSE SET FORTH UNDER RISK
FACTORS AND ELSEWHERE IN THIS PROSPECTUS. UNLESS THE CONTEXT OTHERWISE REQUIRES,
THE TERM "COMPANY" AS USED HEREIN INCLUDES MARINE SHUTTLE OPERATIONS INC. AND
ITS SUBSIDIARIES.

THE COMPANY

Marine Shuttle Operations Inc., through its wholly-owned Norwegian
subsidiary, Marine Shuttle Operations AS ("MSOAS"), is seeking to become a
leading player in the market for decommissioning, installing, and transporting
offshore oil and gas structures. The Company is in the development stage, has
not generated any revenues from operations, and does not expect to generate any
revenues from operations until the year 2000, at the earliest.

There are now more than 6,500 offshore oil and gas installations worldwide
located on the continental shelf of approximately 53 countries. Many different
types of installations exist, each one being uniquely designed based on the
water depth, seabed characteristics, and reservoir, wave, and current conditions
of the site of installation. Of the current installed base of structures, the
vast majority (more than 5,800) are fixed steel installations. Situated almost
exclusively in shallow (i.e., less than 75 meters) and intermediate (i.e., 75 to
200 meters) water depths, fixed steel installations are comprised of two
elements: the "topside" which contains the processing, drilling, and
accommodation facilities, and the substructure or "jacket" which consists of a
lattice-work of steel tubes and can weigh over 30,000 tons with a base dimension
of up to 120 meters. The balance of the installed base of structures includes
concrete gravity base structures (typically found in shallow and intermediate
water depths), various types of floating structures such as tension leg
platforms, floating production platforms, spars, and floating production,
storage and offloading vessels (typically situated in deep waters--i.e., more
than 200 meters), and subsea structures which include the equipment needed to
develop satellite fields and the seabed equipment associated with floating
installations. The Company believes that over the next 30 years, most of these
structures will have to be decommissioned at an estimated cost of $20 to $40
billion.

The Company initially intends to concentrate its efforts on decommissioning
fixed steel structures, primarily the several hundred large steel installations
situated in intermediate water depths. Presently, the decommissioning of fixed
steel structures typically is accomplished by cutting the particular structure
into many pieces and utilizing crane ships and other support vessels to lift the
pieces onto barges or, in some instances, onto the deck of the crane ships
themselves. The cutting is necessitated by the limited lifting capabilities of
existing crane ships. Theoretically, the largest cranes are capable of lifting
objects up to 14,000 tons. Crane capacity, however, decreases as the required
outreach and/or upreach of the crane boom increases. Moreover, since the maximum
height to which a structure can be lifted is limited to the length of the crane
boom, taller structures must be cut into smaller pieces in order to clear the
barge deck. As a result, although the cutting and lifting procedure may be
adequate for small, shallow water installations, the extensive cutting and
lifting required with respect to the larger platforms in deeper waters makes
decommissioning such installations using such procedure difficult, dangerous,
expensive, and time-consuming.

Offshore Shuttle AS ("OSAS"), a majority-owned Norwegian subsidiary of the
Company, has designed a new generation of vessel (the "Offshore Shuttle") which
it believes will be capable of lifting most of the largest topsides in one piece
and also will be capable of diving partly below the water surface to remove a
complete jacket in one operation. MSOAS has entered into a license agreement
with OSAS which gives MSOAS the exclusive right to build and operate five
Offshore Shuttles, and an exclusive option

3
<PAGE>

to build and operate an additional two Offshore Shuttles thereafter. The Company
anticipates that the construction of the first Offshore Shuttle will be
completed by August, 2000, at the earliest.

The Company has formed strategic alliances to test, develop, manufacture,
and commercialize the Offshore Shuttle concept. In particular, the Company will
rely on OSAS with respect to the pre-engineering work necessary to construct the
Offshore Shuttles. In addition, MSOAS has entered into an agreement with Thyssen
Stahlunion GmbH ("TSU") with respect to the marketing of its proposed services.
TSU is a subsidiary of Thyssen AG ("Thyssen"), a conglomerate of more than 323
companies operating worldwide in numerous industries. In its fiscal year ended
September 30, 1997, Thyssen generated sales of approximately $23 billion with a
workforce of approximately 120,000 people. MSOAS also has entered into an
agreement with RC Consultants AS, a Norwegian engineering company with more than
330 skilled offshore engineers, with respect to its engineering and operational
activities, and has entered into an agreement with Schuller Industrieentsorgung
AG (formerly Schuller Industrieentsorgung GmbH), a German service company, with
respect to waste management, onshore dismantling, and oil pollution prevention
and cleanup. There can be no assurance that such arrangements will be
successful.

The Company anticipates utilizing a significant portion of the net proceeds
from the Offering to finance the construction of the first Offshore Shuttle. See
"Use of Proceeds."

The Company was incorporated in Nevada in May 1997 under the name Geoteck
International, Inc. On May 29, 1998, it changed its name to Marine Shuttle
Operations Inc. In April, 1998, the Company acquired all of the issued and
outstanding stock of MSOAS in exchange for 7,600,000 shares of Common Stock (the
"MSOAS Exchange"). In May, 1998, the Company acquired 3,291,738 shares of OSAS
(approximately 68% of the outstanding OSAS capital stock) in exchange for
4,937,607 shares of Common Stock (the "OSAS Exchanges"). All of such shares are
being held in escrow subject to completion of the Offering. On May 20, 1998, the
Company entered into two agreements to acquire an additional 686,668 shares of
OSAS (approximately 14% of the outstanding OSAS capital stock) in exchange for
1,030,002 shares of Common Stock (the "Additional OSAS Exchanges"). Subject to
the satisfaction of certain conditions precedent, the Company anticipates that
the Additional OSAS Exchanges will close soon after the completion of the
Offering. The Company's principal offices are located at 4410 Montrose
Boulevard, Houston, Texas 77006. Its telephone number is (713) 529-7498.

THE OFFERING

<TABLE>
<S> <C>
Common Stock offered by the Company.......... 20,000,000 shares
Common Stock offered by the Selling 13,567,609 shares
Stockholders...............................
Common Stock Outstanding Prior to the 33,587,609 shares
Offering(1)................................
Common Stock Outstanding After the 53,587,609 shares
Offering(1)................................

Use of Proceeds.............................. The Company intends to use the net proceeds
of the Offering as follows: (i) construction
of the first Offshore Shuttle, (ii) payment
of license fees, (iii) repayment of
outstanding indebtedness, and (iv) working
capital and general corporate purposes.
NASDAQ Symbol................................ ZSUB
</TABLE>

- ------------------------

(1) Assumes completion of the Additional OSAS Exchanges.

4
<PAGE>
RISK FACTORS

An investment in the Common Stock offered hereby involves a high degree of
risk and should be made only by investors who can afford the loss of their
entire investment. Prospective investors should carefully review and consider
the risks presented by the factors listed under "Risk Factors" as well as the
other information set forth in this Prospectus.

SUMMARY CONSOLIDATED FINANCIAL DATA

The following data presents for the periods indicated certain financial
information for the Company. Such data should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Financial Statements and related notes thereto included
elsewhere in this Prospectus.

<TABLE>
<CAPTION>
MAY 23, 1997
(INCEPTION)
THROUGH SIX MONTHS ENDED
DECEMBER 31, 1997 JUNE 30, 1998
------------------ -----------------
<S> <C> <C>
(UNAUDITED)
CONSOLIDATED STATEMENTS OF OPERATIONS DATA:
Total costs and expenses................................................... $ 164,931 $ 1,064,853
Net (loss)................................................................. $ (164,931) $ (1,057,646)
Net (loss) per share....................................................... $ (0.01) $ (0.04)
------------------ -----------------
------------------ -----------------
Weighted average number of common shares
outstanding.............................................................. 25,811,892 27,620,000
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1997 1998
------------ -------------
<S> <C> <C>
(UNAUDITED)
CONSOLIDATED BALANCE SHEET DATA:
Working capital (deficiency)........................................................ $ (10,931) $ (1,225,754)
Total assets........................................................................ 9,015 23,328,018
Notes payable....................................................................... 0 1,265,781
Total liabilities................................................................... 19,946 1,636,397
Accumulated deficit................................................................. (164,931) (1,222,577)
Stockholders' equity (deficiency)................................................... (10,931) 21,691,621
</TABLE>

5
<PAGE>
RISK FACTORS

AN INVESTMENT IN THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF
RISK AND SHOULD BE MADE ONLY BY INVESTORS WHO CAN AFFORD THE LOSS OF THEIR
ENTIRE INVESTMENT. PROSPECTIVE INVESTORS SHOULD CAREFULLY REVIEW AND CONSIDER
THE FOLLOWING RISKS AS WELL AS THE OTHER INFORMATION SET FORTH IN THIS
PROSPECTUS.

RECENTLY ORGANIZED COMPANY; NO OPERATING HISTORY; ACCUMULATED AND WORKING
CAPITAL DEFICITS; HOLDING COMPANY STRUCTURE

The Company was incorporated in May, 1997 to serve as a holding company for
one or more unidentified operating subsidiaries. The Company has no operating
history on which an evaluation of its performance and prospects can be made, and
its proposed operations are subject to all of the risks inherent in the
establishment of a new business enterprise. To date, the Company has no
significant assets and it has not generated any revenues from operations. The
Company believes that it will not generate any revenues (other than interest
income derived from the net proceeds of this Offering) until the year 2000, at
the earliest. There can be no assurance, however, that significant revenues will
ever develop. The likelihood of the success of the Company must be considered in
light of the problems, expenses, difficulties, complications, and delays
frequently encountered in connection with a new business, particularly one that
is seeking to develop and commercialize a new product and operate in a
competitive environment.

The Company sustained a net loss of $164,931 for the period from May 23,
1997 (inception) through December 31, 1997, and $1,057,646 for the six months
ended June 30, 1998. As of June 30, 1998, the Company had a working capital
deficit of $1,225,754 and an accumulated deficit of $1,222,577. The Company
expects to continue to incur losses through at least 2001, and there can be no
assurance that the Company will achieve profitable operations. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
Note 1 of the Notes to the Financial Statements.

Marine Shuttle Operations Inc. owns all of the issued and outstanding
capital stock of MSOAS and, upon consummation of the Additional OSAS Exchanges,
will own approximately 82% of the outstanding capital stock of OSAS. Based on
this ownership structure, any dividends paid by MSOAS or OSAS to Marine Shuttle
Operations Inc. are subject to Norwegian withholding taxes and U.S. income taxes
(which can be offset to the extent of the Norwegian withholding taxes). Thus,
the amount of funds that may be distributed by such subsidiaries to Marine
Shuttle Operations Inc. for working capital, acquisitions, investments, or other
purposes will be reduced to the extent such taxes are payable.

DEPENDENCE ON OSAS AND OFFSHORE SHUTTLE DESIGN

MSOAS, the Company's wholly-owned subsidiary, has entered into a license
agreement (the "License Agreement") with OSAS, the Company's majority-owned
subsidiary and the holder of all licensing and marketing rights to the Offshore
Shuttle design. Pursuant to the License Agreement, OSAS granted MSOAS the
exclusive right to build and operate five Offshore Shuttles, an exclusive option
to build and operate an additional two Offshore Shuttles thereafter, and a right
of first refusal with respect to any Offshore Shuttle licenses that OSAS may
seek to grant during a specified future period. In addition, based on functional
specifications for each Offshore Shuttle to be agreed upon by MSOAS and OSAS,
OSAS shall provide MSOAS with the pre-engineering work, including designs and
descriptions of operational procedures, necessary to construct the Offshore
Shuttles. In consideration for the licenses granted and services to be provided,
OSAS shall receive a construction fee equal to ten percent of the construction
price of each of the Offshore Shuttles, an operating fee equal to sixteen
percent of the gross profit for each contract concluded by MSOAS involving the
use of an Offshore Shuttle, and an exclusivity fee equal to one percent of the
aggregate construction price of Offshore Shuttles two through five. See
"Business-- Strategic Alliances--Offshore Shuttle AS."

6
<PAGE>

The Company's operations are dependent on the rights granted to it pursuant
to the License Agreement and the work to be performed thereunder by OSAS. The
binding nature of the License Agreement is conditioned upon OSAS receiving
$2,000,000 towards the exclusivity fee by November 30, 1998, and MSOAS placing a
firm order for the first Offshore Shuttle with a construction yard by December
31, 1998. The License Agreement can be terminated by either party on written
notice to the other party in the event the other party (i) becomes insolvent or
goes into liquidation, bankruptcy, or receivership, or becomes a party to any
procedure for the settlement of its debts or any dissolution proceedings, or
(ii) breaches any term of the License Agreement and fails to remedy such default
within 45 days after written notice thereof. OSAS has incurred substantial net
losses from operations since its inception, and as at June 30, 1998, had an
accumulated deficit of $2,172,188. If the conditions set forth in the License
Agreement are not satisfied, if the License Agreement is terminated, or if OSAS
is unable to perform its obligations under the License Agreement, it would have
a material adverse effect on the Company.

In addition, given OSAS's extensive knowledge of and familiarity with the
Offshore Shuttle design, the Company anticipates that it will rely on OSAS for
the provision of various other services including engineering verification,
technical support, and technical supervision of the construction and testing of
the Offshore Shuttle. If the Company is unable to negotiate acceptable
arrangements with OSAS with respect to such other services, or if any such
arrangements are unsuccessful, the Company could be materially adversely
affected.

POTENTIAL GRANT OF OFFSHORE SHUTTLE LICENSE TO THIRD PARTY

Pursuant to the License Agreement, MSOAS has the right to build and operate
five Offshore Shuttles and an exclusive option to build and operate an
additional two Offshore Shuttles thereafter. MSOAS must place an order for the
first Offshore Shuttle by December 31, 1998. Subject, in each case, to an option
to extend the order date by twelve months upon payment of a $900,000 option
exercise fee, an order for the second Offshore Shuttle must be placed no later
than six months after successful testing of the first Offshore Shuttle, and the
remaining three Offshore Shuttles must be ordered by June 30th of each year
thereafter. If an order is not placed on or before the required date, then for
the twelve-month period thereafter OSAS shall be entitled to grant a license to
build one Offshore Shuttle to a third party. No assurance can be made that each
Offshore Shuttle will be ordered on time or that the Company will have the
financial resources to extend a particular order date. If an Offshore Shuttle
license is granted to a third party, it could have a material adverse effect on
the Company. See "Business-- Strategic Alliances-- Offshore Shuttle AS."

POTENTIAL LOSS OF RIGHTS TO OFFSHORE SHUTTLE CONCEPT

The intellectual property rights to the Offshore Shuttle concept (the
"Rights") were transferred to OSAS by Gunnar Foss and Per Bull Haugsen, the
developers of the Offshore Shuttle concept, pursuant to an Agreement Regarding
Intellectual Property dated March 31, 1998 (the "Intellectual Property
Agreement"). The Intellectual Property Agreement provides that if the License
Agreement is terminated and OSAS shall cease to actively engage in its
activities relating to the Offshore Shuttle concept, then, subject to a
six-month cure period, the Rights shall revert back to Messrs. Foss and Haugsen.
In such event, the Company would be unable to obtain any value from the future
sale or exploitation of the Rights.

SUBSTANTIAL TIME LAPSE UNTIL COMMERCIAL PRODUCT INTRODUCTION

7
<PAGE>
construction of an additional Offshore Shuttle is anticipated to commence in
each of the four years after delivery of the first Offshore Shuttle, until a
total five Offshore Shuttles are in operation. There can be no assurance,
however, as to the time required to complete such construction efforts or that
such efforts can be completed in a cost-effective manner or at all.

Subject to market demand, performance results, and other factors, the
Company anticipates that each Offshore Shuttle will conduct one commercial
operation in its first year in service, and will perform up to three operations
in each year thereafter. In making the foregoing forecast, the Company has
assumed, among other things, that each commercial operation, including all
pre-engineering work, will take up to one year to complete, with the offshore
portion calculated on average to be four weeks. As a result, the Company does
not anticipate generating any revenues until the year 2000, at the earliest.
There can be no assurance, however, that the Company's assumptions regarding the
number of operations to be performed will prove to be accurate, or that the
Company will ever achieve commercially significant sales. To date, the Company
has not entered into any contracts for the use of its proposed services, and no
assurance can be given that any such contracts will materialize. See
"Business--Business Strategy."

TECHNOLOGICAL RISKS

The Company believes that the technical risks associated with the Offshore
Shuttle concept have been reduced by extensive model testing and rigorous
calculations. Using a 1:50 scale model of an Offshore Shuttle, motions in
different ballast conditions were tested; ballasting/deballasting sequences were
tested without any marine object, with a 1:50 scale model of a 7,000 ton jacket,
and with a 1:50 scale model of an 8,000 ton topside; and hydrodynamics were
tested by examining the motions of the Offshore Shuttle (with and without a
marine object) in different positions and when subjected to wave forces, as well
as its towing resistance in calm water and storm. In addition, based on
engineering documentation, calculations, and model testing, Det Norske Veritas
AS, an internationally-recognized society responsible for classification and
technical inspections of merchant vessels, issued a Statement of Approval
verifying the technical feasibility of the Offshore Shuttle concept for the
transport and removal of certain offshore platform deck structures and jackets.

Despite the testing, documentation, and approval, there can be no assurance
that construction of the Offshore Shuttle will be successfully completed or
that, if constructed, the Offshore Shuttle will function properly, will be
operationally safe and environmentally friendly, or will enable the Company to
provide decommissioning, installation, and transportation services in an
effective manner or at all. In addition, it is anticipated that the Offshore
Shuttle will be equipped with an adjustable lifting frame, and specially-
prepared docking connections will be utilized during removal operations. To
date, neither the lifting frame nor the docking connections have been
engineered, and there can be no assurance such engineering will be successfully
completed. If the Company is unable to engineer the lifting frame and/or the
docking connections, it could have a material adverse effect on the Company. See
"Business--The Offshore Shuttle."

DEPENDENCE ON OFFERING; POSSIBLE NEED FOR ADDITIONAL FINANCING

The Company is dependent upon the net proceeds of the Offering to finance
its proposed operating activities. Although the Company believes that the
estimated net proceeds from the Offering will enable it to construct the first
Offshore Shuttle, no assurance can be given in that regard. The Company's future
capital requirements could vary significantly and will depend on numerous
factors, many of which are not within the Company's control. Such factors
include, but are not limited to, the need for cash to fund the construction of
additional Offshore Shuttles, greater than anticipated expenses, market demand,
performance results, and longer engineering, development, and construction times
than now contemplated. See "Business--Business Strategy." The Company believes
it will be able to fund the construction of additional Offshore Shuttles through
future operating cash flows and short or medium term debt financing, however no
assurance can be given in that regard.

8
<PAGE>
The Company may seek such additional funding through public or private
equity or debt financings, collaborative or other arrangements with strategic
partners, or from other sources. There can be no assurance, however, that
additional funds will be available on acceptable terms, if at all. If additional
funds are raised by issuing equity securities, substantial dilution to existing
stockholders, including purchasers of the shares of Common Stock offered hereby,
may result. If additional capital is raised through a debt financing with
financial institutions, the Company would likely become subject to restrictive
covenants relating to its operations and finances. If adequate funds are not
available, the Company may be required to significantly curtail or cease its
proposed activities. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

COMPETITION; TECHNOLOGICAL OBSOLESCENCE

The Company will face competition from companies which provide
decommissioning, installation, and/or transport services using cranes and
barges. In addition, several companies have offered and/or proposed solutions
for lifting large platforms in one piece. These involve the use of multiple
barges, twin-hull tankers, split-hull tankers, and U-shaped semi-submersibles.
One such solution, known as Versatruss, is comprised of two barges and an array
of booms, rigging, and winches. The components are assembled together to produce
what is essentially a giant scissors jack. The barges are symmetrically placed
around the platform, and the booms from each barge are placed in receptacles
that have been welded to the platform deck. The barges are pulled together
sideways using winches. This causes the angle of inclination of the booms to
increase, forcing the deck upwards. The Company believes that the utility of
Versatruss and most of these other alternative solutions will be limited to the
lifting of topsides in calm waters. Although some of such lifting systems may be
capable of lifting jackets, the Company believes that the vertical clearance
limitations inherent in each of such systems will inhibit their ability to lift
the jackets onshore. Rather, the Company believes that such systems only will be
capable of towing jackets from one installation site to another. There can be no
assurance, however, that the Company's beliefs will prove to be accurate.

Competition also may arise from vessels, processes, and/or technologies
currently in development, or developed in the future, by other companies. The
development by others of new or improved vessels, processes, or technologies may
make the services to be marketed by the Company less competitive or obsolete.

Many of the Company's current and potential competitors are likely to have
substantially greater financial, managerial, and technical resources than the
Company. There can be no assurance that the Company will be able to compete
successfully in the marketplace, if at all. See "Business--Competition."

UNCERTAIN PROPRIETARY PROTECTION

OSAS has eight patent applications pending in Norway with respect to various
aspects of the Offshore Shuttle design and operation. Patent applications also
are pending in various other countries pursuant to the Patent Cooperation Treaty
and separately filed patent applications. There can be no assurance as to
whether patents will issue from any of OSAS's patent applications or, if issued,
as to the range or degree of protection such issued patents will afford. In
addition, no assurance can be given that others will not obtain patents claiming
aspects similar to those covered by such patent applications or patents, as the
case may be, or that such patents, if issued, will not be challenged by third
parties, invalidated, rendered unenforceable, or designed around.

9
<PAGE>

on the patent rights of others, or that patents do not exist or will not be
issued in the future that would have an adverse effect on the Company's ability
to manufacture or operate the Offshore Shuttle. The Company is aware of the
existence of a Norwegian patent which claims the use of a U-shaped structure
designed for removing and/or installing topsides. Based on the opinion of Bryns
Patentkontor A/S, patent counsel to the Company, the Company believes that the
Offshore Shuttle will not infringe on this Norwegian patent because, unlike the
structure covered by the Norwegian patent, the Offshore Shuttle does not utilize
movable transverse beams mounted to its upper beams. There can be no assurance,
however, that infringement proceedings will not be brought against the Company.

The Company also may desire or be required to obtain licenses from others in
order to further develop, produce, and market the Offshore Shuttle effectively.
There can be no assurance that such licenses will be obtainable on commercially
reasonable terms, if at all, that the patents underlying such licenses will be
valid and enforceable, or that the proprietary nature of the unpatented
technology underlying such licenses will remain proprietary. In addition, the
Company relies on unpatented proprietary know-how and trade secrets, and employs
various methods including confidentiality agreements with employees, consultants
and marketing partners to protect its trade secrets and know-how. However, such
methods may not afford complete protection and there can be no assurance that
others will not independently develop such trade secrets and know-how or obtain
access thereto. See "Business-- Proprietary Protection."

DEPENDENCE ON STRATEGIC PARTNERS

The Company's strategy for testing, developing, manufacturing, and
commercializing the Offshore Shuttle concept is dependent upon forming strategic
alliances and relationships with joint venture partners, contract manufacturers,
or other third parties, and upon the subsequent success of these parties in
performing their responsibilities. In this regard, MSOAS has entered into
agreements with OSAS with respect to the rights to the Offshore Shuttle design
and the pre-engineering work necessary to construct the Offshore Shuttles,
Thyssen Stahlunion GmbH ("TSU") with respect to the marketing of its proposed
services, RC Consultants AS ("RC") with respect to its project management and
engineering and operational activities, and with Schuller Industrieentsorgung AG
(formerly Schuller Industrieentsorgung GmbH) with respect to waste management,
onshore dismantling, and oil pollution prevention and cleanup. There can be no
assurance that such arrangements will be successful. If any of these
arrangements are cancelled and/or are unsuccessful, and if the Company is unable
to secure new alliances in their place, there would be a material adverse effect
on the Company. See "Business--Strategic Alliances."

In addition, the Company's proposed offshore decommissioning activities may
require the use of large tug boats, unloading docks, subsea specialists, marine
operators, diving support vessels, and various safety and supply boats. The
Company may seek to form strategic alliances and relationships with third
parties who provide these and other services. If the Company is unable to
negotiate acceptable arrangements, or if any of such arrangements are
unsuccessful, it could have a material adverse effect on the Company.

NO MANUFACTURING FACILITIES OR PERSONNEL

Construction of the first Offshore Shuttle is intended to commence soon
after the closing of the Offering. The Company, however, does not have the
ability to manufacture the Offshore Shuttle. The Company will solicit
competitive bids from at least three construction contractors which it believes
have the capacity and capability to build an Offshore Shuttle. There can be no
assurance that bids will be tendered by capable construction contractors, or at
all. In addition, if such bids are tendered, no assurance can be given that the
Company will be able to negotiate acceptable joint venture or contract
manufacturing arrangements, or that any such arrangements will be successful.

If the Company is unable to have third parties manufacture the Offshore
Shuttle pursuant to joint venture or contract manufacturing agreements or
otherwise, or if the Company decides to manufacture the

10
<PAGE>
Offshore Shuttle itself, the Company will be required to establish the necessary
manufacturing facility (which will require substantial additional financing) and
employ and train qualified manufacturing personnel, all of which may result in
production delays. There can be no assurance that the Company will be successful
in attracting and retaining experienced personnel or establishing the necessary
manufacturing facilities or arrangements that will enable the Company to
manufacture the Offshore Shuttle in a cost-effective manner, or at all. The
failure to achieve these objectives would have a material adverse affect on the
Company. See "Business--Business Strategy."

LIMITED MARKETING AND SALES CAPABILITIES

The Company has limited marketing and sales capabilities. If the marketing
agreement with TSU is cancelled or is unsuccessful, the Company will need to
develop a sales force and marketing group with technical expertise, or make
appropriate arrangements with other joint venture partners. There can be no
assurance that such efforts will be successful. In addition, there can be no
assurance that the Company will be able to effectively market or sell its
services through sales representatives, through arrangements with an outside
sales force, or through strategic partners. See "Business--Strategic
Alliances--Thyssen Stahlunion GmbH."

UNCERTAIN MARKET ACCEPTANCE

As with any new technology, there is the risk that the market may not
recognize the benefits or the potential applications of the Offshore Shuttle, or
any future products or technologies that may be developed by the Company. Market
acceptance of the Company's services will depend, in large part, upon the
ability of the Company to demonstrate to prospective customers the potential
advantages of the Offshore Shuttle over other types of vessels and/or
technologies performing similar functions. There can be no assurance that the
Company will be successful in marketing its services to the oil and gas industry
or other markets or that the use of the Offshore Shuttle will be embraced by the
oil and gas industry or other markets. See "Business--Strategic Alliances."

RISK OF INTERNATIONAL OPERATIONS

The Company intends to market its services in international markets.
International operations entail various risks, including economic instability
and recessions, exposure to currency fluctuations, difficulties of administering
foreign operations generally, and obligations to comply with a wide variety of
foreign laws and other regulatory requirements. A portion of the Company's
sales, if any, and expenditures may be collected or paid, as the case may be, in
currencies other than the U.S. dollar. Therefore, significant exchange rate
fluctuations could have an effect on the Company's results of operations. In
addition, the laws of certain foreign countries may not protect the Company's
proprietary rights to the same extent as the laws of the United States. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

DEPENDENCE ON KEY PERSONNEL

The Company's success depends to a significant extent upon the services of
Franz Eder, the President and Chairman of the Board of the Company. Mr. Eder has
entered into a two-year employment agreement with the Company which provides
that Mr. Eder shall devote only so much (but not less than 75%) of his
professional and business time, attention, and energies to his duties and
responsibilities as is reasonable to insure the Corporation's proper conduct.
The Company does not have, and has no current plans to obtain, key person life
insurance covering Mr. Eder or any of its other executive officers. The loss of
Mr. Eder's services could have a material adverse effect on the Company. See
"Business--Employees," and "Management."

11
<PAGE>
Management believes that the future success of the Company also will depend
upon the Company's ability to attract and retain highly-skilled managerial and
technical personnel. Competition for such personnel is intense. The Company
competes for such personnel with other companies, academic institutions,
governmental entities and other organizations, some of which may have
substantially greater capital resources than the Company. There can be no
assurance that the Company will be successful in attracting and retaining such
personnel. See "Business--Employees."

SEASONALITY, WEATHER RISKS, AND OTHER FACTORS AFFECTING DEMAND

Offshore decommissioning and installation activity in the North Sea and the
North East Atlantic is highly seasonal principally as a result of weather
conditions. Historically, the greatest demand for offshore decommissioning and
installation services in such regions has been during the period from May
through September. As a result, the Company anticipates that a disproportionate
amount of the Company's future revenues, if any, will be generated during the
second and third quarters of each year. In addition, full year results are not
likely to be a direct multiple of any particular quarter or combination of
quarters. The Company may seek to partially offset the anticipated seasonality
of its proposed operations by pursuing other potential opportunities such as
leasing the Offshore Shuttles to third parties for bridge building, drydocking
ships and floating platforms, and other uses. No assurances can be given that
such other opportunities, if successful, will result in the anticipated offset
of the seasonality of the Company's proposed operations.

Demand for the Company's proposed services also will be affected by the
level of spending by oil and gas companies for decommissioning, installation,
and other similar activities. The expenditures are influenced by the price of
oil and gas, the discovery rates of new oil and gas reserves in offshore areas,
local and international regulations and political and economic conditions, and
the oil and gas industry's access to capital.

RISK OF OPERATIONS; NO INSURANCE

The Company's proposed operations will be subject to all of the inherent
risks of offshore marine activity, including accidents, environmental mishaps,
mechanical failures, and vessels colliding, capsizing, grounding, or sinking.
These occurrences can result in significant personal injury or loss of life,
severe damage to or destruction of property and equipment, pollution or
environmental damage, and suspension of the Company's proposed operations.
Moreover, litigation arising from any such occurrence may result in the Company
being named as a defendant in lawsuits asserting large claims.

The Company intends to obtain insurance against some of these types of
risks. It also anticipates that it will be adequately protected by the insurance
policies of the companies that utilize the Company's services, and it intends to
further limit its risk by capping its liability exposure in its service
contracts with such companies. There can be no assurance, however, that the
policies of such companies will cover the Company or, if they do, that such
insurance (or the insurance obtained by the Company, if any) will be sufficient
or effective under all circumstances or against all hazards to which the Company
may be subject. In addition, there can be no assurance that any contractual
limits on liability will be enforceable or will adequately and effectively limit
the Company's liability exposure, or that the companies that utilize the
Company's services will nevertheless seek to be indemnified by the Company with
respect to any and all losses or damages they suffer or incur. See
"Business--Insurance."

REGULATORY AND ENVIRONMENTAL MATTERS

The Company's operations may be subject to and affected by various types of
national and international regulations. Determining the applicable regulatory
framework will depend, in part, on how the Offshore Shuttles are classified
(e.g., as "ships," "vessels," "installations", etc.), whether (and if so, where)
the Offshore Shuttles are registered or documented, and where the Company's
intended operations are

12
<PAGE>
performed. The Company may be required to obtain certain permits, licenses and
certificates with respect to its proposed operations and to comply with rigorous
safety, workplace, and environmental standards. Moreover, certain employees of
the Company may be covered by laws that operate to make liability limits, if
any, established by state workers' compensation laws inapplicable to these
employees and permit the employees and their representatives to pursue actions
against the Company for job related injuries with generally no limits on the
Company's potential liability.

Violations of various statutes and regulations that may be applicable to the
Company's proposed operations can result in, among other things, civil
penalties, remediation expenses, monetary damages, injunctions, cease and desist
orders, and criminal penalties. Some environmental statutes impose strict
liability, rendering a person liable for environmental damage without regard to
negligence or fault on the part of such person. In addition, because such laws
and regulations are changed frequently, it is difficult for the Company to
accurately predict the cost or impact of such laws and regulations on its
planned operations. See "Business--Regulations."

CONTROL OF BOARD OF DIRECTORS

Franz Eder, the President and Chairman of the Board of the Company presently
owns 7,600,000 shares of Common Stock. Upon consummation of the Offering, Mr.
Eder will beneficially own approximately 14% of the Common Stock. As such, Mr.
Eder will have a significant voice in the election of the Company's directors.
See "Principal Stockholders."

IMMEDIATE SUBSTANTIAL DILUTION

The offering price per share of Common Stock is substantially higher than
the net tangible book value per share of the Common Stock as at June 30, 1998.
Purchasers of shares of Common Stock offered hereby will experience immediate
and substantial dilution of $ , or %, in the net tangible book value per
share of the Common Stock purchased by them in the Offering. Additional dilution
to future net tangible book value per share may occur upon the exercise of
options or warrants that may be issued by the Company in the future. The current
stockholders of the Company acquired their shares of Common Stock, in most
cases, for nominal consideration or for consideration substantially less than
the public offering price of the shares of Common Stock included in the
Offering. See "Capitalization," "Dilution" and "Certain Transactions."

SUBSTANTIAL NUMBER OF SHARES OF COMMON STOCK RESERVED FOR ISSUANCE

The Company has reserved a total of 2,000,000 shares of Common Stock for
issuance upon exercise of options that may be granted pursuant to the Company's
1998 Stock Option Plan (the "Stock Option Plan"). See "Management--Stock Option
Plan." The issuance of options pursuant to the Stock Option Plan may adversely
affect the Company's ability to consummate future equity financings. Further,
the holders of such options may exercise them at a time when the Company would
otherwise be able to obtain additional equity capital on terms more favorable to
the Company. The exercise and sale of the Common Stock underlying the options
would have a dilutive effect on the Company's stockholders, and may have a
material adverse effect on the market price of the Common Stock.

NO DIVIDENDS

The Company has never declared or paid dividends, and does not intend to pay
any dividends in the foreseeable future on shares of Common Stock. Earnings of
the Company, if any, are expected to be retained for use in expanding the
Company's business. The payment of dividends is within the discretion of the
Board of Directors of the Company and will depend upon the Company's earnings,
if any, capital requirements, financial condition, and such other factors as are
considered to be relevant by the Board of Directors from time to time. See
"Dividend Policy."

13
<PAGE>
NO COMMITMENT TO PURCHASE SECURITIES; ESCROW OF SUBSCRIPTION PROCEEDS

Under the terms of the Offering, the Underwriter is offering the Shares on a
"best efforts, all or none" basis. Unless subscriptions are received for all of
the Shares, none of the Shares will be issued and the Offering will be
withdrawn. No person is committed to purchase any of the Shares. Under the terms
of the Offering, subscribers' funds will be returned to subscribers, without
interest thereon or deduction therefrom, if subscriptions for all of the Shares
are not received during the 30 day offering period (which period may be extended
for an additional 30 days, and an additional 5 days solely for the purpose of
allowing checks to clear). During the Offering, subscribers will have no right
to the return of their subscriptions. See "Underwriting."

INEXPERIENCE OF THE UNDERWRITER

The Underwriter was organized in October, 1997, and has participated in
three public offerings since that time. It is not a member of the National
Association of Securities Dealers, Inc., and only recently received its banking
license in Germany. The Underwriter is 40%-owned by Berliner Freiverkehr
(Aktien) AG, a publicly-held financial institution.

LIMITED PUBLIC MARKET FOR THE COMMON STOCK

Prior to the Offering there has been a limited public market for the Common
Stock, and there can be no assurance that a more active public market for the
Common Stock will develop or be sustained after the Offering.

CONFLICTS OF INTEREST; TWO OUTSIDE DIRECTORS

The Board of Directors has the responsibility for fixing the compensation of
the employees of the Company, including the Company's officers. No independent
outside authority reviews or approves the decision of the Board of Directors
concerning compensation. Currently, two of the four directors of the Company are
also officers of the Company and, as a result, have a significant voice in
setting their own compensation.

CERTAIN ANTI-TAKEOVER PROVISIONS

The Company is subject to the provisions of Section 78.411 et seq. of the
Nevada General Corporation Law ("Business Combination Act"). The Business
Combination Act provides, with certain exceptions, that a Nevada corporation may
not engage in any of a broad range of business combinations with a person, or an
affiliate or an associate of such person, who is an "interested stockholder" for
a period of three years from the date that such person became an interested
stockholder, unless the transaction resulting in a person becoming an interested
stockholder, or the business combination, is approved by the board of directors
of the corporation before the person becomes an interested stockholder. The
Business Combination Act further provides that a Nevada corporation may not
engage in such a business combination after the expiration of three years from
the date that such person became an interested stockholder, unless the business
combination is approved by the board of directors of the corporation before the
person became an interested stockholder or by the affirmative vote of a majority
of outstanding votes not beneficially owned by the interested stockholder at a
meeting called not earlier than three years after the interested stockholder's
date of acquiring shares. The Business Combination Act could have the effect of
delaying or preventing a change of control of the Company. See "Description of
Securities--Statutory Business Combination Provisions."

BROAD DISCRETION OVER APPLICATION OF PROCEEDS

The Company intends to utilize the net proceeds of the Offering for
construction of the first Offshore Shuttle, payment of license fees, repayment
of indebtedness, and working capital and general corporate

14
<PAGE>
purposes. The Company, however, reserves the right to change the allocation and
intended use of such net proceeds to the extent that management determines that
such change is advisable. Consequently, management of the Company will have
broad discretion in determining the manner in which the net proceeds of the
Offering will be applied.

POSSIBLE VOLATILITY OF STOCK PRICE

From time to time, the stock market has experienced significant price and
volume fluctuations that may be unrelated to the operating performance of
particular companies. In addition, the market price of the Common Stock, like
the stock prices of many publicly-traded companies, may prove to be highly
volatile. Announcements of innovations or new commercial products by the Company
or its competitors, developments or disputes concerning proprietary rights, as
well as period-to-period fluctuations in financial results, among other factors,
may have a significant impact on the market price of the Common Stock.

SHARES ELIGIBLE FOR FUTURE SALE

Immediately prior to the Offering, there will be 33,587,609 shares of Common
Stock outstanding (assuming the consummation of the Additional OSAS Exchanges),
20,020,000 of which are freely tradeable (subject to certain contractual
restrictions as described below), and 13,567,609 of which (the "Selling
Stockholder Shares") are restricted securities that may be offered by the
Selling Stockholders pursuant to this Prospectus as described below. Of the
20,020,000 freely tradeable shares, 4,750,000 shares are being held by a pooling
trustee and will not be released until August 3, 2001 (see "Principal
Stockholders" and "Underwriting"), and 10,000,000 shares are being held by a
pool administrator and will not be released until three years after the closing
of the Offering (except that 2% of such shares will be released every 90 days
commencing 180 days after the closing of the Offering and additional shares may
be released in exigent circumstances at the discretion of the pool
administrator).

Upon the consummation of the Offering (and the Additional OSAS Exchanges),
there will be 53,587,609 shares of Common Stock outstanding. The 20,000,000
shares of Common Stock being offered by the Company pursuant to this Prospectus
will be immediately tradeable without restriction or further registration under
the Securities Act of 1933, as amended (the "Securities Act"). In addition,
except for the 7,600,000 shares of Common Stock owned by Franz Eder, the
President and Chairman of the Board of the Company, and subject to the continued
effectiveness of the Registration Statement, all of the Selling Stockholder
Shares that may be offered hereby will be immediately tradeable without
restriction or further registration under the Securities Act. Mr. Eder's shares
are being held by a pooling trustee pursuant to the terms of a pooling trust
agreement. Although the disposition of Mr. Eder's shares are covered by the
Registration Statement, pursuant to the pooling trust agreement Mr. Eder cannot
dispose of such shares until they are released to him by the trustee. Mr. Eder
shall receive ten percent of such shares on July 1, 1999, an additional thirty
percent of such shares on July 1, 2000, an additional thirty percent of such
shares on July 1, 2001, and the balance of such shares on July 1, 2002. Subject
to the continued effectiveness of the Registration Statement, such shares shall
be immediately tradeable without restriction or further registration under the
Act upon release of such shares to Mr. Eder. See "Certain Transactions" and
"Shares Eligible for Future Sale."

15
<PAGE>
with respect to such sale. Sales under Rule 144 are also subject to certain
manner of sale provisions and notice requirements and to the availability of
current public information about the Company. Under Rule 144(k), a person who is
not deemed to have been an affiliate of the Company at any time during the 90
days preceding a sale, and who has beneficially owned the shares proposed to be
sold for at least two years (including the holding period of any prior owner
except an affiliate), is entitled to sell such shares without complying with the
manner of sale, public information, volume limitation or notice provisions of
Rule 144.

No prediction can be made as to the effect, if any, that sales of shares of
Common Stock by Mr. Eder or the other Selling Stockholders, or even the
availability of such shares for sale will have on the market prices prevailing
from time to time. The possibility that substantial amounts of Common Stock may
be sold in the public market may adversely affect prevailing market prices for
the Common Stock and could impair the Company's ability to raise capital through
the sale of its equity securities. See "Shares Eligible for Future Sale."

UNDERWRITER'S INFLUENCE ON THE MARKET

A significant number of the Shares may be sold to customers of the
Underwriter. Such customers subsequently may engage in transactions for the sale
or purchase of such securities through or with the Underwriter. If the
Underwriter participates in the market, it may exert a dominating influence on
the market for the Common Stock. Such marketmaking activity may be discontinued
at any time. The price and liquidity of the Common Stock may be significantly
affected by the degree, if any, of the Underwriter's participation in such
market.

LIMITATION OF LIABILITY; INDEMNIFICATION

The Company's Articles of Incorporation: (i) eliminates the personal
liability of the directors of the Company to the fullest extent permitted by the
General Corporation Law of the State of Nevada (the "GCL") and (ii) provides
that the Company shall indemnify, to the fullest extent permitted by the GCL,
any and all persons whom it shall have the power to indemnify under the GCL from
all expenses, liabilities, or other matters referred to in or covered by the
GCL. The By-Laws of the Company provide that the Company shall have the power to
indemnify any person who was or is a party or is threatened to be made a party
to any proceeding (other than an action by or in the right of the Company to
procure a judgment in its favor) by reason of the fact that such person is or
was an agent of the Company, against expenses, judgments, fines, settlements,
and other amounts actually and reasonably incurred in connection with such
proceeding to the fullest extent permitted under the GCL. See
"Management--Limitations of Liability; Indemnification."

RISKS ASSOCIATED WITH FORWARD-LOOKING STATEMENTS INCLUDED IN THIS PROSPECTUS

This Prospectus contains certain forward-looking statements. These
forward-looking statements are based on current expectations that involve
numerous risks and uncertainties. Assumptions relating to the foregoing involve
judgments with respect to, among other things, future economic, competitive, and
market conditions and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond the control of the
Company. Although the Company believes that its assumptions underlying the
forward-looking statements are reasonable, any of the assumptions could prove
inaccurate and, therefore, there can be no assurance that the results discussed
or implied in such forward-looking statements will prove to be accurate. In
light of the significant uncertainties inherent in such forward-looking
statements, the inclusion of such statements should not be regarded as a
representation by the Company or any other person that the objectives and plans
of the Company will be achieved. Words such as "believes," "anticipates,"
"expects," "intends," "may," and similar expressions are intended to identify
forward-looking statements, but are not the exclusive means of identifying such
statements. The Company undertakes no obligation to revise any of these
forward-looking statements.

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<PAGE>
USE OF PROCEEDS

Based on an assumed offering price of $ per Share, the net proceeds to
the Company from the sale of the Shares, after deduction of underwriting
discounts and other estimated offering expenses, are estimated to be
approximately $ . The Company intends to utilize such net proceeds as
follows:

<TABLE>
<CAPTION>
APPROXIMATE APPROXIMATE
AMOUNT OF NET PERCENTAGE OF NET
PROCEEDS(1) PROCEEDS
-------------- -----------------
<S> <C> <C>
Construction of First Offshore Shuttle (2)..................................... $ 80,000,000 %
License Fees (3)............................................................... $ 8,500,000 %
Repayment of Indebtedness (4).................................................. $ 2,350,000 %
Working Capital and General Corporate Purposes................................. $ %
-------------- ------
Total...................................................................... $ 100%
-------------- ------
-------------- ------
</TABLE>

- ------------------------

(1) The amount set forth with respect to each purpose represents the Company's
current estimate of the approximate amount of the net proceeds that will be
used for such purpose. However, the Company reserves the right to change the
amount of such net proceeds that will be used for any purpose to the extent
that management determines that such change is advisable. Consequently,
management of the Company will have broad discretion in determining the
manner in which the net proceeds of the Offering are applied. See "Risk
Factors--Broad Discretion Over Application of Proceeds."

(2) Represents the estimated cost of engineering and building the first Offshore
Shuttle and acquiring the marine equipment necessary for its operations. See
"Business--The Offshore Shuttle."

(3) Represents estimated license fees (i.e., the construction fee, operating
fee, and exclusivity fee) payable to OSAS with respect to the first Offshore
Shuttle pursuant to the License Agreement. See "Business--Strategic
Alliances--Offshore Shuttle AS."

(4) Represents the approximate amount of money (including accrued interest
through September 30, 1998) due under bridge notes issued by the Company
(the "Bridge Notes"), the proceeds of which were used for general operating
purposes. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and "Certain Transactions."

Based on its current plans and assumptions relating to its proposed
activities, the Company anticipates that the net proceeds of the Offering should
be sufficient to satisfy the Company's cash requirements until construction of
the first Offshore Shuttle is completed. Proceeds not immediately required for
the purposes described above will be invested in government securities and
short-term, investment grade, interest bearing investments of varying
maturities. However, there can be no assurance that the net proceeds of the
Offering will satisfy the Company's requirements for any particular period of
time. If the Company identifies additional opportunities or new applications for
its technology which require additional internal development efforts, then the
Company may require additional financing after the use of the net proceeds of
the Offering to pursue such opportunities. No assurance can be given that such
additional financing will be available when needed on terms acceptable to the
Company, if at all. See "Risk Factors--Dependence on Offering; Possible Need for
Additional Financing."

17
<PAGE>
DIVIDEND POLICY

The Company has never declared or paid dividends, and does not intend to pay
any dividends in the foreseeable future on shares of Common Stock. Earnings of
the Company, if any, are expected to be retained for use in expanding the
Company's business. The payment of dividends is within the discretion of the
Board of Directors of the Company and will depend upon the Company's earnings,
if any, capital requirements, financial condition and such other factors as are
considered to be relevant by the Board of Directors from time to time.

CAPITALIZATION

The following table sets forth the capitalization of the Company as of June
30, 1998 (i) on an actual basis, and (ii) on a pro forma basis to give effect to
the sale of the Shares by the Company and to certain financial events occurring
subsequent to June 30, 1998.

<TABLE>
<CAPTION>
JUNE 30, 1998
------------------------------
ACTUAL PRO FORMA(1)
-------------- --------------
<S> <C> <C>
Notes payable.................................................................... $ 1,265,781 $ 0
-------------- --------------
Stockholder's equity:
Common stock, par value $.001 per
share; 75,000,000 shares authorized;
27,620,000 issued (actual), 53,587,609
(pro forma).................................................................... 27,620(2)
Additional paid-in capital....................................................... 22,926,380
-------------- --------------
Cumulative foreign exchange adjustment........................................... (39,802)
Accumulated deficit.............................................................. (1,222,577)
-------------- --------------
--------------
Total stockholders' equity (deficit)............................................. $ 21,691,621
-------------- --------------
Total capitalization............................................................. $ (22,957,402)
-------------- --------------
-------------- --------------
</TABLE>

- ------------------------

(1) Adjusted to give effect to (i) the sale of the Shares (at an assumed public
offering price of $ per Share), (ii) the repayment of monies advanced
under the Bridge Notes upon completion of the Offering, (iii) the
consummation of the OSAS Exchanges, and (iv) the consummation of the
Additional OSAS Exchanges.

(2) Excludes the 4,937,607 shares of Common Stock issued in the OSAS Exchanges
that are being held in escrow subject to completion of the Offering.

18
<PAGE>
DILUTION

The difference between the offering price per share of Common Stock and the
net tangible book value per share after the Offering constitutes the dilution to
investors in the Offering. Net tangible book value per share is determined by
dividing the net tangible book value of the Company (total tangible assets less
total liabilities) by the number of outstanding shares of Common Stock.

At June 30, 1998, the Company had a net tangible book value of $(1,004,651)
or $(0.04) per share of Common Stock. After giving effect to (i) the sale of the
Shares at an assumed public offering price of $ per share (after deducting
underwriting discounts and commissions and estimated offering expenses payable
by the Company), (ii) the OSAS Exchanges, and (iii) the Additional OSAS
Exchanges, the pro forma net tangible book value of the Company at June 30, 1998
would have been $ or $ per share. This represents an immediate
increase in pro forma net tangible book value of $ per share to the existing
stockholders of the Company and an immediate dilution of $ ( %) per share to
new investors. The following table illustrates the foregoing information with
respect to dilution to new investors on a per share basis:

<TABLE>
<S> <C> <C>
Assumed public offering price per share........................ $ $
Net tangible book value per share prior to the Offering........ $ (0.04)
Increase per share attributable to the Offering................ $
Pro forma net tangible book value per share after the
Offering..................................................... $
---------
Dilution to new investors...................................... $
---------
---------
</TABLE>

The following table sets forth as of the date of this Prospectus, with
respect to the Company's existing stockholders and new investors, a comparison
of the number of shares of Common Stock acquired from the Company, the
percentage ownership of such shares, the total consideration paid, the
percentage of total consideration paid, and the average price per share paid.

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
--------------------------- --------------------------- PRICE PER
NUMBER PERCENT AMOUNT PERCENT SHARE
-------------- ----------- -------------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Existing Stockholders.............................. 33,587,609(1) 63% $ 40,856,827 % $ 1.22
New Investors...................................... 20,000,000 37% $ % $
-------------- --- -------------- ---
Total.............................................. 53,587,609 100% $ 100%
-------------- --- -------------- ---
-------------- --- -------------- ---
</TABLE>

To the extent subsequently granted options or warrants are exercised, there
could be further dilution to new investors. See "Risk Factors--Substantial
Number of Shares of Common Stock Reserved For Issuance" and "Management--Stock
Option Plan."

- ------------------------

(1) Assumes completion of the Additional OSAS Exchanges.

19
<PAGE>
PRICE RANGE OF COMMON STOCK

The Common Stock commenced trading on the OTC Bulletin Board on December 22,
1997 and is traded under the symbol "ZSUB". The following table sets forth for
the periods indicated the high and low bid quotations for the Common Stock as
reported on the OTC Bulletin Board. These quotations reflect inter-dealer
prices, without retail mark-up, mark-down or commission, and may not necessarily
represent actual transactions.

<TABLE>
<CAPTION>
HIGH LOW
--------- ---------
<S> <C> <C>
1997
Fourth Quarter (from December 22, 1997)......................................................... $ 4 $ 3
1998
First Quarter................................................................................... $ 5.75 $ 3.50
Second Quarter.................................................................................. $ 7.3125 $ 5
Third Quarter................................................................................... $ 6.5625 $ 3.50
Fourth Quarter (through October 12, 1998)....................................................... $ 4.1875 $ 4
</TABLE>

On October 13, 1998, the last sale price of the Common Stock as reported on
the OTC Bulletin Board was $4.03125 per share. As of October 2, 1998, there were
approximately 73 holders of record of the Common Stock.

SELECTED CONSOLIDATED FINANCIAL DATA

The following data presents for the periods indicated certain consolidated
financial information for the Company. Such data should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Financial Statements and related notes thereto included
elsewhere in this Prospectus.

<TABLE>
<CAPTION>
MAY 23, 1997
(INCEPTION)
THROUGH SIX MONTHS ENDED
DECEMBER 31, 1997 JUNE 30, 1998
------------------ -------------------
<S> <C> <C>
(UNAUDITED)
CONSOLIDATED STATEMENTS OF OPERATIONS DATA:
Total costs and expenses................................................. 164,931 1,064,853
Net (loss)............................................................... $ (164,931) $ (1,057,646)
Net (loss) per share..................................................... $ (0.01) $ (0.04)
------------------ -------------------
------------------ -------------------
Weighted average number of common shares outstanding..................... 25,811,892 27,620,000
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
1997 JUNE 30, 1998
----------------- --------------
<S> <C> <C>
(UNAUDITED)
CONSOLIDATED BALANCE SHEET DATA:
Working capital (deficiency).................................................. $ (10,931) $ (1,225,754)
Total assets.................................................................. 9,015 23,328,018
Notes payable................................................................. 0 1,265,781
Total liabilities............................................................. 19,946 1,636,397
Accumulated deficit........................................................... (164,931) (1,222,577)
Stockholders' equity (deficiency)............................................. (10,931) 21,691,621
</TABLE>

20
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the
financial statements and notes thereto appearing elsewhere in this Prospectus.
The following information contains forward-looking statements which are subject
to risk and uncertainties. Should one or more of these risks and uncertainties
materialize, actual results may differ from those expressed or implied by the
forward looking statements.

GENERAL

There are now more than 6,500 offshore oil and gas installations worldwide
located on the continental shelf of approximately 53 countries. The Company
believes that over the next 30 years, most of these structures will have to be
decommissioned at an estimated cost of $20 to $40 billion. Offshore Shuttle AS
("OSAS"), a majority-owned Norwegian subsidiary of the Company, has designed a
new generation of vessel (the "Offshore Shuttle") which it believes will be
capable of lifting and carrying most of the largest installations without
extensive cutting or dismantling. MSOAS has entered into a license agreement
with OSAS which gives MSOAS the exclusive right to build and operate five
Offshore Shuttles, and an exclusive option to build and operate an additional
two Offshore Shuttles thereafter.

RESULTS OF OPERATIONS

The Company is in the development stage and has not generated any revenues
to date. From May 23, 1997 (inception) through December 31, 1997, the Company
incurred net losses of $164,931, most of which were attributable to management
fees, consulting fees, and general and administrative expenses.

On December 31, 1997, the Company entered into a securities purchase
agreement with Kaizen Food Corporation ("Kaizen") pursuant to which Kaizen
issued 100 shares of its common stock (constituting a 50% interest in Kaizen) to
the Company for $100,000 (the "Kaizen Agreement"). Pursuant to the Kaizen
Agreement, Kaizen had the right to repurchase the shares for $50,000 if the
Company did not raise $500,000 for Kaizen on or before January 20, 1998. The
Company did not raise the additional capital and Kaizen repurchased the stock
for $10,000 in April, 1998 in full satisfaction of the repurchase price.

In April, 1998, the Company acquired all of the issued and outstanding stock
of MSOAS in exchange for 7,600,000 shares of Common Stock. In May, 1998, the
Company acquired 3,291,738 shares of OSAS (approximately 68% of the outstanding
OSAS capital stock) in exchange for 4,937,607 shares of Common Stock (the "OSAS
Share Exchanges"). All of such shares are being held in escrow subject to
completion of the Offering. On May 20, 1998, the Company entered into two
agreements to acquire an additional 686,668

21
<PAGE>

shares of OSAS (approximately 14% of the outstanding OSAS capital stock) in
exchange for 1,030,002 shares of Common Stock (the "Additional OSAS Exchanges").
Subject to the satisfaction of certain conditions precedent, the Company
anticipates that the Additional OSAS Exchanges will close soon after the
completion of the Offering.

The Company incurred net losses of $1,057,646 for the six-month period ended
June 30, 1998, of which $418,268 was attributable to the amortization of
goodwill arising from the acquisition of MSOAS as well as other intangibles.
Most of the balance of the net losses was attributable to consulting fees
($125,096), legal fees ($99,546), office and printing expenses ($111,452), and
the write down of the Kaizen investment ($90,000).

Management anticipates that the Company will continue to incur losses at
least through the year 2001 and there can no assurance that the Company will not
continue to incur losses thereafter.

BUSINESS STRATEGY

Construction of the first Offshore Shuttle is intended to commence soon
after the closing of the Offering. The Company intends to solicit competitive
bids from at least three construction yards which it believes have the capacity
and capability to build an Offshore Shuttle. The Company anticipates that the
construction of the first Offshore Shuttle will be completed by August, 2000, at
the earliest. Subject to the receipt of additional financing, construction
delays, market conditions, demand for the Company's services, and other factors,
construction of an additional Offshore Shuttle is intended to commence in each
of the four years after delivery of the first Offshore Shuttle, until a total
five Offshore Shuttles are in operation. MSOAS has an option to build an
additional two Offshore Shuttles thereafter.

The Company intends to focus its initial efforts on the decommissioning
market in the North Sea, the North East Atlantic, and other regions where it
anticipates the advantages of using the Offshore Shuttle to decommission large,
intermediate depth structures will be most prominent. The Company estimates that
300 to 400 of such structures currently exist for which use of the Offshore
Shuttle would be ideal. The Company ultimately intends to provide a full range
of services, including decommissioning, installing, transporting, and
recycling/disposing of various types of structures.

Offshore decommissioning and installation activity in the North Sea and the
North East Atlantic is highly seasonal principally as a result of weather
conditions. Historically, the greatest demand for offshore decommissioning and
installation services in such regions has been during the period from May
through September. The Company may seek to partially offset the anticipated
seasonality of its proposed operations by pursuing other potential opportunities
such as leasing the Offshore Shuttle to third parties for bridge building,
drydocking ships and floating platforms, and other uses. No assurances can be
given that such other opportunities, if successful, will result in the
anticipated offset of the seasonality of the Company's proposed operations.

The principal currency used in the offshore decommissioning industry is the
U.S. dollar. Consequently, the Company anticipates that it will conduct most of
its business in U.S. dollars, except that the local expenses of its subsidiaries
(e.g., rent, telephone, payroll) are likely to be paid in Norwegian Kroner.
Although the Company may enter into interest rate and foreign currency
transactions on a non-speculative basis, it does not believe that its exposure
to interest rate and foreign currency fluctuations will be material.

22
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

On or about June 6, 1997, the Company's four founders contributed $10,000 to
the Company in exchange for an aggregate of 10,000,000 shares of Common Stock.
On June 15, 1997, the Company sold 10,000,000 shares of Common Stock to various
foreign investors for an aggregate purchase price of $100,000. On August 8,
1997, the Company sold an additional 20,000 shares of Common Stock to various
foreign investors for an aggregate purchase price of $60,000.

As of June 30, 1998, the Company had cash of approximately $410,643, an
accumulated deficit of $1,222,577, stockholders' equity of $21,691,621, and a
working capital deficit of $1,225,754.

Based on its current plans and assumptions relating to its proposed
activities, the Company anticipates that the net proceeds of the Offering should
be sufficient to satisfy the Company's cash requirements until construction of
the first Offshore Shuttle is completed. The Company's future capital
requirements, however, could vary significantly and will depend on numerous
factors, many of which are not within the Company's control. Such factors
include, but are not limited to, the need for cash to fund the construction of
additional Offshore Shuttles, greater than anticipated expenses, market demand,
performance results, and longer engineering, development, and construction times
than now contemplated. See "Business-- Business Strategy." Upon successful
completion of the first Offshore Shuttle, the Company believes it will be able
to fund the construction of additional Offshore Shuttles through future
operating cash flows and short or medium term debt financing. If the Company
identifies additional opportunities or new applications for its technology which
require additional internal development efforts, then the Company may require
additional financing after the use of the net proceeds of the Offering to pursue
such opportunities. See "Risk Factors--Dependence on Offering; Possible Need for
Additional Financing."

Prior to the Offering, the Company entered into a loan agreement (the "Loan
Agreement") with ValorInvest Ltd, an investment bank based in Geneva,
Switzerland ("ValorInvest"), pursuant to which ValorInvest agreed to lend an
aggregate of up to $3,500,000 to the Company at such times as the Company shall
request; provided, however, advances shall be made in increments of $250,000 and
shall not exceed $500,000 in any single month. Pursuant to the Loan Agreement,
the Company issued three non-negotiable promissory notes to ValorInvest in the
aggregate principal amount $3,500,000 (the "Bridge Notes"). Any monies advanced
under the Bridge Notes shall bear interest at the rate of 7.5% per annum, and
shall be due and payable upon the earlier of December 31, 1998 or the completion
of a public offering for gross proceeds of at least $100,000,000. As of June 30,
1998, an aggregate of $1,250,000 had been advanced to the Company under the
Bridge Notes. The proceeds of the Offering will be used, in part, to repay such
indebtedness.

YEAR 2000 ISSUE

Many computer systems record years in a two-digit format. Such systems, if
not modified, will be unable to recognize and properly process information with
dates beyond the year 1999. The potential problems arising out of this inability
commonly are referred to as the "Year 2000 Issue."

The Company believes that the few computers and software programs currently
utilized by the Company and its subsidiaries are Year 2000 ready. Since the
Company currently does not have any material relationships with any suppliers or
clients, no assessment can be made at this time as to the effect third party
non-compliance will have on the Company's proposed operations. In the future,
the Company intends to verify that any suppliers or clients with whom it may
develop a material relationship are Year 2000 compliant.

23
<PAGE>
BUSINESS

GENERAL

The Company intends to focus its initial efforts on decommissioning -- i.e.,
the multi-stage process of removing an offshore oil or gas installation. Removal
typically is accomplished by cutting the particular installation into many
pieces and utilizing crane ships and other support vessels to lift the pieces
onto barges or, in some instances, onto the deck of the crane ships themselves.
Although this procedure may be adequate for the small, shallow water
installations that require relatively little cutting to be removed, the
extensive cutting and lifting required with respect to the larger platforms
situated in deeper waters makes decommissioning such installations using such
procedure difficult, dangerous, time-consuming, and expensive.

Offshore Shuttle AS ("OSAS"), a majority-owned Norwegian subsidiary of the
Company, has designed a new generation of vessel (the "Offshore Shuttle") which
the Company believes will be capable of lifting and carrying most of the largest
installations without extensive cutting or dismantling. MSOAS has entered into a
license agreement with OSAS which gives MSOAS the exclusive right to build and
operate five Offshore Shuttles, and an exclusive option to build and operate an
additional two Offshore Shuttles thereafter. See "Strategic Alliances--Offshore
Shuttle AS."

THE MARKET

There are now more than 6,500 offshore oil and gas installations worldwide
located on the continental shelf of approximately 53 countries. Of these, there
are approximately 4,000 structures in the Gulf of Mexico, 950 in Asia, 700 in
the Middle East, 400 in Europe, and the balance are scattered throughout the
rest of the world. Of the European total, more than 300 are in the North Sea and
the North East Atlantic.

Many different types of installations exist, each one being uniquely
designed based on the water depth, seabed characteristics, and reservoir, wave,
and current conditions of the site of installation. Of the current installed
base of structures, the vast majority (more than 5,800) are fixed steel
installations. Although most fixed steel installations are situated in shallow
waters (i.e., less than 75 meters), there are three to four hundred fixed steel
installations situated in intermediate water depths (i.e., 75 to 200 meters).
These deeper water structures tend to be much larger than their shallow water
counterparts.

Fixed steel installations are comprised of two elements: the topside and the
substructure or "jacket." The topside is the above-water portion of the
installation that contains the processing, drilling, and accommodation
facilities. Topsides vary enormously in size and function. Weights range from a
few hundred tons for small topsides in the Gulf of Mexico to over 50,000 tons
for large topsides in the North Sea. Topsides may be built as separate modules,
as an integrated unit, or as a combination of the two (i.e., an integrated deck
containing process facilities topped by individual modules). The choice of
system depends on the facilities required and the method by which the topside is
installed. Topsides typically are transported offshore either on barges or on
the deck of the crane ships.

24
<PAGE>

A jacket is a lattice-work of steel tubes anchored to the seabed by piles
driven up to 100 meters into the soil. They can weigh over 30,000 tons have a
wide base (up to 120 meters across), and taper towards the top. The vast
majority of jackets are transported to their offshore site by barge. Small
jackets can be lifted off the barge and placed in the water vertically. Large
jackets, whether barge launched or crane lifted, enter the water horizontally
and are then ballasted by controlled flooding to the vertical position before
being lowered into place. Once the jacket is piled into the seabed, the topside
generally is installed by crane.

In addition to fixed steel structures, the installed base includes concrete
gravity base structures (typically found in shallow and intermediate water
depths), various types of floating structures such as tension leg platforms,
floating production platforms, spars, and floating production, storage and
offloading vessels (typically situated in deep waters --i.e., more than 200
meters), and subsea structures which include the equipment needed to develop
satellite fields and the seabed equipment associated with floating
installations.

The Company believes that over the next 30 years, most of the installed base
of structures will have to be decommissioned at an estimated cost of $20 to $40
billion. It is anticipated that significant portion of this amount will be spent
on the three hundred to four hundred large, steel, intermediate water depth
installations that are substantially more difficult to remove using existing
technology than their shallow water counterparts. This is most evident in the
North Sea and the North East Atlantic where, due to the harsh environment and
the significant number of large, intermediate depth steel structures, the
anticipated decommissioning costs are considerably greater than in the rest of
the world. Indeed, it is estimated that approximately fifty to sixty percent of
worldwide decommissioning costs will be spent in the North Sea and the North
East Atlantic, even though such regions account for just five percent of the
total number of installations. The Company's initial decommissioning efforts
will focus on these large, intermediate depth steel structures.

DECOMMISSIONING

Decommissioning is the multi-stage process of removing an offshore oil or
gas installation. The process includes planning and engineering the removal of
the installation, obtaining necessary regulatory approvals, removing the
installation, sealing the wells, and transporting the installation for re-use,
recycling, or disposal. Removal costs can range from $2 million for smaller
platforms in shallow waters to more than $140 million for larger ones in deeper
waters.

A number of different methods may be utilized to remove an offshore
installation. Determining which method is most appropriate for a particular
installation is a function of numerous factors, including the installation's
size, weight, construction type, and distance from shore, the water depth,
seabed characteristics, reservoir, wave, and current conditions of the site of
installation, and safety considerations. The typical method of removal involves
cutting the particular structure into many pieces. Crane ships and other support
vessels are used to lift the pieces onto barges or, in some instances, onto the
deck of the crane ships themselves. The cutting is necessitated by the limited
lifting capabilities of existing crane ships. Complications often arise,
however, in determining the maximum lift capability during decommissioning
operations. The largest cranes theoretically are capable of lifting objects up
to 14,000 tons. During an actual lift, however, various factors including safety
and operational constraints (e.g., vertical and horizontal clearance, the
required outreach and/or upreach of the crane boom, anchoring requirements, and
proximity to other facilities, subsea wellheads, and pipelines), location
characteristics, and the size and structural integrity of the pieces to be
lifted all will significantly reduce the theoretical lift capability. This is
best illustrated by the recent removal of the Odin jacket in Norway. Two cranes,
with a combined maximum theoretical lift capacity of 14,000 tons, were engaged
to remove a jacket that weighed approximately 10,000 tons. Despite the
significant disparity between the cranes' maximum theoretical lift capacity and
the weight of the jacket, the jacket had to be cut into four sections, each of
which were lifted separately.

25
<PAGE>
Several companies have offered and/or proposed solutions for lifting large
platforms in one piece. These involve the use of multiple barges, twin-hull
tankers, split-hull tankers, and U-shaped semi-submersibles. One such solution,
known as Versatruss, is comprised of two barges and an array of booms, rigging,
and winches. The components are assembled together to produce what is
essentially a giant scissors jack. The barges are symmetrically placed around
the platform, and the booms from each barge are placed in receptacles that have
been welded to the platform deck. The barges are pulled together sideways using
winches. This causes the angle of inclination of the booms to increase, forcing
the deck upwards. The Company believes that the utility of Versatruss and most
of these other alternative solutions will be limited to the lifting of topsides
in calm waters. Although some of such lifting systems may be capable of lifting
jackets, the Company believes that the vertical clearance limitations inherent
in each of such systems will inhibit their ability to lift the jackets onshore.
Rather, the Company believes that such systems only will be capable of towing
jackets from one installation site to another. There can be no assurance,
however, that the Company's beliefs will prove to be accurate. See "Risk
Factors--Competition; Technological Obsolescence," and "Competition."

Removal of a few of the larger, older jackets that are equipped with
flotation tanks may be attempted by re-floating them. During installation, the
flotation tanks were used to temporarily float the jackets. Foundation piles
were then added to fasten these structures to the seabed, the flotation tanks
were ballasted, and any temporary buoyancy aids were removed. If the flotation
tanks can be deballasted and the foundation piles can be removed or equipped
with temporary buoyancy aids, then it might be possible to refloat the
structure. Given the age of these structures, however, the condition of the
flotation tanks is questionable. Moreover, transporting the large floating
jacket would create a sizeable wake, thus limiting access to coastal locations.

Certain countries also permit the decommissioning of offshore oil and gas
structures by partially removing them or by toppling the structures and leaving
them on the seabed. Indeed, decommissioning guidelines issued by the
International Maritime Organization, a technical arm of the United Nations
dealing with safety of navigation, provide that certain platforms, depending on
their size and water depth, may be partially removed or toppled provided that
the remains are covered by an unobstructed water column at least 55 meters deep
to allow for seagoing traffic. Many countries, however, citing environmental and
other concerns, do not allow these forms of decommissioning in their territorial
waters. Indeed, in July, 1998, the contracting parties to the Convention for the
Protection of the Marine Environment of the North East Atlantic (also known as
the "OSPAR Convention"), which include the United Kingdom, Ireland, France,
Spain, Portugal, Belgium, Germany, Denmark, Norway, Sweden, Finland, Luxembourg,
the Netherlands, Iceland, the European Union, and Switzerland, agreed to
restrictions more stringent than those set forth in the IMO guidelines. Based on
the premise that reuse, recycling, or onshore disposal generally will be the
preferred options for decommissioning offshore platforms, the OSPAR Convention
provides for a ban, effective February, 1999, on the dumping and the leaving
(wholly or partially) in place of disused offshore installations located in the
North Sea, the North East Atlantic, and certain other regions. Permits may be
issued for alternative means of disposal if significant reasons can be shown as
to why such alternative means are preferable to reuse, recycling, or onshore
disposal.

The Company believes that the Offshore Shuttle will represent a new,
cost-effective alternative for decommissioning offshore oil and gas platforms,
particularly large, intermediate depth structures.

THE OFFSHORE SHUTTLE

OPERATION. The Offshore Shuttle's design is based on the Archimedes
principle: putting water into a floating object will cause it to submerge, and
letting water out will cause it to rise. In essence, the Offshore Shuttle is
designed to be a large buoyancy tank that can be submerged for placement under
or adjacent to an offshore installation and then elevated to lift the
installation.

26
<PAGE>
The Company envisions a typical platform removal operation commencing with
the preparation of the Offshore Shuttle at its home base and the preparation of
the platform for removal. Pre-removal preparations will include conducting a
detailed analysis and preparing a comprehensive method statement of all of the
tasks to be performed in the removal operation, adjusting the Offshore Shuttle's
lifting frame for the installation to be removed, and equipping the topside
support legs or the underside of the topside deck with specially-prepared
docking connections. Upon completion of the pre-removal preparations, the
Offshore Shuttle will be towed (it is not a self-propelled vessel) to the
offshore site by several vessels, one of which will serve as the control center
for the removal operation.

The topside will be removed first. The Offshore Shuttle will be partially
submerged (i.e., ballasted) and guided into position under the topside by the
use of guidance tugs and/or mooring anchors. The tugs and/or the anchors will
keep the Offshore Shuttle in position while the topside is cut from the jacket
(alternatively, the Offshore Shuttle can be moved into position after cutting
the topside from the jacket). Once cut, the topside and the jacket will be
temporarily secured to each other by clamps that will be designed specifically
for the installation being removed. The Offshore Shuttle will be deballasted,
causing it to rise in the water until the lifting frame on the Offshore Shuttle
connects with the docking connections on the topside. The temporary clamps then
will be unfastened from the jacket. Once the topside is lifted, it can be
seafastened to the Offshore Shuttle for transport to another offshore site, or
to a land site for dismantling or refurbishment.

The Offshore Shuttle then will be tugged to the offshore location to perform
the jacket removal. At the site, the Offshore Shuttle will be ballasted at one
end so that it is sitting vertically in the water. It will be maneuvered by tugs
and/or mooring anchors into position and connected with the jacket. The tugs
and/or the anchors will keep the Offshore Shuttle in place while the connection
to the jacket is made. The top of the jacket will be connected by tension
mechanisms to the top of the Offshore Shuttle and the jacket legs will be cut at
the seabed (alternatively, the Offshore Shuttle can be moved into position after
cutting the jacket legs at the seabed). The Offshore Shuttle will "scoop up" the
jacket by deballasting into its original horizontal position. The jacket will be
seafastened to the Offshore Shuttle and transported to another offshore site, or
to a land site for dismantling or refurbishment.

The Company believes the Offshore Shuttle will be able to remove most of the
largest topsides in one piece and also will be capable of diving partly below
the water surface to remove a complete jacket in one operation. The maximum
weight of the structures which can be handled is a matter of design, but the
Company believes that a 15,000 ton Offshore Shuttle will be capable of lifting
most of the largest structures (i.e., topsides or platforms) (up to
approximately 25,000 tons) in one piece without the use of large crane barges.

Once a structure is removed, the Company believes that the Offshore Shuttle
will be able to be used as a barge for transport. It is anticipated that the
removed structure will lie in project-specific cradles on the Offshore Shuttle
to help prevent damage to the object during transportation. This is particularly
important where reuse of the marine structure is of interest. In addition, the
Company believes that it may be possible to design the Offshore Shuttle with a
cover at one end so that by ballasting it 180 degrees into a vertical position,
a very large working deck would be created 50 to 60 meters above water level. If
so, the working deck could be positioned above structures (e.g., ships) or
beneath structures (e.g., bridges) for use as a platform from which equipment
could be operated.

The cost of constructing each Shuttle is estimated to be around $80 million
compared to an estimated minimum cost of $200 million to build a crane ship.
Moreover, the Company anticipates that approximately 20 people will be required
for a typical Offshore Shuttle decommissioning operation compared to the typical
crane ship operation that requires up to 200 people. Additional support vessels
are needed for both crane ship or Offshore Shuttle operations.

The Company believes that the Offshore Shuttle's principal advantage over
existing decommissioning methods will be its ability to remove and carry large
structures in one piece. By eliminating the need to cut

27
<PAGE>
installations into many smaller units, offshore operation time, costs, and risks
will be significantly reduced and reuse of the installation will become a more
viable alternative. The Company believes the Offshore Shuttle's anticipated
versatility will make it a unique alternative for handling marine objects both
inshore and offshore.

DIMENSIONS. Based on current designs, each Offshore Shuttle will consist of
six longitudinal tubes, four transverse tubes, and twelve vertical tubes.
Although the dimensions of each Offshore Shuttle will vary based on the average
size installation a particular Offshore Shuttle is designed to handle, it is
anticipated that the Offshore Shuttles will be 130 to 200 meters long, 70 to 95
meters wide, and 60 meters high. The diameter of each tube will be approximately
10 meters. Each tube will be ring-stiffened in order to resist the hydrostatic
pressure associated with installation or retrieval of marine structures. The
longitudinal tubes may be ballasted by letting water in or deballasted by
pumping water out.

There may be a fixed, 4,000 ton ballast in one of the outer transverse tubes
to ensure sufficient stability. In addition, there will be separate ballasting
compartments at one end of the two outer lower longitudinal tubes. These
compartments will enable the Offshore Shuttle to maintain a horizontal position
when the center of gravity of the object being transported or unloaded is close
to the bottom of the Offshore Shuttle.

It is anticipated that the total weight of each Offshore Shuttle will range
from 8,000 tons to 15,000 tons, depending upon the task for which it is
designed. The main dimensions (as described above) may be subject to change
depending on the Company's determination of the number and types of marine
objects which are to be installed or removed in the foreseeable future. It is
the Company's intention to have each Offshore Shuttle built for a dedicated
region.

TESTING. The Company believes that the technical risks associated with the
Offshore Shuttle concept have been reduced by extensive model testing and
rigorous calculations. Using a 1:50 scale model of an Offshore Shuttle, motions
in different ballast conditions were tested; ballasting/deballasting sequences
were tested without any marine object, with a 1:50 scale model of 7,000 ton
jacket, and with a 1:50 scale model of an 8,000 ton topside; and hydrodynamics
were tested by examining the motions of the Offshore Shuttle (with and without a
marine object) in different positions and when subjected to wave forces, as well
as its towing resistance in calm water and storm. In addition, based on
engineering documentation, calculations, and model testing, Det Norske Veritas
AS an internationally-recognized society responsible for classification and
technical inspections of merchant vessels, issued a Statement of Approval
verifying the technical feasibility of the Offshore Shuttle concept for the
transport and removal of certain offshore platform deck structures and jackets.

BUSINESS STRATEGY

28
<PAGE>

services, and other factors, construction of an additional Offshore Shuttle is
intended to commence in each of the four years after delivery of the first
Offshore Shuttle, until a total five Offshore Shuttles are in operation. MSOAS
has an option to build an additional two Offshore Shuttles thereafter. There can
be no assurance, however, as to the time required to complete such construction
efforts or that such efforts can be successfully completed at all.

The Company intends to focus its initial efforts on the decommissioning
market in the North Sea, the North East Atlantic, and other regions where it
anticipates the advantages of using the Offshore Shuttle to decommission large,
intermediate depth structures will be most prominent. The Company estimates that
300 to 400 of such structures currently exist for which use of the Offshore
Shuttle would be ideal. In the North Sea alone, there are approximately 100
steel jackets in water depths greater than 75 meters. The Company ultimately
intends to provide a full range of services, including decommissioning,
installing, transporting, and recycling/disposing of various types of
structures.

Offshore decommissioning and installation activity in the North Sea and the
North East Atlantic is highly seasonal principally as a result of weather
conditions. Historically, the greatest demand for offshore decommissioning and
installation services in such regions has been during the period from May
through September. The Company may seek to partially offset the anticipated
seasonality of its proposed operations by pursuing other potential opportunities
such as leasing the Offshore Shuttle to third parties for bridge building,
drydocking ships and floating platforms, and other uses. No assurances can be
given that such other opportunities, if successful, will result in the
anticipated offset of the seasonality of the Company's proposed operations.

STRATEGIC ALLIANCES

The Company's business strategy is dependent upon forming strategic
alliances and relationships with joint venture partners, contract manufacturers,
or other third parties, and upon the subsequent success of these parties in
performing their responsibilities. In this regard, MSOAS has entered into
agreements with OSAS with respect to the rights to the Offshore Shuttle design
and the pre-engineering work necessary to construct the Offshore Shuttles,
Thyssen Stahlunion GmbH ("TSU") with respect to the marketing of its proposed
services, RC Consultants AS ("RC") with respect to its engineering and
operational activities, and Schuller Industrieentsorgung AG (formerly Schuller
Industrieentsorgung GmbH, "Schuller") with respect to waste management, onshore
dismantling, and oil pollution prevention and cleanup.

OFFSHORE SHUTTLE AS. OSAS was established in November 1996 to develop and
sell specialized technology applicable to the field of marine transportation.
Operating from its premises in Oslo, Norway, OSAS now has four full-time
employees and eight independent consultants. In May, 1998, the Company acquired
3,291,738 shares of OSAS (approximately 68% of the outstanding OSAS capital
stock) in exchange for 4,937,607 shares of Common Stock (the "OSAS Exchanges").
All of such shares are being held in escrow subject to completion of the
Offering. On May 20, 1998, the Company entered into two agreements to acquire an
additional 686,668 shares of OSAS (approximately 14% of the outstanding OSAS
capital stock) in exchange for 1,030,002 shares of Common Stock (the "Additional
OSAS Exchanges"). Subject to the satisfaction of certain conditions precedent,
the Company anticipates that the Additional OSAS Exchanges will close soon after
the completion of the Offering.

OSAS is the holder of all licensing and marketing rights to the Offshore
Shuttle. Pursuant to the License Agreement, MSOAS was granted the exclusive
right to build and operate five Offshore Shuttles, an exclusive option to build
and operate an additional two Offshore Shuttles thereafter, and a right of first

29
<PAGE>

refusal with respect to any Offshore Shuttle licenses that OSAS may seek to
grant during a specified future period. MSOAS must place an order for the first
Offshore Shuttle by December 31, 1998. Subject, in each case, to an option to
extend the order dates by twelve months upon payment of a $900,000 option
exercise fee, an order for the second Offshore Shuttle must be placed no later
than six months after successful testing of the first Offshore Shuttle, and the
remaining three Offshore Shuttles must be ordered by June 30th of each year
thereafter. If an order is not placed on or before the required date, then for
the twelve-month period thereafter OSAS shall be entitled to grant a license to
build one Offshore Shuttle to a third party. Based on functional specifications
for each Offshore Shuttle to be agreed upon by MSOAS and OSAS, OSAS shall
provide MSOAS with the pre-engineering work, including designs and descriptions
of operational procedures, necessary to construct the Offshore Shuttles. In
consideration for the licenses granted and services to be provided, OSAS shall
receive a construction fee equal to ten percent of the construction price of
each of the Offshore Shuttles, an operating fee equal to sixteen percent of the
gross profit for each contract concluded by MSOAS involving the use of an
Offshore Shuttle, and an exclusivity fee equal to one percent of the aggregate
construction price of Offshore Shuttles two through five ($2,000,000 of which
must be remitted to OSAS by November 30, 1998).

In addition to its obligations under the License Agreement, it is
anticipated that OSAS will provide the Company with various other services
including engineering verification, technical support, and technical supervision
of the construction and testing of the Offshore Shuttle.

THYSSEN STAHLUNION GMBH. TSU is a subsidiary of Thyssen AG ("Thyssen"), a
conglomerate of more than 323 companies operating worldwide in numerous
industries. In its fiscal year ended September 30, 1997, Thyssen generated sales
of approximately $23 billion with a workforce of approximately 120,000 people.

In addition to its activities in the steel industry, TSU offers offshore
technology and services to its clients including jacket concepts, platform
abandonment/removal, and waste management. Pursuant to the its agreement with
MSOAS, TSU will market the Offshore Shuttle on a worldwide basis to major oil
companies, offshore contractors, and others as part of its package of offshore
services. In addition, TSU shall act as a procurement service center for the
steel and equipment to be used in constructing the Offshore Shuttle, and shall
have a right of first refusal to lease the Offshore Shuttle if TSU is engaged in
any decommissioning, transportation, or installation project. TSU shall receive
a commission at a rate to be agreed upon for its marketing services, and shall
be precluded from promoting any products or services competitive with those of
the Company. Jurgen Ternieden, a director of the Company and Chairman of the
Board of OSAS, is an officer and the head of the Pipes, Offshore, Special
Products Department of TSU.

RC CONSULTANTS AS. RC is a Norwegian engineering company with more than 330
skilled offshore engineers. Pursuant to a personnel agreement with MSOAS, RC
will provide MSOAS with the engineers and technicians needed during the design,
engineering, fabrication, and operation of the Offshore Shuttle. In addition,
pursuant to an accounting services agreement, RC will provide MSOAS with
bookkeeping assistance. Sverre Hanssen, the Chairman of the Board of Directors
of RC, is Chairman of the Board of Directors of MSOAS.

SCHULLER INDUSTRIEENTSORGUNG AG. Schuller is a service company specializing
in waste management, onshore dismantling, and oil pollution prevention and
cleanup. MSOAS and Schuller have entered into a cooperation agreement pursuant
to which Schuller will provide such services to MSOAS, subject to the execution
of a written agreement on a project-specific basis. Franz Eder, the President
and Chairman of the Board of the Company, and Dr. Hubert Besner, a director of
the Company, are members of the Supervisory Board and shareholders of Schuller.

30
<PAGE>
and supply boats. The Company may seek to form strategic alliances and
relationships with third parties who provide these and other services.

The Company believes that the use of these outside parties will help
minimize the Company's fixed costs and increase its flexibility by gaining
access to qualified personnel when needed. There can be no assurance, however,
that such arrangements will be successful. If any of these arrangements are
cancelled and/or are unsuccessful, and if the Company is unable to secure new
alliances in their place, there would be a material adverse effect on the
Company.

PROPRIETARY PROTECTION

Even if patents issue from such patent applications and a competitor were to
infringe thereon, the costs of enforcing such patent rights may be substantial
or even prohibitive. If OSAS chooses not to defend its patent rights, if any,
then the Company may be forced to expend substantial resources to do so. No
assurance can be given that the Company will be successful in any action for
infringement of the technology licensed to it. In addition, there can be no
assurance that the Offshore Shuttle will not infringe on the patent rights of
others, or that patents do not exist or will not be issued in the future that
would have an adverse effect on the Company's ability to manufacture or operate
the Offshore Shuttle. The Company is aware of the existence of a Norwegian
patent which claims the use of a U-shaped structure designed for removing and/or
installing topsides. Based on the opinion of Bryns Patenkontor A/S, patent
counsel to the Company, the Company believes that the Offshore Shuttle will not
infringe on this Norwegian patent because, unlike the structure covered by the
Norwegian patent, the Offshore Shuttle does not utilize movable transverse beams
mounted to its upper beams. There can be no assurance, however, that
infringement proceedings will not be brought against the Company.

COMPETITION

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<PAGE>
platform deck. The barges are pulled together sideways using winches. This
causes the angle of inclination of the booms to increase, forcing the deck
upwards. The Company believes that the utility of Versatruss and most of these
other alternative solutions will be limited to the lifting of topsides in calm
waters. Although some of such lifting systems may be capable of lifting jackets,
the Company believes that the vertical clearance limitations inherent in each of
such systems will inhibit their ability to lift the jackets onshore. Rather, the
Company believes that such systems only will be capable of towing jackets from
one installation site to another. There can be no assurance, however, that the
Company's beliefs will prove to be accurate.

REGULATION

Decommissioning of facilities is governed by national legislation within the
framework of a rigorous international and regional regulatory regime. Although
details differ, most oil and gas producing countries have adopted a similar
approach to decommissioning. All feasible options for removal and disposal of
offshore installations are assessed on a case-by-case basis. The offshore
platform operator is required to prepare a decommissioning and abandonment plan
which identifies the decommissioning and abandonment options, evaluates the
technical feasibility of each option, assesses impacts on the environment and on
society, and minimizes risks to human health and safety. The offshore platform
operator then recommends to the responsible ministry the option which best
balances the factors involved.

In 1989, the International Maritime Organization, a technical arm of the
United Nations dealing with safety of navigation, issued guidelines (the "IMO
Guidelines") dealing with the removal of offshore platforms. Recognizing the
magnitude and complexity of removal operations, the IMO Guidelines took into
account not only the size of the platforms but also the capabilities of the
removal vessels. The IMO Guidelines provide that installations weighing less
than 4,000 tons that are in less than 75 meters of water must be completely
removed, while bigger and deeper structures need be only partially removed
provided the remains are covered by an unobstructed water column at least 55
meters deep. For structures emplaced on the seabed on or after January 1, 1998,
the water depth threshold increases from 75 meters to 100 meters. In addition,
all platforms installed on or after January 1, 1998 must be designed so that
removal is feasible.

In July, 1998, the contracting parties to the Convention for the Protection
of the Marine Environment of the North East Atlantic (also known as the "OSPAR
Convention"), which include the United Kingdom, Ireland, France, Spain,
Portugal, Belgium, Germany, Denmark, Norway, Sweden, Finland, Luxembourg, the
Netherlands, Iceland, the European Union, and Switzerland, agreed to
restrictions more stringent than those set forth in the IMO Guidelines. Based on
the premise that reuse, recycling, or onshore disposal generally will be the
preferred options for decommissioning offshore platforms, the OSPAR Convention
provides for a ban, effective February, 1999, on the dumping and the leaving
(wholly or partially) in place of disused offshore installations located in the
North Sea, the North East Atlantic, and certain other regions. Permits may be
issued for alternative means of disposal if significant reasons can be shown as
to why such alternative means are preferable to reuse, recycling, or onshore
disposal.

The Company's proposed operations may be subject to and affected by various
types of national and international regulations. Determining the applicable
regulatory framework will depend, in part, on how

32
<PAGE>

the Offshore Shuttles are classified (e.g., as "ships," "vessels,"
"installations", etc.), whether (and if so, where) the Offshore Shuttles are
registered or documented, and where the Company's intended operations are
performed. The Company may be required to obtain certain permits, licenses and
certificates with respect to its proposed operations and to comply with rigorous
safety and workplace standards. Moreover, certain employees of the Company may
be covered by laws that operate to make liability limits, if any, established by
state workers' compensation laws inapplicable to these employees and permit the
employees and their representatives to pursue actions against the Company for
job related injuries with generally no limits on the Company's potential
liability.

The Company's proposed operations may be affected by numerous international
and national laws and regulations relating to protection of the environment. The
technical requirements of the various laws and regulations are complex and
stringent, and compliance is often difficult and expensive. Certain
environmental laws provide for strict liability for remediation of spills and
releases of hazardous substances and some provide liability for damages to
natural resources or threats to public health and safety. Sanctions for
noncompliance may include revocation of permits, corrective action orders,
administrative or civil penalties, and criminal prosecution.

The Company, however, does not believe that compliance with current
environmental laws and regulations is likely to have a material adverse effect
on the Company. Moreover, the Company anticipates that it will be adequately
protected by the insurance policies of the companies that utilize the Company's
services, and it intends to further limit its risk by capping its liability
exposure in its service contracts with such companies. See "Risk Factors--Risk
of Operations; No Insurance."

INSURANCE

The Company's operations are subject to all of the inherent risks of
offshore marine activity, including accidents resulting in the loss of life or
property, environmental mishaps, mechanical failures, and collisions. The
Company intends to obtain insurance against some of these types of risks. It
also anticipates that it will be adequately protected by the insurance policies
of the companies that utilize the Company's services, and it intends to further
limit its risk by capping its liability exposure in its service contracts with
such companies. There can be no assurance, however, that the policies of such
companies will cover the Company or, if they do, that such insurance (or the
insurance obtained by the Company, if any) will be sufficient or effective under
all circumstances or against all hazards to which the Company may be subject. In
addition, there can be no assurance that any contractual limits on liability
will be enforceable or will adequately and effectively limit the Company's
liability exposure, or that the companies that utilize the Company's services
will nevertheless seek to be indemnified by the Company with respect to any and
all losses or damages they suffer or incur. See "Risk Factors--Risk of
Operations; No Insurance."

EMPLOYEES

Marine Shuttle Operations Inc. employs three people. These employees are not
unionized or employed pursuant to any collective bargaining agreement or any
similar agreement. The Company believes its relationship with its employees is
satisfactory.

The Company's success depends to a significant extent upon the services of
Franz Eder, the President and Chairman of the Board of the Company. Mr. Eder has
entered into a two-year employment agreement with the Company which provides
that Mr. Eder shall devote only so much (but not less than 75%) of his
professional and business time, attention, and energies to his duties and
responsibilities as is reasonable to insure the Corporation's proper conduct.
The loss of Mr. Eder's services could have a material adverse effect on the
Company. See "Management--Executive Compensation" and "Certain Transactions."

The Company also is a party to a two-year employment agreement with Iqbal
Akram. Pursuant to such agreement, Mr. Akram shall devote at least 50% of his
professional and business time to the Company as Vice President. See
"Management--Executive Compensation" and "Certain Transactions."

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<PAGE>
Management believes that the future success of the Company also will depend
upon the Company's ability to attract and retain highly-skilled managerial and
technical personnel. Competition for such personnel is intense. The Company
competes for such personnel with other companies, academic institutions,
governmental entities and other organizations, some of which may have
substantially greater capital resources than the Company. There can be no
assurance that the Company will be successful in attracting and retaining such
personnel.

FACILITIES

The Company's corporate headquarters in the United States are located in
approximately 500 square feet of office space in Houston, Texas. The Company
occupies these premises pursuant to a six-month lease that is automatically
renewed at the end of each lease period for an additional six months unless
either party gives thirty days prior written notice of cancellation.

LEGAL PROCEEDINGS

There are no pending legal or arbitration proceedings to which the Company
or its properties is subject.

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<PAGE>
MANAGEMENT

The following table sets forth the names, ages and positions of the
executive officers and directors of the Company:

<TABLE>
<CAPTION>
NAME AGE POSITION WITH COMPANY
- ---------------------------------------------------- --- ------------------------------------------------------
<S> <C> <C>
Franz Eder.......................................... 38 President and Chairman of the Board
Iqbal Akram......................................... 54 Vice President and a Director
George Wilfred Norman Wareham....................... 45 Treasurer, Chief Financial Officer, and Secretary
Jurgen Ternieden(1)................................. 56 Director
Hubert Besner(1).................................... 35 Director
</TABLE>

- ------------------------

(1) Member of the Audit Committee

FRANZ EDER has been President and the Chairman of the Board of the Company
since April 14, 1998, and a director of MSOAS since December, 1997. He has been
Chairman of the Supervisory Board of Schuller Industrieentsorgung AG (formerly
Schuller Industrieentsorgung GmbH, "Schuller") since May, 1998, and served as
the general manager of Schuller from July, 1997 through May, 1998. From 1992 to
1997, Mr. Eder was General Manager at CETEM Industrieentsorgung und
Wiederverwertung GmbH, a German company engaged in waste management. From 1990
to 1991, he was a consultant to several companies, and from 1989 to 1990, he was
the head of the trade finance department at AMRO Handelsbank AG in Munich,
Germany. Mr. Eder received a Masters of Business degree from Business University
of Vienna in 1985.

IQBAL AKRAM has been a Director of the Company since April 14, 1998. He has
been a Vice President of the Company since February 19, 1998 and served as a
consultant to the Company for a period of approximately two weeks prior thereto.
Since 1992, he has been the managing director and a partner in Peregrine
Consultants, S.A., a Luxembourg management consulting firm. Since 1998, he has
been the sole principal of Peregrine Consultants, United Kingdom. In 1996 and
1997, he served as a group finance and corporate director of the House of Habib,
a Pakistani industrial, manufacturing, and financial services group. In 1995, he
served as group financial advisor to the Southern Electric Group in the
implementation of a power project in Pakistan. He currently is a fellow of the
Institute of Directors and the Institutes of Chartered Accountants in England,
Canada, and Pakistan. He received a Bachelor of Science degree from the London
School of Economics and Political Science in 1965.

GEORGE WILFRED NORMAN WAREHAM has been Treasurer, Chief Financial Officer,
and Secretary of the Company since January 1998, and was a director of the
Company from January 1998 through April 14, 1998. Since May, 1996, Mr. Wareham
has been an owner and operator of Wareham Management Ltd., a management
consulting and accounting services firm servicing a number of American and
Canadian public companies, including the Company. From April 1995 to April 1996,
he was employed on a contract basis as an accountant with Wanzel Sigmund &
Overes, a public practice accounting firm. From April 1993 to February 1995, he
was the President of Global Financial Corporation, an investment company located
in the British West Indies. Mr. Wareham is the Secretary, Treasurer, a director,
and a member of the audit committee of Intercap Resource Management Corp.; the
Secretary, a director, and a member of the audit and compensation committees of
ZMAX Corporation; the Secretary and a director of Solar Energy Limited; a
director and a member of the audit committee of Orko Gold Corporation; director
and a member of the audit and strategic acquisition committees of Bio-Preserve
International Corporation; and a director of Cybernet Internet Services
International, Inc., Pyrocap International Corporation, Amee, Inc., and Novamed,
Inc. Mr. Wareham graduated from Carson Graham High School in Vancouver, Canada
in 1971, and completed a certified general accountants course in 1976.

JURGEN TERNIEDEN has been a director of the Company since April 14, 1998,
Chairman of the Board of OSAS since March 1998, and an officer and the head of
the Pipes, Offshore, Special Products Department

35
<PAGE>
of Thyssen Stahlunion GmbH ("TSU") since 1991. From 1981 to 1990, he was a
senior sales manager and head of the Pipes Department at TSU. Mr. Ternieden
received his intermediate high school certificate from Realschule Muelheim in
1959.

HUBERT BESNER has been a director of the Company since May 6, 1998. Since
1994, he has been a partner in the law firm of Besner Kreifels Weber, Munich,
Germany. From 1992 to 1994, he was the head of the legal department of Schneider
AG, a German real estate development company. He currently is a member of the
supervisory board of Cybernet Internet-Dienstleistungen AG, a director of
Cybernet Internet Services International, Inc., a member of the Supervisory
Board of Schuller, and the head of the supervisory board of PIPECAD Integrierte
Softwaresysteme AG. Dr. Besner received his First State Exam in Law from
Ludwig-Maximilians-Universitat in 1986, and his doctorate magna cum laude from
Ludwig-Maximilians-Universitat in 1988.

No family relationship exists between any director or executive officer and
any other director or executive officer.

EXECUTIVE COMPENSATION

Since its inception through February 19, 1998, no executive officer or
director had received any compensation for services rendered as an executive
officer or director of the Company. Effective as of February 1, 1998, the
Company entered into a six-month consulting agreement with each of Iqbal Akram
and Wareham Management Ltd., a Canadian corporation which is owned and operated
by George Wilfred Norman Wareham. The respective agreements provided for Mr.
Akram to receive $5,000 per month and Wareham Management Ltd. to receive $2,500
per month. On February 19, 1998, Mr. Akram was appointed Vice President of the
Company and his consulting agreement was terminated. On April 14, 1998, the
Company entered into a two-year employment agreement with Mr. Akram (the "Akram
Agreement") pursuant to which Mr. Akram shall devote at least 50% of his
professional and business time to the Company as Vice President and shall
receive a salary of $60,000 per annum. On the same day, the consulting agreement
with Wareham Management Ltd. was terminated. In lieu thereof, the Company
entered into a two-year loan out agreement with Wareham Management Ltd. (the
"Wareham Agreement") for the services of Mr. Wareham. Pursuant to the Wareham
Agreement, Wareham Management Ltd. shall loan out the services of Mr. Wareham to
serve the Company as Chief Financial Officer, Treasurer, and Secretary. In
consideration thereof, Wareham Management Ltd. shall receive an annual fee of
$32,100. See "Certain Transactions."

On June 1, 1998, the Company entered into a two-year employment agreement
with Franz Eder, the President and Chairman of the Board of the Company.
Pursuant to such agreement, Mr. Eder shall devote at least 75% of his
professional and business time to the Company and shall receive a salary of
$100,000 per annum. See "Certain Transactions."

STOCK OPTION PLAN

The purpose of the Company's 1998 Stock Option Plan (the "Stock Option
Plan") is to further the growth and development of the Company by encouraging
and enabling employees, officers, and directors of, and consultants and advisors
to, the Company to obtain a proprietary interest in the Company through the
ownership of stock (thereby providing such persons with an added incentive to
continue in the employ or service of the Company and to stimulate their efforts
in promoting the growth, efficiency, and profitability of the Company), and
affording the Company a means of attracting to its service persons of
outstanding quality. Options granted under the Stock Option Plan may be either
incentive stock options, as defined in Section 422 of the Internal Revenue Code
of 1986, as amended, or non-qualified stock options. The Company has reserved
2,000,000 shares of Common Stock for issuance under the Stock Option Plan. As of
June 30, 1998, no options were outstanding under the Stock Option Plan.

36
<PAGE>
The Stock Option Plan may be administered by the Board of Directors or a
committee of the Board (the "Committee"). The Board of Directors or the
Committee, as the case may be, has the power to determine the terms of any
options granted thereunder, including the exercise price, the number of shares
subject to the option, and the exercisability thereof. Options granted under the
Stock Option Plan generally are not transferable, and each option is exercisable
during the lifetime of the optionee only by such optionee. The exercise price of
all incentive stock options granted under the Stock Option Plan must be at least
equal to 100% (110% in the case of optionees who own more than 10% of the total
combined voting power of all classes of stock of the Company) of the fair market
value of the shares of Common Stock on the date of grant. The term of any option
granted under the Stock Option Plan may not exceed ten years. The specific terms
of each option grant shall be approved by the Board of Directors or the
Committee, as the case may be, and shall be reflected in a written stock option
agreement.

The Plan was adopted by the Board of Directors on May 11, 1998, and was
approved and ratified by the stockholders of the Company as of July 31, 1998.
The Stock Option Plan shall expire at the end of the day on May 11, 2008 (except
as to options outstanding on that date).

LIMITATION OF LIABILITY; INDEMNIFICATION

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<PAGE>
PRINCIPAL STOCKHOLDERS

The following table sets forth, certain information as of October 2, 1998,
regarding beneficial ownership of the Common Stock by (i) each stockholder known
by the Company to be the beneficial owner of more than five percent (5%) of the
outstanding shares of Common Stock; (ii) each director of the Company; (iii)
each executive officer of the Company; and (iv) all of the Company's current
executive officers and directors as a group.

<TABLE>
<CAPTION>
PERCENTAGE OF CLASS
NUMBER OF SHARES OF BENEFICIALLY OWNED
COMMON STOCK ----------------------------------------
NAME OF BENEFICIAL HOLDER BENEFICIALLY OWNED BEFORE OFFERING(2) AFTER OFFERING(2)
- -------------------------------------------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C>
Franz Eder.............................................. 7,600,000(1) 22.6% 14.2%
Iqbal Akram............................................. 0 0% 0%
George Wilfred Norman Wareham........................... 0 0% 0%
Jurgen Ternieden........................................ 332,499(3) * 0%(4)
Hubert Besner........................................... 0 0% 0%
BEG Berliner Effektenbeteiligungsgesellschaft AG (5).... 3,950,000(6)(7) 11.8% 7.4%
Kurfurstendamm 119
10711 Berlin, Germany
All officers and directors as a group (5 persons)....... 7,932,499 23.6% 14.2%
</TABLE>

- ------------------------

(1) Such shares are being held by a trustee pursuant to the terms of a pooling
trust agreement. Such shares may not be disposed of by Mr. Eder until they
are released to him by the trustee. Mr. Eder shall receive ten percent of
such shares on July 1, 1999, an additional thirty percent of such shares on
July 1, 2000, an additional thirty percent of such shares on July 1, 2001,
and the balance of such shares on July 1, 2002. The trustee shall seek
instructions from Mr. Eder before taking any action as a stockholder with
respect to any of the shares held in trust.

(2) Assumes completion of the Additional OSAS Exchanges.

(3) In connection with the OSAS Exchanges, such shares are being held in escrow
pending completion of the Offering.

(4) Assumes all Selling Stockholder Shares are sold pursuant to the Registration
Statement.

(5) A 40%-owned subsidiary of Berliner Freiverkehr (Aktien) AG ("BFAG"). BFAG
also owns 40% of the Underwriter.

(6) Does not include 800,000 shares of Common Stock owned by BFAG.

(7) Such shares, as well as the 800,000 shares of Common Stock owned by BFAG,
are being held by a pooling trustee pursuant to the terms of a pooling trust
agreement and will not be released until August 3, 2001. During such time,
the trustee shall seek instructions from BEG Berliner
Effektenbeteiligungsgesellschaft AG and BFAG, respectively, before taking
any action as a stockholder with respect to any of such shares.

* Less than 1%

38
<PAGE>
SELLING STOCKHOLDERS AND PLAN OF DISTRIBUTION

In April, 1998, the Company acquired all of the issued and outstanding stock
of MSOAS from Franz Eder, the President and Chairman of the Board of the
Company, in exchange for 7,600,000 shares of Common Stock (the "MSOAS
Exchange"). In May, 1998, the Company acquired 3,291,738 shares of OSAS
(approximately 68% of the outstanding OSAS capital stock) in exchange for
4,937,607 shares of Common Stock (the "OSAS Exchanges"). All of such shares are
being held in escrow subject to completion of the Offering. On May 20, 1998, the
Company entered into two agreements to acquire an additional 686,668 shares of
OSAS (approximately 14% of the outstanding OSAS capital stock) in exchange for
1,030,002 shares of Common Stock (the "Additional OSAS Exchanges"). Subject to
the satisfaction of certain conditions precedent, the Company anticipates that
the Additional OSAS Exchanges will close soon after the completion of the
Offering. The Company has agreed to cover the disposition of the shares of
Common Stock issued or to be issued pursuant to the MSOAS Exchange, the OSAS
Exchanges, and the Additional OSAS Exchanges (collectively "the Selling
Stockholder Shares") in the Registration Statement.

The following table sets forth the names and addresses of each of the
Selling Stockholders and the number of shares of Common Stock that may be
offered by each of the Selling Stockholders pursuant to this Prospectus.

<TABLE>
<CAPTION>
NAME AND ADDRESS OF SELLING STOCKHOLDER SHARES(1)
- -------------------------------------------------------------------------- --------------
<S> <C>

Franz Eder(2)............................................................. 7,600,000(3)
Pariserstr. 61
10719 Berlin, Germany

SPAX Holding AS........................................................... 547,500
Stranden 3A
0250 Oslo, Norway

Aasens Trykkerier AS...................................................... 87,600
Hausmannsgt 6
0186 Oslo,Norway

Arne Martinsen............................................................ 223,500
Snnaveien 94
1476 Rasta, Norway

Birger Holten............................................................. 78,900
Rognerudveien 33B
0681 Oslo, Norway

Jochen Schene(4).......................................................... 332,499
Ohlauer Weg 12
40627 Dusseldorf, Germany

Frank Samuels............................................................. 324,999
Konradinstr 20
47058 Duisburg, Germany

Jurgen Ternieden(5)....................................................... 332,499
Saturnweg 26
45478 Mulheim, Germany

Thyssen Stahlunion GmbH(6)................................................ 333,000
Hans Gunter S. str 1
40235 Dusseldorf, Germany
</TABLE>

39
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS OF SELLING STOCKHOLDER SHARES(1)
- -------------------------------------------------------------------------- --------------
<S> <C>
Thor Stang................................................................ 190,500
Ekebergveien 76
3080 Holmestrand, Norway

Norsk SMB Invest 1........................................................ 339,000
Stranden 3A
0250 Oslo, Norway

Norsk SMB Invest 2........................................................ 498,000
Stranden 3A
0250 Oslo, Norway

Norsk SMB Invest 3........................................................ 186,660
Stranden 3A
0250 Oslo, Norway

Norsk SMB Invest 4........................................................ 119,700
Stranden 3A
0250 Oslo, Norway

Nordas Invest AS.......................................................... 250,200
Midttunlia 73
5050 Nestun, Norway

Inger Egeberg Sogstad..................................................... 18,000
Fjordallen 14
0250 Oslo, Norway

Erik Staumo............................................................... 56,580
Fjordallen 14
0250 Oslo, Norway

Knut Rygh................................................................. 70,140
Nordhellinga 7
1313 Vyenenga, Norway

Georg Tidemann Andersen................................................... 10,140
Bjrnstjeme B 21
3000 Drammen, Norway

Arvid Kolle............................................................... 38,700
Tulipanveien 20
4300 Sandnes, Norway

AS Ineta.................................................................. 1,500
Postboks 2406 Solli
0201 Oslo, Norway

Concordia Capo AS......................................................... 4,500
Postboks 21
5501 Haugesund, Norway

Concordia Foss AS......................................................... 4,500
Postboks 21
5501 Haugesund, Norway

Concordia Star AS......................................................... 4,500
Postboks 21
5501 Haugesund, Norway
</TABLE>

40
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS OF SELLING STOCKHOLDER SHARES(1)
- -------------------------------------------------------------------------- --------------
<S> <C>
Einar Myklebust........................................................... 65,100
Fyrgangen 17
1560 Larkollen, Norway

Erik Kristen-Johanssen.................................................... 14,700
Postboks 2406 Solli
0201 Oslo, Norway

Gunnar Greibokk........................................................... 34,500
4660 Evje, Norway

Gunnar Jrgensen........................................................... 22,500
Solveien 4
1177 Oslo,Norway

Hannestad Mek AS.......................................................... 6,000
Kanalveien 4
3110 Tnsberg, Norway

Jan Krohn-Hansen.......................................................... 53,310
Nordasneset 63
5046 Radal, Norway

Jens Holtung.............................................................. 90,000
Blakollveien 18
3175 Ramnes, Norway

Johnco AS................................................................. 30,000
Postboks 229
5501 Haugesund, Norway

Johs Owren................................................................ 40,140
Tllfsrud gard
2600 Lillehammer, Norway

Jon Fosse................................................................. 11,250
Smebyveien 2
2300 Hamar, Norway

Karlander Invest AS....................................................... 36,000
Postboks 1785 Vika
0122 Oslo, Norway

Maria Hareide............................................................. 26,700
Dicksvei 13
1324 Lysaker, Norway

Nistad Finans og Eiendom AS............................................... 207,150
Midttunlia 73
5051 Oslo, Norway

Ole-Johan Olsen........................................................... 42,300
Fynveien 24
3132 Husysund, Norway

Rolf Ness................................................................. 41,790
Milje
5593 Skanevik, Norway
</TABLE>

41
<PAGE>

<TABLE>
<CAPTION>
NAME AND ADDRESS OF SELLING STOCKHOLDER SHARES(1)
- -------------------------------------------------------------------------- --------------
<S> <C>
Sigfred Lyngy............................................................. 96,150
Stortingsgaten 28
0161 Oslo, Norway

Terje Rsj................................................................. 22,500
Van der Weld weg 5
5040 Paradis, Norway

Trade Invest AS........................................................... 30,000
Postboks 214
1415 Oppegard, Norway

Zaco AS................................................................... 14,400
Postboks 563
4801 Arendal, Norway

Per Bull Haugsen(7)....................................................... 332,499(8)
Gyldenlvesgt. 12
0260 Oslo, Norway

G. Foss Beheer b.v.(9).................................................... 697,503(8)
Mezenpelin 11
2566 ZS Den Haag
The Netherlands
</TABLE>

- ------------------------

(1) The number of shares of Common Stock listed indicates both the number of
shares owned by the Selling Stockholder prior to the Offering (assuming the
consummation of the Additional OSAS Exchanges) and the number of shares that
may be offered for the Selling Stockholder's account.

(2) Franz Eder is the President and Chairman of the Board of the Company and a
director of MSOAS.

(3) Such shares are being held by a trustee pursuant to the terms of a pooling
trust agreement. Such shares may not be disposed of by Mr. Eder until they
are released to him by the trustee. Mr. Eder shall receive ten percent of
such shares on July 1, 1999, an additional thirty percent of such shares on
July 1, 2000, an additional thirty percent of such shares on July 1, 2001,
and the balance of such shares on July 1, 2002. The trustee shall seek
instructions from Mr. Eder before taking any action as a stockholder with
respect to any of the shares held in trust.

(4) Jochen Schene is a member of the Board of Directors of OSAS.

(5) Jurgen Ternieden is a director of the Company, Chairman of the Board of
OSAS, and an officer and the head of the Pipes, Offshore, Special Products
Department of Thyssen Stahlunion GmbH.

(6) MSOAS has formed a strategic alliance with Thyssen Stahlunion GmbH with
respect to the marketing of the Company's proposed services.

(7) Per Bull Haugsen is an officer of OSAS and one of the developers of the
Offshore Shuttle concept.

(8) Represents shares to be issued in the Additional OSAS Exchanges.

(9) G. Foss Beheer b.v. is a Dutch corporation that is owned and operated by
Gunnar Foss, a director of OSAS and one the developers of the Offshore
Shuttle concept.

The Selling Stockholders are entitled to receive all of the proceeds from
the future sale of their Selling Stockholder Shares.

The Selling Stockholders, from time to time, depending on market conditions
and other factors, may offer and/or sell their Selling Stockholder Shares in the
over-the-counter market, or otherwise, at prices and terms then prevailing or at
prices related to the then-current market price, or in negotiated

42
<PAGE>
transactions. Their Selling Stockholder Shares may be sold by one or more
methods including, without limitation, (i) block trades in which a broker or
dealer so engaged will attempt to sell the Selling Stockholder Shares as agent
but may position and resell a portion of the block as principal to facilitate
the transaction; (ii) purchases by a broker or dealer as principal and resale by
such broker or dealer for its account pursuant to this Prospectus; (iii)
ordinary brokerage transactions and transactions in which the broker solicits
purchases; and (iv) face to face transactions between sellers and purchasers
without a broker or dealer. In effecting sales, brokers or dealers engaged by
the Selling Stockholders may arrange for other brokers or dealers to
participate. Such brokers or dealers may receive commissions or discounts from
the Selling Stockholders in amounts to be negotiated. Such brokers, dealers and
any other participating brokers or dealers may be deemed to be "underwriters"
within the meaning of the Securities Act, in connection with such sales.

The Company will bear all costs and expenses of the registration of the
Selling Stockholder Shares under the Securities Act and certain state securities
laws, other than fees of counsel for the Selling Stockholders and any discounts
or commissions payable with respect to sales of the Selling Stockholder Shares.

Sales of the Selling Stockholder Shares by the Selling Stockholders may have
an adverse effect on the market price of the Common Stock. Moreover, the Selling
Stockholders are not restricted as to the number of Selling Stockholder Shares
that may be sold at any one time, and it is possible that a significant number
of Selling Stockholder Shares could be sold at the same time, which also may
have an adverse effect on the market price of the Common Stock.

43
<PAGE>
CERTAIN TRANSACTIONS

On April 14, 1998, the Company issued 7,600,000 shares of Common Stock to
Franz Eder, the President and the Chairman of the Board of the Company, in
exchange for the 999,000 shares of MSOAS capital stock (constituting all of
MSOAS's issued and outstanding capital stock) held by Mr. Eder. The stock
certificate evidencing the shares of Common Stock that were issued to Mr. Eder
is being held by a trustee pursuant to the terms of a pooling trust agreement.
Such shares may not be disposed of by Mr. Eder until they are released to him by
the trustee. Mr. Eder shall receive ten percent of such shares on July 1, 1999,
an additional thirty percent of such shares on July 1, 2000, an additional
thirty percent of such shares on July 1, 2001, and the balance of such shares on
July 1, 2002. The trustee shall seek instructions from Mr. Eder before taking
any action as a stockholder with respect any of the shares held in trust. The
disposition of Mr. Eder's shares is covered by the Registration Statement.

In May, 1998, the Company acquired 3,291,738 shares of OSAS (approximately
68% of the outstanding OSAS capital stock) in exchange for 4,937,607 shares of
Common Stock. All of such shares are being held in escrow subject to completion
of the Offering. In connection therewith, the 221,666 OSAS shares held by Jurgen
Ternieden, a director of the Company, were exchanged for 332,499 shares of
Common Stock. The disposition of Mr. Ternieden's shares of Common Stock is
covered by the Registration Statement.

The Company entered into a loan agreement (the "Loan Agreement"), dated as
of March 12, 1998, amended as of August 27, 1998 and as of September 24, 1998,
with ValorInvest Ltd., an investment bank based in Geneva, Switzerland
("ValorInvest"), pursuant to which ValorInvest agreed to lend an aggregate of up
to $3,500,000 to the Company at such times as the Company shall request;
provided, however, advances shall be made in increments of $250,000 and shall
not exceed $500,000 in any single month. Pursuant to the Loan Agreement, the
Company issued three non-negotiable promissory notes to ValorInvest in the
aggregate principal amount of $3,500,000 (the "Bridge Notes"). Any monies
advanced to the Company under the Bridge Notes shall bear interest at the rate
of 7.5% per annum, and shall be due and payable upon the earlier of December 31,
1998 or the completion of a public offering for gross proceeds of at least
$100,000,000. As of June 30, 1998, an aggregate of $1,250,000 had been advanced
to the Company under the Bridge Notes.

The Company currently leases its office space in the United States from
Intercap Resource Management U.S., Inc. ("Intercap U.S."), a wholly-owned
subsidiary of Intercap Resource Management Corp. ("Intercap"). Intercap is an
oil and gas exploration, development, and production company traded on the
Vancouver Stock Exchange. Jim Ford, the former President and a former director
of the Company, is the President and a director of Intercap and Intercap U.S.;
George Wilfred Norman Wareham, the Treasurer, Chief Financial Officer, and
Secretary of the Company, is the Secretary, Treasurer, and a director of
Intercap and the Treasurer, a Vice President, and a director of Intercap U.S.;
and Shafiq Nazerali, a former consultant to the Company, is a former director of
Intercap. The Company believes that the lease terms are at least as favorable to
the Company as would be obtained from an unaffiliated, independent third party.

In 1997, Berliner Freiverkehr (Aktien) AG (a 40% stockholder of the
Underwriter ("BFAG")), as well as BEG Berliner Effektenbeteiligungsgesellschaft
AG (a 40%-owned subsidiary of BFAG ("BEG")), an officer/principal stockholder of
the BFAG, and various parties related to such officer/principal stockholder
acquired an aggregate of 4,750,000 shares of Common Stock from a founder of the
Company for an aggregate purchase price of $104,500. At the time of such
acquisition, there was no public market for the Common Stock. The 3,150,000
shares of Common Stock held by such officer/principal stockholder and the
various parties related to such officer/principal stockholder subsequently were
sold to, and are now owned by, BEG. The 3,950,000 shares of Common Stock
currently owned by BEG, as well as the 800,000 shares of Common Stock owned by
BFAG, are being held by a pooling trustee pursuant to the terms of a pooling
trust agreement and will not be released until August 3, 2001. During such time,
the trustee shall seek

44
<PAGE>

instructions from BEG and BFAG, respectively, before taking any action as a
stockholder with respect to any such shares. See "Principal Stockholders."

Effective as of February 1, 1998, the Company entered into a six-month
consulting agreement with each of Iqbal Akram and Wareham Management Ltd., a
Canadian corporation which is owned and operated by George Wilfred Norman
Wareham. The respective agreements provided for Mr. Akram to receive $5,000 per
month and Wareham Management Ltd. to receive $2,500 per month. On February 19,
1998, Mr. Akram was appointed Vice President of the Company and his consulting
agreement was terminated. On April 14, 1998, the Company entered into a two-year
employment agreement with Mr. Akram (the "Akram Agreement") pursuant to which
Mr. Akram shall devote at least 50% of his professional and business time to the
Company as Vice President and shall receive a salary of $60,000 per annum. On
the same day, the consulting agreement with Wareham Management Ltd. was
terminated. In lieu thereof, the Company entered into a two-year loan out
agreement with Wareham Management Ltd. (the "Wareham Agreement") for the
services of Mr. Wareham. Pursuant to the Wareham Agreement, Wareham Management
Ltd. shall loan out the services of Mr. Wareham to serve the Company as Chief
Financial Officer, Treasurer, and Secretary. In consideration thereof, Wareham
Management Ltd. shall receive an annual fee of $32,100. See "Certain
Transactions."

As of June 30, 1998, the Company had paid approximately $21,500 to Schuller
for marketing research and other services rendered. The Company believes that
such services were rendered on terms at least as favorable to the Company as
would be obtained from an unaffiliated, independent third party. In addition,
MSOAS has entered into an agreement with Schuller with respect to waste
management, onshore dismantling, and oil pollution prevention and cleanup. As of
the date hereof, no monies have been paid to Schuller under such agreement.
Franz Eder and Dr. Hubert Besner are shareholders and members of the Supervisory
Board of Schuller.

MSOAS has entered into an agreement with TSU with respect to the marketing
of its proposed services. As of June 30, 1998, approximately $52,500 had been
paid to TSU under such agreement. Jurgen Ternieden, a director of the Company,
is an officer and the head of the Pipes, Offshore, Special Products Department
of TSU. The Company believes that such services were rendered on terms at least
as favorable to the Company as would be obtained from an unaffiliated,
independent third party.

As of June 30, 1998, MSOAS had paid approximately $76,000 to the law firm of
Besner Kreifels Weber for legal services rendered. Dr. Hubert Besner, a director
of the Company, is a member of Besner Kreifels Weber. The Company believes that
such services were rendered on terms at least as favorable to the Company as
would be obtained from an unaffiliated, independent third party.

MSOAS has entered into an agreement with RC with respect to its engineering
and operational activities. As of June 30, 1998, approximately $74,000 had been
paid to RC under such agreement. Sverre Hanssen, the Chief Executive Officer of
RC, is a Chairman of the Board of Directors of MSOAS. The Company believes that
such services were rendered on terms at least as favorable to the Company as
would be obtained from an unaffiliated, independent third party.

45
<PAGE>
DESCRIPTION OF SECURITIES

The authorized capital stock of the Company consists of 75,000,000 shares of
common stock, par value $0.001 per share (the "Common Stock").

COMMON STOCK

Each holder of Common Stock is entitled to one vote for each share held on
all matters properly submitted to the stockholders for their vote. Holders of
shares of outstanding Common Stock are entitled to those dividends declared by
the Board of Directors out of legally available funds. Holders of shares of
outstanding Common Stock have no preemptive, conversion, or redemption rights.
All of the issued and outstanding shares of Common Stock are duly authorized,
validly issued, fully paid and nonassessable.

STATUTORY BUSINESS COMBINATION PROVISIONS

The Business Combination Act further provides that a Nevada corporation may
not engage in such a business combination after the expiration of three years
from the date that such person became an interested stockholder, unless the
business combination is approved by the board of directors of the corporation
before the person became an interested stockholder or by the affirmative vote of
a majority of outstanding votes not beneficially owned by the interested
stockholder at a meeting called not earlier than three years after the
interested stockholder's date of acquiring shares.

Under the Business Combination Act, an "interested stockholder" is defined
as any person that is (i) the owner of 10% or more of the outstanding voting
stock of the corporation or (ii) an affiliate or associate of the corporation
and was the owner of 10% or more of the outstanding voting stock of the
corporation at any time within the three year period immediately prior to the
date on which it is sought to be determined whether such person is an interested
stockholder.

At its option, a corporation may exclude itself from the coverage of the
Business Combination Act by amending its Articles of Incorporation by action of
its stockholders, other than interested stockholders and their affiliates and
associates, to exempt itself from coverage, provided that such charter amendment
may not become effective until 18 months after the date it is adopted and does
not apply to any combination of the corporation with an interested stockholder
whose date of acquiring shares is on or before the effective date of the
amendment. The Company has not adopted such an amendment to its Articles of
Incorporation.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is Continental Stock
Transfer & Trust Company, 2 Broadway, 19th floor, New York, New York 10004

BOOK-ENTRY-ONLY ISSUANCE OF COMMON STOCK TRADING ON GERMAN STOCK EXCHANGES

In general, the shares of Common Stock offered hereby will trade on the
Bulletin Boards of the Berlin Stock Exchange, the Hamburg Stock Exchange, the
Dusseldorf Stock Exchange, the Munich Stock Exchange, and, when approved for
listing, the Frankfurt Stock Exchange (each, a "German Exchange") only through
transfers of beneficial interests therein held through Deutsche Borse Clearing
AG ("DBC").

46
<PAGE>

Any investor who has an actual certificate representing shares of Common Stock,
rather than a beneficial interest, and who desires to sell such shares of Common
Stock on a German Exchange will be required to deposit such shares with The
Depository Trust Company ("DTC") for credit to DBC's account as described below,
and receive a beneficial interest therein that is reflected on DBC's books and
records. Certificates representing shares of Common Stock held through DBC will
not be issued unless such shares are withdrawn from DBC, in which case the
shares will not be eligible to trade on a German Exchange unless redeposited as
described above. DBC will not hold actual shares of Common Stock, but will hold
beneficial interests therein through its account with DTC. DTC, or its nominee,
will be the registered owner of all shares of Common Stock that are held by
investors through DBC.

Investors who are beneficial owners of Common Stock held through DBC will
receive confirmations and statements of their holdings only from DBC (through
their brokers or other financial institutions that are DBC participants). DBC
will register all transfers of such Common Stock between DBC participants on its
books and records through its book-entry system. Shares of Common Stock held by
DTC will be registered in the name of DTC's nominee, Cede & Co. DTC will not
know the beneficial owners of the shares of Common Stock that are held through
DBC because DTC's records will reflect only that such shares are credited to
DBC's account. Similarly, DBC will not know the beneficial owners of the shares
of Common Stock that are held through DBC because DBC's records will reflect
only the DBC participants' accounts to which such shares are credited.

Any communications by DTC to DBC and by DBC to DTC, the DBC participants,
and the beneficial owners will be governed by arrangements between DTC and DBC
and by the general rules and practices of DTC and DBC, subject to any statutory
or regulatory requirements that may be in effect from time to time.

Any dividend or other payments on Common Stock held through DBC will be made
by the Company to Cede & Co., as nominee of DTC. DTC, upon receipt of such
payments, will credit DBC's account at DTC for the amount of such payments.
Payments by DBC to the beneficial owners of Common Stock will be governed by
standing instructions and DBC's customary practices, subject to any statutory or
regulatory requirements as may be in effect from time to time. The dividends
will be converted into Deutsche marks, if requested, and distributed by DBC.

47
<PAGE>

TAXATION

CERTAIN TAX CONSEQUENCES UNDER GERMAN LAWS

The following discussion is a summary of the material anticipated tax
consequences of an investment in the Common Stock under German tax laws. The
discussion does not deal with all possible tax consequences relating to an
investment in the Common Stock. In particular, the discussion does not address
the tax consequences under state, local, and other (e.g. non-German) tax laws,
nor does it address special circumstances that may apply to any individual
investor. Accordingly, each prospective investor should consult its tax advisor
regarding the tax consequences to it of an investment in the Common Stock. The
following discussion is based upon the analysis of the German tax code, the
rules and regulations thereunder, current case law, and published rulings, for
German purposes.

The anticipated tax consequences are subject to change, and such change may
be retroactively effective. If so, the following summary may be affected and may
not be relied upon. Further, any variation or differences from the facts or
representations recited herein, for any reason, might affect the following
discussion, perhaps in an adverse manner, and make them inapplicable. In
addition, the Company has undertaken no obligation to update this discussion for
changes in facts or laws occurring subsequent to the date hereof.

The summary represents solely the Company's interpretation of existing law
and, accordingly, no assurances can be given that the tax authorities or courts
in Germany will agree with the summary hereunder.

TAXATION OF DIVIDENDS. Dividends on the Common Stock that are (i) paid to
holders who are German residents (for tax purposes, the term "resident" includes
a natural person having a residence or his or her habitual abode in Germany) or
who are corporations that maintain their statutory seat or principle place of
management in Germany (a "German Holder"), or (ii) attributable to a permanent
establishment maintained by, or a fixed base regularly available to a holder
otherwise not deemed to be a German resident (a "Foreign Holder"), is subject to
German income taxes or corporate income taxes, respectively, at regular German
tax rates. Such dividend payments also are subject to a surcharge equal to 5.5%
of the otherwise applicable German income or corporate income tax liability.

German Holders who are natural persons may claim a tax allowance for income
derived from capital investments of DM6,000 (or DM12,000 in the case of married
couples filing joint returns).

German Holders who are natural persons may deduct from the dividend income
the expenses associated with the acquisition, safe-guarding, or maintaining of
the Common Stock (the "Werbungskosten"), including fees for the custodian and
re-financing costs. Without supporting documents, Werbungskosten in the amount
of DM100 per annum (DM200 in the case of married couples filing joint returns)
are deductible for tax purposes from such dividend income.

According to the double taxation treaty between the United States and
Germany, a withholding tax of 5% of the gross amount of the dividends is imposed
if the beneficial owner is a company that holds directly at least 10% of the
voting shares of the company paying dividends. In all other cases, a withholding
tax of 15% of the gross amount of the dividends can be imposed. The withholding
tax can be credited against the part of the German income tax which is
attributable to such dividend income. If, however, the German income tax
attributable to such dividends is lower than the withholding tax because of a
deduction of Werbungskosten (including but not limited to refinancing costs)
from such dividends, withholding taxes can only be credited against German
income taxes up to an amount of German income tax attributable to such dividend
income. Instead of a credit of the withholding tax, the German Holder can apply
for a deduction of the withholding tax from his taxable income.

48
<PAGE>

Dividend income is tax-exempt if a German Holder that is a corporation owns
at least 10% of the voting share capital. If, however, the tax-exempt dividend
derived by a corporate German Holder is distributed to a German Holder who is a
natural person, the distribution is taxable.

CAPITAL GAINS. Capital gains from the sale of the Common Stock are not
subject to taxes in Germany, unless (i) in the case of a Foreign Holder, the
gains are attributable to a permanent establishment maintained by, or a fixed
base regularly available to such holder in Germany, (ii) in the case of a German
Holder, such holder is a corporate entity that is a German resident, or the
Common Stock was held by the holder as a business asset, (iii) the holder is a
German Holder who is a natural person that holds or has held at any time during
a period of five years before the disposal directly or indirectly more than 25%
of the share capital in his private property, or (iv) a speculative capital gain
(i.e. if the time period between the acquisition and the disposal of the Common
Stock do not exceed six months and the Common Stock do not qualify as a business
asset) is given by a German Holder who is a natural person who holds the Common
Stock.

INHERITANCE AND GIFT TAX. Under German law, a German gift or inheritance
tax will be imposed on transfers of Common Stock by gift or at death if the
donor or transferor or the heir, donee, or other beneficiaries are German
residents within the meaning of Section 2 of the German Inheritance Tax Act.

OTHER GERMAN TAXES. There are no German transfer, stamp, or other similar
taxes which would apply on the sale or transfer of shares of Common Stock.

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO NON-UNITED STATES
HOLDERS

The following is a general discussion of the principal United States federal
income and estate tax consequences of the ownership and disposition of Common
Stock by a non-U.S. holder. As used herein, the term "non-U.S. holder" is
defined as any person or entity that is, for United States federal income tax
purposes, a foreign corporation, a non-resident alien individual, a foreign
partnership, or a non-resident fiduciary of a foreign estate or trust. This
discussion is based on currently existing provisions of the Internal Revenue
Code of 1986, as amended (the "Code"), existing, temporary, and proposed
treasury regulations promulgated thereunder, and administrative and judicial
interpretations thereof, all as in effect or proposed on the date hereof and all
of which are subject to change, possibly with retroactive effect, or different
interpretations. This discussion is limited to non-U.S. holders who hold shares
of Common Stock as capital assets within the meaning of Section 1221 of the
Code. Moreover, this discussion is for general information only and does not
address all of the tax consequences that may be relevant to particular non-U.S.
holders in light of their personal circumstances, nor does it discuss certain
tax provisions which may apply to individuals who relinquish their U.S.
citizenship or residence.

An individual may, subject to certain exemptions, be deemed to be a resident
alien (as opposed to a non-resident alien) by virtue of being present in the
United States for at least 31 days in the calendar year and for an aggregate of
at least 183 days during a three-year period ending in the current calendar year
(counting, for such purposes, all of the days present in the current year,
one-third of the days present in the immediately proceeding year, and one-sixth
of the days present in the second preceding year). Resident aliens are subject
to U.S. federal income taxes if they were U.S. citizens.

Each prospective purchaser of Common Stock is advised to consult with a tax
advisor with respect to current and possible future tax consequences of
acquiring, holding, and disposing of Common Stock, as well as any tax
consequences that may arise under the laws of any U.S. state, municipality, or
other taxing jurisdiction.

DIVIDENDS. If dividends are paid on shares of Common Stock to a non-U.S.
holder, they will be subject to withholding of United States federal income
taxes at a 30% rate or such lower rate as may be specified by an applicable
income tax treaty. However, if (a) dividends are effectively connected with the
conduct of a trade or business by the non-U.S. holder within the United States
and, where a tax treaty

49
<PAGE>

applies, are attributable to a United States permanent establishment of the
non-U.S. holder, and (b) an Internal Revenue Service ("IRS") form 4224 or
successor form is filed with the payor, then the dividends are not subject to
withholding tax, but instead are subject to United States federal income taxes
on a net basis at the applicable graduated individual or corporate rate. Any
such effectively connected dividends received by a foreign corporation may,
under certain circumstances, be subject to an additional "branch profits tax" at
a rate of 30% or such lower rate as may be specified by an applicable income tax
treaty.

Dividends paid to an address outside the United States are presumed to be
paid to a resident of such country (unless the payor has knowledge to the
contrary) for purposes of the withholding discussed above and for purposes of
determining the applicability of the tax treaty rate. However, recently
finalized treasury regulations pertaining to United States federal withholding
tax, generally effective for the first payments made after December 31, 1999
(the "Final Withholding Tax Regulations"), provide that a non-U.S. holder must
comply with certain certification procedures (or, in the case of payments made
outside the United States with respect to an offshore account, certain
documentary evidence procedures), directly or through an intermediary to obtain
the benefits of a reduced rate under an income tax treaty. In addition, the
Final Withholding Tax Regulations will require a non-U.S. holder who provides an
IRS form 4224 or successor form (as discussed above) also to provide its U.S.
taxpayer identification number.

A non-U.S. holder of Common Stock eligible for a reduced rate of United
States withholding taxes pursuant to an income tax treaty may obtain a refund of
any excess amount withheld by filing an appropriate claim for refund with the
IRS.

GAIN AND DISPOSITION OF COMMON STOCK. A non-U.S. holder generally will not
be subject to United States federal income taxes with respect to any gain
recognized on the sale or other disposition of Common Stock unless (a) the gain
is effectively connected with a trade or business of the non-U.S. holder in the
United States and, where a tax treaty applies, is attributable to a United
States permanent establishment of the non-U.S. holder, (b) in the case of a
non-U.S. holder who is an individual and holds a Common Stock as a capital
asset, such holder is present in United States for 183 or more days in the
taxable year of the sale or other disposition and certain other conditions are
met, or (c) the Company is or has been a "U.S. Real Property Holding
Corporation" (a "USRPHC") for United States federal income tax purposes, as
discussed below.

An individual non-U.S. holder who falls within clause (a) above will, unless
an applicable treaty provides otherwise, be taxed on his or her net gain derived
from the sale under regular graduated United States federal income tax rates. An
individual non-U.S. holder who falls under clause (b) above will be subject to a
flat 30% tax on the gain derived from the sale which may be offset by certain
United States capital losses.

A non-U.S. holder that is a foreign corporation falling under clause (a)
above will be taxed on its gain under regular graduated United States federal
income tax rates and may be subject to an additional branch profits tax equal to
30% of its effectively connected earnings and profits within the meaning of the
Code for the taxable year, as adjusted for certain items, unless it qualifies
for a lower rate under an applicable income tax treaty.

A corporation is a USRPHC if the fair market value of the U.S. real property
interests held by the corporation is 50% or more of the aggregate fair market
value of its U.S. and foreign real property interests and any other assets used
or held for use by the corporation in a trade or business. Based on its current
and anticipated assets, the Company believes it currently is not, and it is not
likely to become, a USRPHC. However, since the determination of USRPHC status is
based upon the composition of the assets of the Company from time to time, and
because there are uncertainties in the application of certain relevant rules,
there can be no assurance that the Company will not become a USRPHC. If the
Company were to become a USRPHC, then gains on the sale or other disposition of
Common Stock by a non-U.S. holder generally would be subject to U.S. federal
income taxes unless both (a) the Common Stock was "regularly traded" on an
established securities market within the meaning of the applicable treasury

50
<PAGE>

regulations, and (b) the non-U.S. holder actually or constructively owned 5% or
less of the Common Stock. Non-U.S. holders should consult their tax advisors
concerning any U.S. tax consequences that may arise if the Company were to
become a USRPHC.

FEDERAL ESTATE TAX. Common Stock held by an individual non-U.S. holder at
the time of death will be included in such holder's gross estate for United
States federal and state tax purposes, unless an applicable estate tax treaty
provides otherwise.

INFORMATION REPORTING AND BACK UP WITHHOLDING TAX. Under treasury
regulations, the Company must report annually to the IRS and to each non-U.S.
holder the amount of dividends paid to such holder and the tax withheld with
respect to such dividends, regardless of whether withholding was required.
Copies of the information returns reporting such dividends and withholding also
may be made available to the tax authorities in the country in which the
non-U.S. holder resides under the provisions of an applicable income tax treaty.

A back-up withholding tax is imposed at the rate of 31% on certain payments
to persons that fail to furnish certain identifying information to the payor.
Back-up withholding generally will not apply to dividends paid to a non-U.S.
holder at an address outside the United States (unless the payor has knowledge
that the payee is a U.S. person). However, in the case of dividends paid after
December 31, 1999, the Final Withholding Tax Regulations provide that a non-U.S.
holder generally will be subject to withholding tax at a 31% rate unless certain
certification procedures (or, in the case of payments made outside the United
States with respect to an offshore account, certain documentary evidence
procedures) are complied with, directly or through an intermediary. Back-up
withholding and information reporting generally will also apply to dividends
paid on Common Stock at addresses inside the United States to non-U.S. holders
that fail to provide certain identifying information in the manner required. The
Final Withholding Tax Regulations provide certain presumptions under which a
non-U.S. holder would be subject to back-up withholding and information
reporting unless the Company receives certification from the holder of its
non-U.S. status.

Payment of the proceeds of the sale of Common Stock by or through a United
States office of a broker is subject to both back-up withholding and information
reporting unless the beneficial owner provides the payor with its name and
address and certifies under penalties of perjury that it is a non-U.S. holder,
or otherwise establishes an exemption. In general, back-up withholding and
information reporting will not apply to a payment of the proceeds of a sale of
Common Stock by or through a foreign office of a broker. If however, such broker
is, for United States federal income tax purposes, a U.S. person, a controlled
foreign corporation, or a foreign person that derives 50% or more of its gross
income for certain periods from the conduct of a trade or business in the United
States (or, for periods after December 31 1999, a foreign partnership that at
any time during its fiscal year either (a) is engaged in the conduct of a trade
or business in the United States, or (b) has as partners one or more U.S.
persons that, in the aggregate, hold more than 50% of the income or capital
interest in the partnership), such payments will be subject to information
reporting, but not back-up withholding, unless (aa) such broker has documentary
evidence in its records that the beneficial owner is a non-U.S. holder and
certain other conditions are met, or, (bb) the beneficial owner otherwise
establishes an exemption.

A holder generally will be allowed a refund or a credit against such
holder's U.S. federal income tax liability for any amounts withheld under the
back-up withholding rules, provided the required information is furnished in a
timely manner to the IRS.

51
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE

If the Registration Statement is not in effect at the time such shares are
released to Mr. Eder, such shares may not be resold in a public distribution
except in compliance with the registration requirements of the Securities Act or
pursuant to a valid exemption from registration, including the safe harbor
provided by Rule 144. In general, under Rule 144 as currently in effect, a
person (or persons whose shares are aggregated) who has beneficially owned
restricted shares for at least one year (including the holding period of any
prior owner except an affiliate) would be entitled to sell within any
three-month period a number of shares that does not exceed the greater of (i)
one percent of the number of shares of Common Stock then outstanding
(approximately 535,876 shares immediately after the Offering), or (ii) the
average weekly trading volume of the Common Stock during the four calendar weeks
preceding the filing of a Form 144 with respect to such sale. Sales under Rule
144 are also subject to certain manner of sale provisions and notice
requirements and to the availability of current public information about the
Company. Under Rule 144(k), a person who is not deemed to have been an affiliate
of the Company at any time during the 90 days preceding a sale, and who has
beneficially owned the shares proposed to be sold for at least two years
(including the holding period of any prior owner except an affiliate), is
entitled to sell such shares without complying with the manner of sale, public
information, volume limitation or notice provisions of Rule 144.

52
<PAGE>
UNDERWRITING

The Company has entered into an underwriting agreement (the "Underwriting
Agreement") with Berliner Effektenbank AG (the "Underwriter") pursuant to which
it will serve as the underwriter in connection with the Offering. In accordance
with the Underwriting Agreement, the Company has retained the Underwriter to
conduct, as its exclusive agent, an offering of 20,000,000 shares of Common
Stock on a "best efforts, all or none" basis, for a period (the "Offering
Period") of 30 days from the effective date of the Registration Statement. The
Offering Period may be extended for an additional 30 days by the mutual
agreement of the Company and the Underwriter, and an additional five days may be
added to the Offering Period solely for purposes of allowing checks to clear.
All funds received by the Underwriter will be deposited no later than noon on
the next business day following their receipt by the Underwriter in a separate
account, to be held by the Underwriter as agent for the subscribers of the
Shares. Payments shall be made either by check or by wire transfer. All checks
for subscriptions of the shares of Common Stock should be made payable to
"Berliner Effektenbank AG."

If, during the Offering Period, subscriptions are received for all of the
Shares, then the Company and the Underwriter may have a closing to accept such
subscriptions. At the closing, all funds received, less the Underwriter's
commissions, will be delivered to the Company and certificates representing the
Shares purchased promptly will be delivered to or for the account of the
subscribers thereof. If no closing takes place during the Offering Period, then
all funds promptly will be returned to the subscribers thereof without any
deduction therefrom or interest thereon. Until such time as funds have been
released from the separate account and the Shares have been delivered to or for
the account of the subscribers therefor, such subscribers will not be deemed to
be holders of the Shares.

The Underwriter has advised the Company that it proposes to offer the Shares
to the public at the public offering price set forth on the cover page of this
Prospectus and to certain dealers at such prices less concessions not in excess
of $ per Share. Such dealers may reallow a concession not in excess of
$ per Share to certain other dealers. After the commencement of the
Offering, the concession and reallowance may be changed by the Underwriter.

The Underwriter has informed the Company that it does not expect sales to
discretionary accounts by the Underwriter to exceed five percent (5%) of the
Shares offered hereby.

The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act.

The foregoing is a summary of the principal terms of the underwriting
agreement and does not purport to be complete. Reference is made to a copy of
such agreement which is filed as an exhibit to the Registration Statement. See
"Additional Information."

In 1997, Berliner Freiverkehr (Aktien) AG (a 40% stockholder of the
Underwriter ("BFAG")), as well as BEG Berliner Effektenbeteiligungsgellschaft AG
(a 40%-owned subsidiary of BFAG ("BEG")), an officer/principal stockholder of
BFAG, and various parties related to such officer/principal stockholder acquired
an aggregate of 4,750,000 shares of Common Stock from a founder of the Company
for an aggregate purchase price of $104,500. At the time of such acquisition,
there was no public market for the Common Stock. The 3,150,000 shares of Common
Stock held by such officer/principal stockholder and the various parties related
to such officer/principal stockholder subsequently were sold to, and are now
owned by, BEG. The 3,950,000 shares of Common Stock currently owned by BEG, as
well as the 800,000 shares of Common Stock owned by BFAG, are being held by a
pooling trustee pursuant to the terms of a pooling trust agreement and will not
be released until August 3, 2001. During such time, the trustee shall seek
instructions from BEG and BFAG, respectively, before taking any action as a
stockholder with respect to any of such shares. See "Principal Stockholders."

53
<PAGE>

received its banking license in Germany. The Underwriter is 40%-owned by
Berliner Freiverkehr (Aktien) AG, a publicly-held financial institution.

LEGAL MATTERS

The validity of the securities offered hereby will be passed upon for the
Company by Breslow & Walker, LLP, New York, New York.

EXPERTS

The Company's financial statements as of December 31, 1997 and for the
period from May 23, 1997 (inception) through December 31, 1997 appearing in this
Prospectus have been audited by Deloitte & Touche, Vancouver, British Columbia,
Canada, independent auditors, as set forth in their report thereon appearing
elsewhere herein, and are included herein in reliance upon the authority of such
firm as experts in accounting and auditing.

The financial statements of MSOAS as of December 31, 1997 and for the period
from December 10, 1997 (inception) through December 31, 1997, and the financial
statements of OSAS as of December 31, 1996 and 1997 and for the period from
November 29, 1996 (inception) through December 31, 1996 and for the one-year
period ended December 31, 1997 appearing in this Prospectus have been audited by
Deloitte & Touche, Oslo, Norway, independent auditors, as set forth in their
reports thereon appearing elsewhere herein, and are included herein in reliance
upon the authority of such firm as experts in accounting and auditing.

ADDITIONAL INFORMATION

The Company has filed with the Commission, 450 Fifth Street, N.W.,
Washington, D.C., a Registration Statement on Form S-1 under the Securities Act
of 1933, as amended, for the registration of the Offering. This Prospectus,
which is part of the Registration Statement, does not contain all of the
information contained in the Registration Statement. For further information
with respect to the Company and the shares of Common Stock offered hereby,
reference is made to the Registration Statement, including the exhibits thereto,
which may be inspected, without charge, at the office of the Securities and
Exchange Commission, or copies of which may be obtained from the Commission in
Washington, D.C., upon payment of the requisite fees, or from the Commission's
Website at http://www.sec.gov. Statements contained in this Prospectus as to the
intent of any contract or other document referred to are not necessarily
complete, and in each instance reference is made to the copy of such contract or
other document filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by such reference.

54
<PAGE>
MARINE SHUTTLE OPERATIONS, INC.

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Consolidated Financial Statements of Marine Shuttle Operations Inc.
Independent Auditor's Report............................................................................. F-2
Consolidated Balance Sheets as of December 31, 1997 and June 30, 1998 (unaudited)........................ F-3
Consolidated Statements of Loss for the period from May 23, 1997 (inception) through December 31, 1997
and for the six-month period ended June 30, 1998 (unaudited)........................................... F-4
Consolidated Statements of Cash Flows for the period from May 23, 1997 (inception) through December 31,
1997 and for the six-month period ended June 30, 1998 (unaudited)...................................... F-5
Consolidated Statements of Shareholders' Equity (Deficit) for the period from May 23, 1997 (inception)
through December 31, 1997 and for the six-month period ended June 30, 1998 (unaudited)................. F-6
Notes to Consolidated Financial Statements............................................................... F-7

Financial Statements of Marine Shuttle Operations AS
Independent Auditor's Report............................................................................. F-17
Balance Sheet as of December 31, 1997 and June 30, 1998 (unaudited)...................................... F-18
Statement of Loss for the period from December 10, 1997 (inception) through December 31, 1997 and for the
six-month period ended June 30, 1998 (unaudited)....................................................... F-19
Statement of Cash Flows for the period from December 10, 1997 (inception) through December 31, 1997 and
for the six-month period ended June 30, 1998 (unaudited)............................................... F-20
Statement of Shareholders' Equity for the period from December 10, 1997 (inception) through December 31,
1997 and for the six-month period ended June 30, 1998 (unaudited)...................................... F-21
Notes to Financial Statements............................................................................ F-22

Financial Statements of Offshore Shuttle AS
Independent Auditor's Report............................................................................. F-27
Balance Sheet as of December 31, 1997 and June 30, 1998 (unaudited)...................................... F-28
Statement of Loss for the period from November 29, 1996 (inception) through December 31, 1996, the
one-year period ended December 31, 1997, and the six-month period ended June 30, 1998 (unaudited)...... F-29
Statement of Cash Flows for the period from November 29, 1996 (inception) through December 31, 1996, the
one-year period ended December 31, 1997 and the six-month period ended June 30, 1998 (unaudited)....... F-30
Statement of Shareholders' Equity for the period from November 29, 1996 (inception) through December 31,
1996, the one-year period ended December 31, 1997 and the six-month period ended June 30, 1998
(unaudited)............................................................................................ F-31
Notes to Financial Statements............................................................................ F-32

Selected Unaudited Pro Forma Consolidated Financial Information
Explanatory Statement.................................................................................... F-40
Pro Forma Consolidated Balance Sheet..................................................................... F-41
Pro Forma Consolidated Statements of Loss
-Six months ended June 30, 1998...................................................................... F-42
-Period ended December 31, 1997...................................................................... F-43
Notes to the Pro Forma Consolidated Financial Information................................................ F-44
</TABLE>

F-1
<PAGE>
AUDITORS' REPORT

To the Shareholders of
Marine Shuttle Operations Inc.
(formerly Geoteck International, Inc.)
(A development stage company)

We have audited the consolidated balance sheet of Marine Shuttle Operations
Inc. (a development stage company) as at December 31, 1997 and the consolidated
statements of loss, shareholders' equity (deficit) and cash flows for the period
from the date of incorporation, May 23, 1997, to December 31, 1997. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in
all material respects, the financial position of the Company as at December 31,
1997 and the results of its operations and its cash flows for the period from
the date of incorporation, May 23, 1997, to December 31, 1997 in accordance with
accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company's negative working capital and deficit raises
substantial doubt about its ability to continue as a going concern. Management's
plans concerning this matter are also described in Note 1. The financial
statements do not contain any adjustments that might result from the outcome of
this uncertainty.

/s/ Deloitte & Touche

Chartered Accountants
Vancouver, British Columbia
October 13, 1998

F-2
<PAGE>

MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
(A DEVELOPMENT STAGE COMPANY)
(A NEVADA CORPORATION)

CONSOLIDATED BALANCE SHEETS

JUNE 30, 1998 AND DECEMBER 31, 1997

(U.S. DOLLARS)

<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
-------------- ------------
<S> <C> <C>
(UNAUDITED)
ASSETS

CURRENT
Cash............................................................................. $ 410,643 $ 9,015
-------------- ------------
Total current assets............................................................. 410,643 9,015

CAPITAL ASSETS (Note 5)............................................................ 221,103 --

GOODWILL AND OTHER INTANGIBLES, net of amortization
(Note 6)......................................................................... 22,696,272 --
-------------- ------------
TOTAL ASSETS....................................................................... $ 23,328,018 $ 9,015
-------------- ------------
-------------- ------------
LIABILITIES

CURRENT
Accounts payable................................................................. $ 370,616 $ 16,092
Note payable (Note 8)............................................................ 1,265,781 --
Due to a related company (Note 9)................................................ -- 3,854
-------------- ------------
Total current liabilities........................................................ 1,636,397 19,946
-------------- ------------
SHAREHOLDERS' EQUITY (DEFICIT)
Authorized
75,000,000 common shares with a par value of $0.001
Issued and outstanding
27,620,000 common shares with a par value of $0.001 at June 30, 1998 and
20,020,000 common shares at December 31, 1997................................ 27,620 20,020
Additional paid-in capital....................................................... 22,926,830 133,980
Cumulative foreign exchange adjustment........................................... (39,802) --
Accumulated deficit during the development stage................................. 1,222,577 (164,931)
-------------- ------------
Total shareholders' equity (deficit)............................................. 21,691,621 (10,931)
-------------- ------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY (DEFICIT)................................................... $ 23,328,018 $ 9,015
-------------- ------------
-------------- ------------
</TABLE>

CONTINUING OPERATIONS (Note 1)

F-3
<PAGE>

MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
(A DEVELOPMENT STAGE COMPANY)
(A NEVADA CORPORATION)

CONSOLIDATED STATEMENTS OF LOSS

(U.S. DOLLARS)

<TABLE>
<CAPTION>
CUMULATIVE
TO JUNE 30,
1998 FROM PERIOD FROM
DATE OF SIX MONTH MAY 23, 1997
INCEPTION, PERIOD ENDED TO
MAY 23, JUNE 30, DECEMBER 31,
1997 1998 1997
----------------- ------------- -------------
<S> <C> <C> <C>
(UNAUDITED) (UNAUDITED)
EXPENSES
Accounting and audit............................................ $ 77,262 $ 61,751 $ 15,511
Bank charges.................................................... 1,237 937 300
Consulting fees................................................. 155,096 125,096 30,000
Interest........................................................ 15,781 15,781 --
Legal........................................................... 126,463 99,546 26,917
Listing and filing fees......................................... 34,989 3,989 31,000
Goodwill amortization........................................... 418,268 418,268 --
Foreign exchange gain........................................... (6,659) (6,659) --
Office and printing............................................. 120,126 111,452 8,674
Management fees................................................. 40,000 -- 40,000
Salaries........................................................ 47,451 47,451 --
Telephone....................................................... 6,046 3,699 2,347
Transfer agent fees............................................. 10,713 8,695 2,018
Travel.......................................................... 93,011 84,847 8,164
Write-down of investment (Note 3)............................... 90,000 90,000 --
----------------- ------------- -------------
1,229,784 1,064,853 164,931
Less: interest income........................................... 7,207 7,207 --
----------------- ------------- -------------
NET LOSS FOR THE PERIOD......................................... $ (1,222,577) $ (1,057,646) $ (164,931)
----------------- ------------- -------------
----------------- ------------- -------------
Basic and diluted loss per share................................ $ (0.04) $ (0.01)
------------- -------------
------------- -------------
Weighted average shares Outstanding............................. 27,620,000 25,811,892
------------- -------------
------------- -------------
</TABLE>

F-4
<PAGE>

MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
(A DEVELOPMENT STAGE COMPANY)
(A NEVADA CORPORATION)

CONSOLIDATED STATEMENTS OF CASH FLOW

(U.S. DOLLARS)

<TABLE>
<CAPTION>
CUMULATIVE
TO JUNE 30,
1998 FROM PERIOD FROM
DATE OF SIX MONTH MAY 23, 1997
INCEPTION, PERIOD ENDED TO
MAY 23, JUNE 30, DECEMBER 31,
1997 1998 1997
---------------- ------------- ------------
<S> <C> <C> <C>
(UNAUDITED) (UNAUDITED)
OPERATING ACTIVITIES
Net loss for the period......................................... $ (1,222,577) $ (1,057,646) $ (164,931)
---------------- ------------- ------------
Adjustments to reconcile net loss to net cash provided by
operating activities
Goodwill amortization......................................... 418,268 418,268 --
Write-down of investment...................................... 90,000 90,000 --
---------------- ------------- ------------
Interest expense.............................................. 15,781 15,781 --
---------------- ------------- ------------
Changes in non-cash working capital
Accounts payable.............................................. 189,363 173,271 16,092
Due to related party.......................................... -- (3,854) 3,854
---------------- ------------- ------------
Net cash used in operating activities............................. (509,165) (364,180) (144,985)
---------------- ------------- ------------
FINANCING ACTIVITIES
Issuance of capital stock....................................... 170,000 -- 170,000
Share issue costs............................................... (16,000) -- (16,000)
Deferred share issue costs...................................... (299,936) (299,936) --
Note payable.................................................... 1,250,000 1,250,000 --
---------------- ------------- ------------
Net cash generated by financing activities........................ 1,104,064 950,064 154,000
---------------- ------------- ------------
INVESTING ACTIVITIES
Investment...................................................... (100,000) (100,000) --
Capital asset purchases......................................... (221,103) (221,103) --
Cumulative foreign exchange adjustment.......................... (39,802) (39,802) --
Proceeds on sale of investment.................................. 10,000 10,000 --
Advance to Marine Shuttle Operations AS......................... (249,986) (249,986) --
Acquisition of Marine Shuttle Operations AS..................... 416,635 416,635 --
---------------- ------------- ------------
Net cash used in investing activities............................. (184,256) (184,256) --
---------------- ------------- ------------
CHANGE IN CASH DURING THE PERIOD.................................. 410,643 401,628 9,015
CASH, BEGINNING OF PERIOD......................................... -- 9,015 --
---------------- ------------- ------------
CASH, END OF PERIOD............................................... $ 410,643 $ 410,643 $ 9,015
---------------- ------------- ------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS
Cash payment for interest....................................... $ -- $ -- $ --
---------------- ------------- ------------
Cash receipts for interest...................................... 7,207 7,207 --
---------------- ------------- ------------
</TABLE>

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

During the six month period ended June 30, 1998, the Company acquired all of
the issued and outstanding shares of Marine Shuttle Operations AS, ("MSO AS") .
Consideration consisted of 7,600,000 common shares of the Company (which has
been recorded at $22,800,000).

F-5
<PAGE>

MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
(A DEVELOPMENT STAGE COMPANY)
(A NEVADA CORPORATION)

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)

SIX MONTHS ENDED JUNE 30, 1998 AND FROM THE DATE OF INCORPORATION,
MAY 23, 1997, TO DECEMBER 31, 1997

(U.S. DOLLARS)

<TABLE>
<CAPTION>
CUMULATIVE TOTAL
COMMON SHARES FOREIGN EXCHANGE SHAREHOLDERS'
---------------------- PAID-IN ADJUSTMENT DURING ACCUMULATED EQUITY
SHARES AMOUNT CAPITAL DEVELOPMENT STAGE DEFICIT (DEFICIT)
--------- ----------- ---------- ----------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>

Issued on incorporation................ 10,000,000 $ 10,000 $ -- $ -- $ -- $ 10,000

Private placement...................... 10,020,000 10,020 133,980 -- -- 144,000

Net loss............................... -- -- -- -- (164,931) (164,931)
--------- ----------- ---------- -------- ------------ --------------

Balance at December 31, 1997........... 20,020,000 20,020 133,980 -- (164,931) (10,931)

Issued on acquisition of MSO AS........ 7,600,000 7,600 22,792,400 -- -- 22,800,000

Net loss............................... -- -- -- (39,802) (1,057,646) (1,097,448)
--------- ----------- ---------- -------- ------------ --------------

Balance at June 30, 1998 (Unaudited)... 27,620,000 $ 27,620 $22,926,380 $ (39,802) $(1,222,577) $ 21,691,621
--------- ----------- ---------- -------- ------------ --------------
--------- ----------- ---------- -------- ------------ --------------
</TABLE>

F-6
<PAGE>

MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
(A DEVELOPMENT STAGE COMPANY)
(A NEVADA CORPORATION)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 1998 AND DECEMBER 31, 1997

(INFORMATION AS AT JUNE 30, 1998
AND FOR THE SIX MONTH PERIOD THEN ENDED
IS UNAUDITED)
(U.S. DOLLARS)

1. CONTINUING OPERATIONS

Marine Shuttle Operations Inc. (the "Company") was incorporated under the
name Geoteck International, Inc. on May 23, 1997 in Nevada, U.S.A. The Company
changed its name to Marine Shuttle Operations Inc. on May 29, 1998.

The Company was organized with the intent to be a holding company which will
acquire and/or form joint ventures with corporate entities conducting various
types of businesses throughout the world.

The Company has negative working capital and a deficit. The ability of the
Company to continue as a going concern is dependent on the ability of the
Company to obtain additional financing. The Company plans, in conjunction with
the acquisitions outlined in Notes 4 and 7, to raise approximately $100,000,000,
net of commissions and costs of issue, through the issuance of 20,000,000 shares
of common stock pursuant to a Registration Statement on Form S-1.

2. SIGNIFICANT ACCOUNTING POLICIES

These financial statements have been prepared in accordance with generally
accepted accounting principles in the United States and reflect the following
significant accounting principles:

(A) PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiary, Marine Shuttle Operations AS (MSO AS).
Intercompany transactions and balances have been eliminated.

(B) ESTIMATES AND ASSUMPTIONS

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amount of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.

In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings Per Share (SFAS 128), which established new
standards for computing and presenting earnings per share effective for
fiscal years ending after December 15, 1997. With SFAS 128, primary
earnings per share is replaced by basic earnings per share, which is
computed by dividing income available to common shareholders by the
weighted average number of shares outstanding for the

F-7
<PAGE>

MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
(A DEVELOPMENT STAGE COMPANY)
(A NEVADA CORPORATION)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1998 AND DECEMBER 31, 1997

(INFORMATION AS AT JUNE 30, 1998
AND FOR THE SIX MONTH PERIOD THEN ENDED
IS UNAUDITED)
(U.S. DOLLARS)

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

period. In addition, SFAS 128 requires the presentation of diluted
earnings per share, which includes the potential dilution that could
occur if dilutive securities were exercised or converted into common
stock. The computation of diluted EPS does not assume the conversion or
exercise of securities if their effect is anti-dilutive. Common
equivalent shares consist of the common shares issuable upon the
conversion of the convertible loan notes and special warrants (using the
if-converted method) and incremental shares issuable upon the exercise of
stock options and share purchase warrants (using the treasury stock
method).

Pursuant to accounting practices prescribed by the United States
Securities and Exchange Commission, common shares issued by the Company
during the twelve month period immediately preceding the proposed filing
of an initial public offering have been included in the calculation of
loss per common share as if they were outstanding for all periods
presented.

(D) CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of cash on hand, deposits in banks and
highly liquid investments with an original maturity of three months or
less.

(E) INVESTMENTS

The Company carries its investments in private companies at the lower of
cost and net realizable value.

(F) CAPITAL ASSETS

Capital assets are recorded at cost. Depreciation is provided in the
fiscal quarter subsequent to acquisition. Depreciation is charged to
operations over the estimated useful lives of the assets as follows:

<TABLE>
<S> <C>
Computer equipment........................................... 35%
Office equipment............................................. 30%
</TABLE>

The carrying value of capital assets is reviewed on a regular basis for
any permanent impairment in value. To date, no such impairment has been
indicated.

The building period for each shuttle is estimated to be 24 months. All
direct costs including interest related to the construction of the
shuttle are capitalized as incurred with amortization commencing when the
shuttle is available for operation.

F-8
<PAGE>

MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
(A DEVELOPMENT STAGE COMPANY)
(A NEVADA CORPORATION)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1998 AND DECEMBER 31, 1997

(INFORMATION AS AT JUNE 30, 1998
AND FOR THE SIX MONTH PERIOD THEN ENDED
IS UNAUDITED)
(U.S. DOLLARS)

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(G) GOODWILL AND OTHER INTANGIBLES

Goodwill arising on acquisition and other purchased intangibles are
amortized on a straight-line basis over periods ranging from 5 to 10
years. Management regularly reviews the carrying value of goodwill and
intangibles based upon future expected cash flows. To date, no impairment
has been indicated.

(H) FINANCIAL INSTRUMENTS

The Company estimates that the carrying values of its cash and cash
equivalents, accounts payable, due to related party and note payable
approximate fair value at June 30, 1998 and December 31, 1997 due to the
short-term to maturity and the arms-length nature of the transactions.

(I) FOREIGN CURRENCY TRANSLATION

The Company's functional currency is the U.S. dollar since it is the
primary economic environment in which the Company operates. Subsequent to
the acquisition of MSO AS, management reviewed the operations of the
Company to determine whether the functional currency had changed. It was
determined that as all the Company's financing activities will be
denominated in U.S. dollars and that a significant amount of the costs
incurred in construction of shuttles will also be denominated in U.S.
dollars that a change had not occurred.

Transaction amounts denominated in foreign currencies are translated into
U.S. dollars at exchange rates prevailing at the transaction dates.
Carrying values of non-U.S. dollar assets and liabilities are adjusted at
each balance sheet date to reflect the exchange rate prevailing at that
date. Gains and losses arising from restatement of foreign currency
assets and liabilities are included in earnings. Assets and liabilities
of subsidiaries not reporting in U.S. dollars are translated into their
U.S. dollar equivalents at rates of exchange prevailing at each balance
sheet date. Revenues and expenses of such subsidiaries are translated at
exchange rates prevailing on the dates on which such items are recognized
in operations. Gains and losses arising from translation of financial
statements of subsidiaries not reporting in U.S. dollars are deferred and
disclosed as a separate component of shareholders' equity.

(J) RECENT PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board issued Statement
No. 130 (SFAS 130), Reporting Comprehensive Income, which is required to
be adopted for fiscal years beginning on or after December 15, 1997. SFAS
130 establishes standards for the reporting and display of

F-9
<PAGE>

MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
(A DEVELOPMENT STAGE COMPANY)
(A NEVADA CORPORATION)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1998 AND DECEMBER 31, 1997

(INFORMATION AS AT JUNE 30, 1998
AND FOR THE SIX MONTH PERIOD THEN ENDED
IS UNAUDITED)
(U.S. DOLLARS)

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

comprehensive income and its components in a full set of general purpose
financial statements. Reclassification of financial statements for
earlier periods presented is required. SFAS 130 does not currently apply
to the Company as there are no items of comprehensive income in any
period presented.

In June 1997, the Financial Accounting Standards Board issued Statement
No. 131 (SFAS 131), Disclosures About Segments of an Enterprise and
Related Information, which is required to be adopted for fiscal years
beginning on or after December 15, 1997. SFAS 131 establishes new
standards for the reporting of segmented information in annual financial
statements and requires the reporting of certain selected segmented
information on interim reports to shareholders. The impact of SFAS 131 on
the Company's financial statements is not expected to be material.

In June 1998, the Financial Accounting Standards Board issued Statement
No. 133 (SFAS 133), ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING
ACTIVITIES, which standardizes the accounting for derivative instruments.
SFAS 133 is effective for all fiscal quarters of all fiscal years
beginning after June 15, 1999. The impact on the Company's financial
statements is not expected to be material.

3. INVESTMENT

On December 31, 1997, the Company entered into a Securities Purchase
Agreement ("Agreement") to acquire 100 shares (constituting a 50% interest) of
Kaizen Food Corporation ("Kaizen"), a Canadian private company. The Company
purchased 100 shares of Kaizen at $100,000 according to the Agreement. In the
Agreement, the Company was required to raise $500,000 on or before January 20,
1998 to fund Kaizen's research and development activities. This requirement was
not met by the Company; therefore, Kaizen had the right to repurchase its stock
for $50,000 according to the Agreement. Kaizen repurchased the stock during the
six months ended June 30, 1998 for $10,000 in full payment of the repurchase
price.

4. ACQUISITION OF MARINE SHUTTLE OPERATIONS AS

On April 14, 1998, the Company acquired 100% of the issued and outstanding
stock of Marine Shuttle Operations AS, a Norwegian company ("MSO AS") in
exchange for 7,600,000 common shares of the Company. The 7,600,000 shares are
held by a trustee pursuant to the terms of a pooling trust agreement. The shares
cannot be sold prior to the release from the trust. The shares are to be
released as to 10% on July 1, 1999, and an additional 30% on each of July 1,
2000, 2001, and 2002.

F-10
<PAGE>

MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
(A DEVELOPMENT STAGE COMPANY)
(A NEVADA CORPORATION)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1998 AND DECEMBER 31, 1997

(INFORMATION AS AT JUNE 30, 1998
AND FOR THE SIX MONTH PERIOD THEN ENDED
IS UNAUDITED)
(U.S. DOLLARS)

4. ACQUISITION OF MARINE SHUTTLE OPERATIONS AS (CONTINUED)

This transaction has been accounted for using the purchase method and the
purchase price has been allocated to the estimated fair value of net assets
acquired as follows:

<TABLE>
<S> <C>
Estimated fair value of net assets acquired:
Current assets--cash......................................... $ 416,635
----------
Current liabilities.......................................... 181,253
----------
235,382
----------
Intangibles represented by agreements in the area of marketing,
engineering and waste management............................. 2,281,460
----------
Goodwill....................................................... 20,533,144
----------
23,049,986
----------
Less: Advances to MSO AS at date of acquisition................ 249,986
----------
$22,800,000
----------
</TABLE>

The results of operations of MSO AS have been consolidated from April 14,
1998.

5. CAPITAL ASSETS

<TABLE>
<CAPTION>
DECEMBER 31,
JUNE 30, 1998 1997
------------------------------------------- -------------
ACCUMULATED NET BOOK NET BOOK
COST AMORTIZATION VALUE VALUE
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Computer and office equipment....................... $ 35,703 $ -- $ 35,703 $ --
------------- ------------- ------------- -------------
Shuttle construction in progress.................... 185,400 -- 185,400 --
------------- ------------- ------------- -------------
$ 221,103 $ -- $ 221,103 $ --
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>

F-11
<PAGE>

MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
(A DEVELOPMENT STAGE COMPANY)
(A NEVADA CORPORATION)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1998 AND DECEMBER 31, 1997

(INFORMATION AS AT JUNE 30, 1998
AND FOR THE SIX MONTH PERIOD THEN ENDED
IS UNAUDITED)
(U.S. DOLLARS)

6. GOODWILL AND OTHER INTANGIBLES

<TABLE>
<CAPTION>
DECEMBER 31,
JUNE 30, 1998 1997
------------------------------------------- -------------
ACCUMULATED NET BOOK NET BOOK
COST AMORTIZATION VALUE VALUE
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Goodwill............................................ $ 20,533,144 $ 342,220 $ 20,190,924 $ --
------------- ------------- ------------- -------------
Marketing, engineering and waste management
agreements........................................ 2,281,460 76,048 2,205,412 --
Deferred share issue costs.......................... 299,936 -- 299,936 --
------------- ------------- ------------- -------------
$ 23,114,540 $ 418,268 $ 22,696,272 $ --
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>

The deferred share issue costs will be charged to deficit on the closing of
the sale to the public of 20,000,000 common shares pursuant to a Registration
Statement on Form S-1.

7. ACQUISITION OF OFFSHORE SHUTTLE AS

In May 1998, the Company acquired 3,291,738 shares of Offshore Shuttle AS, a
Norwegian limited company ("OSAS"), representing approximately 68% of the
outstanding OSAS capital stock, in exchange for 4,937,607 shares of the
Company's common stock. All of such shares are being held in escrow subject to
completion of a financing of at least $105,000,000 in gross proceeds. If the
financing is not completed on or prior to December 15, 1998, the terms of the
escrow agreement requires that the OSAS shares will be returned to the OSAS
stockholders. On May 20, 1998, the Company entered into two agreements to
acquire an additional 686,668 shares of OSAS (approximately 14% of the
outstanding OSAS capital stock) in exchange for 1,030,002 shares of Common Stock
(the "Additional OSAS Exchanges"). The consummation of the Additional OSAS
Exchanges is subject to certain conditions precedent. The acquisition will be
accounted for using the purchase method when all conditions, including the
$105,000,000 financing, of the acquisition have been satisfied.

OSAS was established in November 1996, to develop and sell specialized
technology applicable to the field of marine transportation. Through an
agreement, OSAS has exclusive rights to use the technology related to the
shuttle concept. Patents related to the shuttle concept and its technology are
pending approval.

OSAS and MSO AS are parties to Head License Agreement dated as of March 31,
1998, as amended September 2, 1998. The Company acquired MSO AS in April 1998
(see Note 4). Pursuant to the agreement, OSAS granted MSO AS the exclusive right
to build and operate five offshore shuttles, an exclusive option to build and
operate two additional offshore shuttles thereafter, and a right of first
refusal with respect to any offshore shuttle licenses that OSAS may seek to
grant during a specified future period.

F-12
<PAGE>

MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
(A DEVELOPMENT STAGE COMPANY)
(A NEVADA CORPORATION)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1998 AND DECEMBER 31, 1997

(INFORMATION AS AT JUNE 30, 1998
AND FOR THE SIX MONTH PERIOD THEN ENDED
IS UNAUDITED)
(U.S. DOLLARS)

7. ACQUISITION OF OFFSHORE SHUTTLE AS (CONTINUED)

In addition, based on functional specifications for each offshore shuttle to be
agreed upon, OSAS shall provide MSO AS with the pre-engineering work, including
designs and descriptions of operational procedures, necessary to construct the
offshore shuttles.

In consideration for the licenses granted and pre-engineering services to be
provided, OSAS shall receive a construction fee equal to ten percent of the
construction price of each of the offshore shuttles, an operating fee equal to
sixteen percent of the gross profit for each contract finalized by MSO AS
involving the use of an offshore shuttle, and an exclusivity fee equal to one
percent of the aggregate construction price of offshore shuttles two through
five ($2,000,000 of which must be remitted to OSAS by November 30, 1998). Other
services rendered by OSAS will be invoiced to MSO AS on fair market terms.

The parties have agreed that orders for each of the first five offshore
shuttles shall be placed in specific years in the period between 1998 through
year 2003. The order for the first offshore shuttle is to be placed by December
31, 1998. Subject, in each case, to an option to extend the order dates by
twelve months upon payment of a $900,000 option exercise fee, an order for the
second offshore shuttle must be placed no later than six months after successful
testing of the first offshore shuttle, and the remaining three Offshore Shuttles
must be ordered by June 30th of each year thereafter. If an order is not placed
on or before the required date, then for the twelve-month period thereafter OSAS
shall be entitled to grant a license to build one offshore shuttle to a third
party.

8. NOTE PAYABLE

By a Loan Agreement dated March 12, 1998, as amended August 27, 1998 and
September 24, 1998, the Company arranged a loan facility with ValorInvest Ltd.
("ValorInvest") whereby ValorInvest would advance up to $3,500,000.

The loan facility is evidenced by three promissory notes. Interest accrues
from the date of each advance at 7.5%. The entire balance of the note shall be
due and payable upon the earlier of December 31, 1998 or the completion of a
public offering for gross proceeds of at least $100,000,000.

9. RELATED PARTY TRANSACTIONS

During the period ended December 31, 1997, the Company incurred $40,000 in
management fees to a company related by a common director. Effective February 1,
1998, the Company entered into a six month consulting agreement with an
officer/director of the Company for a monthly fee of $5,000 per month and
entered into a six month consulting agreement with a company controlled by an
officer/former director for a monthly charge of $2,500. These agreements were
terminated on February 19, 1998 and April 14, 1998, respectively. The Company
subsequently entered into a two year employment agreement with the officer/

F-13
<PAGE>

MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
(A DEVELOPMENT STAGE COMPANY)
(A NEVADA CORPORATION)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1998 AND DECEMBER 31, 1997

(INFORMATION AS AT JUNE 30, 1998
AND FOR THE SIX MONTH PERIOD THEN ENDED
IS UNAUDITED)
(U.S. DOLLARS)

9. RELATED PARTY TRANSACTIONS (CONTINUED)

director for $60,000 per annum and a two year personnel services agreement with
the company controlled by an officer/ former director for $32,100 per annum.

The Company currently leases office space at $750 per month from Intercap
Resource Management U.S., Inc., a wholly-owned subsidiary of Intercap Resource
Management Corp. ("Intercap"). Effective February 1, 1998, the Company entered
into a six month agreement with a former director of Intercap to provide
consulting services for $10,000 per month, ($50,000 was paid during the six
month period ended June 30, 1998).

The amount due to a related company is non-interest bearing, unsecured, and
has no specific terms of repayment.

Effective June 1, 1998, the Company entered into a two-year employment
agreement with the President of the Company, whereby the President shall receive
remuneration of $100,000 per annum.

MSO AS is a party to a personnel services agreement and an accounting
services agreement with RC Consultants AS. The Chairman of RC Consultants AS is
also the Chairman of MSO AS.

MSO AS is a party to a cooperation agreement with Schuller
Industrieentsorgung AG ("Schuller") pursuant to which Schuller shall provide
waste management, onshore dismantling, and oil pollution prevention and cleanup
services. As of June 30, 1998, the Company paid approximately $21,500 to
Schuller for marketing research and other services rendered. The President and a
director of the Company are members of the supervisory board of Schuller.

MSO AS has entered into an agreement with Thyssen Stahlunion GmbH ("TSU")
with respect to the marketing of its proposed services. As of June 30, 1998,
approximately $52,500 had been paid to TSU under such agreement. Jurgen
Ternieden, a director of the Company, is an officer and the head of the Pipes,
Offshore, Special Products Department of TSU.

During the period ended June 30, 1998, the Company paid approximately
$76,000 to a law firm, a member of which is a director of the Company.

10. STOCKHOLDERS' EQUITY

AUTHORIZED

The Company amended the Company's Articles of Incorporation on April 9, 1998
to increase the Company's authorized capital stock from 40,000,000 shares of
common stock to 75,000,000 shares of common stock and to change the name of
the Company to Marine Shuttle Operations Inc.

F-14
<PAGE>

MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
(A DEVELOPMENT STAGE COMPANY)
(A NEVADA CORPORATION)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1998 AND DECEMBER 31, 1997

(INFORMATION AS AT JUNE 30, 1998
AND FOR THE SIX MONTH PERIOD THEN ENDED
IS UNAUDITED)
(U.S. DOLLARS)

10. STOCKHOLDERS' EQUITY (CONTINUED)

ISSUED

The Company has entered into the following transactions related to its
common shares:

i) On incorporation of the Company 10,000,000 common shares were issued at
$0.001 per share for proceeds of $10,000.

ii) On June 16, 1997, the Company issued 10,000,000 common shares at $0.01
per share for proceeds of $100,000.

iii) On August 8, 1997, the Company issued 20,000 common shares at $3.00 per
share for proceeds of $60,000.

iv) On April 14, 1998, the Company issued 7,600,000 common shares in
exchange for all of the issued and outstanding shares of MSO AS (see Note
4).

v) In May 1998, the Company issued 4,937,607 shares of common stock in
exchange for 3,291,738 shares of OSAS.

vi) On May 20, 1998, the Company entered into agreements to issue 1,030,002
common shares pursuant to the acquisition of 686,668 shares of OSAS (see
Note 7).

The Company has established a Stock Option Plan for employees, officers,
directors, consultants, and advisors. Options granted under the Stock Option
Plan may be either incentive stock option or non-qualified stock options.
The Company has reserved 2,000,000 common shares for issuance under the
Stock Option Plan. Options granted for issuance under the Stock Option Plan
generally are not transferable, and the exercise price of incentive stock
options must be at least equal to 100% (110% in the case of optionees who
own more than 10% of the total combined voting power of all classes of stock
of the Company) of the fair market value of the common shares on the date of
grant. As of June 30, 1998, no options were outstanding under the Stock
Option Plan.

11. INCOME TAXES

The Company has not provided for an income tax liability due to the
availability of operating loss carry-forwards. The Company has net operating
losses which may give rise to future tax benefits of approximately $500,000 and
$160,000 of June 30, 1998 and December 31, 1997, respectively. To the extent not
used, net operating loss carryforwards expire in varying amounts beginning in
the year 2012. Based on available evidence, including the Company's history of
operating losses, the uncertainty of future profitability and the impact of tax
laws which may limit the Company's ability to utilize such loss carryforwards,
management has recorded a valuation allowance against the realization of the
deferred tax assets.

F-15
<PAGE>

MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
(A DEVELOPMENT STAGE COMPANY)
(A NEVADA CORPORATION)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1998 AND DECEMBER 31, 1997

(INFORMATION AS AT JUNE 30, 1998
AND FOR THE SIX MONTH PERIOD THEN ENDED
IS UNAUDITED)
(U.S. DOLLARS)

12. SEGMENTED DISCLOSURES

(a) The Company is currently marketing and making preparations for the
construction of its first offshore shuttle for the removal of offshore
oil and gas structures. In accordance with SFAS No. 131 the Company
considers its business to consist of one reportable operating segment.

(b) The Company currently has long-lived assets, other then goodwill and
intangibles, comprising capital assets totalling $221,103 all of which
are located in Norway.

13. SUBSEQUENT EVENTS

Subsequent to June 30, 1998, the Company filed a registration statement on
Form S-1 with the United States Securities and Exchange Commission for an
offering of 20,000,000 of its common shares. It is anticipated that the net
proceeds from this offering will approximate $100,000,000.

F-16
<PAGE>
INDEPENDENT AUDITORS' REPORT

We have been engaged to complete an audit of the balance sheet of Marine Shuttle
Operations AS as of December 31, 1997 and the related statements of income,
shareholder's equity and of cash flows for the period from December 10, 1997
(inception) to December 31, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit. We are not the
elected, statutory auditors of the Company.

We conducted our audit in accordance with International Standards on Auditing
which do not differ materially from United States generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements present fairly, in all material
respects, the financial position of Marine Shuttle Operations AS as of December
31, 1997 and the result of its operations and its cash flows for the period from
December 10, 1997 (inception) to December 31, 1997, in conformity with
accounting principles generally accepted in the United States of America.

/s/ DELOITTE & TOUCHE
25 June 1998
Oslo, Norway

F-17
<PAGE>
MARINE SHUTTLE OPERATIONS AS
(A DEVELOPMENT STAGE ENTERPRISE)

BALANCE SHEET AS OF JUNE 30, 1998 AND DECEMBER 31, 1997

<TABLE>
<CAPTION>
JUNE 30, 1998
(UNAUDITED) DECEMBER 31, 1997
----------------------- --------------------
<S> <C> <C> <C> <C>
NOK USD NOK USD
----------- ---------- --------- ---------
ASSETS

CURRENT ASSETS
Cash and cash equivalents......................................... 2,812,354 366,741 998,827 136,532
----------- ---------- --------- ---------
TOTAL CURRENT ASSETS.............................................. 2,812,354 366,741 998,827 136,532
----------- ---------- --------- ---------
CAPITAL ASSETS
Furniture, fixtures and equipment................................. 273,786 35,703 0 0
Shuttle under construction........................................ 1,421,737 185,400 0 0
----------- ---------- --------- ---------
TOTAL CAPITAL ASSETS.............................................. 1,695,523 221,103 0 0
TOTAL ASSETS...................................................... 4,507,877 587,844 998,827 136,532
----------- ---------- --------- ---------
----------- ---------- --------- ---------

LIABILITIES AND SHAREHOLDERS ' EQUITY

CURRENT LIABILITIES
Accounts payable.................................................. 1,510,212 196,937 0 0
Funding capital (Note 3).......................................... 5,446,150 710,198 0 0
Other current liabilities......................................... 44,459 5,798 0 0
----------- ---------- --------- ---------
TOTAL CURRENT LIABILITIES......................................... 7,000,821 912,933 0 0
----------- ---------- --------- ---------
TOTAL LIABILITIES................................................. 7,000,821 912,933 0 0
----------- ---------- --------- ---------
SHAREHOLDERS' EQUITY
Share capital..................................................... 999,000 130,273 999,000 136,556
Deficit accumulated during the development stage.................. (3,491,944) (455,362) (173) (24)
----------- ---------- --------- ---------
TOTAL SHAREHOLDERS' EQUITY........................................ (2,492,944) (325,089) 998,827 136,532
----------- ---------- --------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY........................ 4,507,877 587,844 998,827 136,532
----------- ---------- --------- ---------
----------- ---------- --------- ---------
</TABLE>

The accompanying notes are an integral part of these financial statements.

Translation of amounts from Norwegian Kroner (NOK) into U.S. dollars (USD) for
the convenience of the reader has been made at the closing average rate by the
Norwegian Central Bank on June 30, 1998, and December 31, 1997 of
USD 1 = NOK 7.6685 and USD 1 = NOK 7.3157 respectively.

F-18
<PAGE>
MARINE SHUTTLE OPERATIONS AS
(A DEVELOPMENT STAGE ENTERPRISE)

STATEMENT OF LOSS FOR THE PERIOD FROM
DECEMBER 10, 1997 (INCEPTION) TO DECEMBER 31, 1997
AND FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1998

<TABLE>
<CAPTION>
PERIOD FROM
DECEMBER 10, 1997 TO
CUMULATIVE FROM SIX MONTH PERIOD ENDED
INCEPTION JUNE 30, 1998 DECEMBER 31, 1997
----------------------- ----------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
NOK USD NOK USD NOK USD
----------- ---------- ----------- ---------- --------- ---------

<CAPTION>
(UNAUDITED) (UNAUDITED)
----------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Operating expenses............................... 3,536,154 470,014 3,536,154 470,014 0 0
----------- ---------- ----------- ---------- --------- ---------
Financial income (expenses)...................... (44,210) (5,875) (44,383) (5,899) 173 24
----------- ---------- ----------- ---------- --------- ---------
----------- ---------- ----------- ---------- --------- ---------
Total operating expenses......................... 3,491,944 464,139 3,491,771 464,115 173 24
----------- ---------- ----------- ---------- --------- ---------
----------- ---------- ----------- ---------- --------- ---------
Net loss before income tax (Note 4).............. (3,491,944) (464,139) (3,491,771) (464,115) (173) (24)
----------- ---------- ----------- ---------- --------- ---------
----------- ---------- ----------- ---------- --------- ---------
Net loss......................................... (3,491,944) (464,139) (3,491,771) (464,115) (173) (24)
----------- ---------- ----------- ---------- --------- ---------
----------- ---------- ----------- ---------- --------- ---------
Basic and diluted loss per share................. (3.49) (0.46) (3.49) (0.46) 0 0
----------- ---------- ----------- ---------- --------- ---------
----------- ---------- ----------- ---------- --------- ---------
Weighted average number of shares outstanding.... 999,000 999,000 999,000 999,000 999,000 999,000
----------- ---------- ----------- ---------- --------- ---------
----------- ---------- ----------- ---------- --------- ---------
</TABLE>

The accompanying notes are an integral part of these financial statements.

Translation of amounts from Norwegian Kroner (NOK) into U.S. dollars (USD) for
the convenience of the reader has been made at the average rate for the period
from December 10, 1997 to December 31, 1997 by the Norwegian Central Bank, of
USD 1 = NOK 7.2920 and from January 1, 1998 to June 30, 1998 of
USD 1= NOK 7.5235.

F-19
<PAGE>
MARINE SHUTTLE OPERATIONS AS
(A DEVELOPMENT STAGE ENTERPRISE)

STATEMENT OF CASH FLOWS FOR THE PERIOD FROM
DECEMBER 10, 1997 (INCEPTION) TO DECEMBER 31, 1997
AND FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1998

OPERATING ACTIVITIES

<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTH PERIOD DECEMBER 10, 1997 TO
CUMULATIVE FROM ENDED
INCEPTION JUNE 30, 1998 DECEMBER 31, 1997
----------------------- ----------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
NOK USD NOK USD NOK USD
----------- ---------- ----------- ---------- --------- ---------

<CAPTION>
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Operating activities:
Net loss......................................... (3,491,944) (455,362) (3,491,771) (455,340) (173) (24)
----------- ---------- ----------- ---------- --------- ---------
----------- ---------- ----------- ---------- --------- ---------
Working capital changes that provided (used)
cash:
Other current liabilities........................ 1,554,671 202,735 1,554,671 202,735 0 0
----------- ---------- ----------- ---------- --------- ---------
----------- ---------- ----------- ---------- --------- ---------
Net cash provided by operating activities........ (1,937,273) (252,627) (1,937,100) (252,605) (173) (24)
----------- ---------- ----------- ---------- --------- ---------
----------- ---------- ----------- ---------- --------- ---------
Investing activities
Investments in shuttle under construction........ (1,421,737) (185,400) (1,421,737) (185,400) 0 0
----------- ---------- ----------- ---------- --------- ---------
Purchase of furniture, fixture and equipment..... (273,786) (35,703) (273,786) (35,703) 0 0
----------- ---------- ----------- ---------- --------- ---------
----------- ---------- ----------- ---------- --------- ---------
Net cash used in investing activities............ (1,695,523) (221,102) (1,695,523) (221,103) 0 0
----------- ---------- ----------- ---------- --------- ---------
----------- ---------- ----------- ---------- --------- ---------
Financing activities
Funding capital proceeds......................... 5,446,150 710,198 5,446,150 710,198 0 0
----------- ---------- ----------- ---------- --------- ---------
Proceeds from issuance of shares................. 999,000 130,273 0 0 999,000 136,556
----------- ---------- ----------- ---------- --------- ---------
----------- ---------- ----------- ---------- --------- ---------
Net cash provided by financing activities........ 6,445,150 840,471 5,446,150 710,198 999,000 136,556
----------- ---------- ----------- ---------- --------- ---------
----------- ---------- ----------- ---------- --------- ---------
Net increase in cash and cash equivalents........ 2,812,354 366,741 1,813,527 236,490 998,827 136,532
----------- ---------- ----------- ---------- --------- ---------
----------- ---------- ----------- ---------- --------- ---------
Cash and cash equivalents at beginning of
period......................................... 0 0 998,827 130,251 0 0
----------- ---------- ----------- ---------- --------- ---------
----------- ---------- ----------- ---------- --------- ---------
Cash and cash equivalents at end of period....... 2,812,354 366,741 2,812,354 366,741 998,827 136,532
----------- ---------- ----------- ---------- --------- ---------
----------- ---------- ----------- ---------- --------- ---------
</TABLE>

The accompanying notes are an integral part of these financial statements.

Translation of amounts from Norwegian Kroner (NOK) into U.S. dollars (USD) for
the convenience of the reader has been made at the average rate for the period
from November 26, 1996 to December 31, 1997, 1 USD = NOK 7.0250 (June 30, 1998:
1 USD = NOK 7.5235) for the Income Statement and at the closing average rate on
December 31, 1997, at USD 1 = NOK 7.3157 (June 30, 1998: 1 USD = NOK 7.6685) for
the Balance Sheet.

F-20
<PAGE>
MARINE SHUTTLE OPERATIONS AS
(A DEVELOPMENT STAGE ENTERPRISE)

STATEMENT OF SHAREHOLDERS' EQUITY FOR THE SIX MONTH PERIOD
ENDED JUNE 30, 1998 AND FOR THE PERIOD FROM DECEMBER 10, 1997 (INCEPTION)
TO DECEMBER 31, 1997

<TABLE>
<CAPTION>
DEFICIT
ACCUMULATED TOTAL
DURING THE SHAREHOLDERS
NUMBER OF SHARE RESTRICTED DEVELOPMENT EQUITY
SHARES CAPITAL RESERVE STAGE NOK
----------- --------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Paid-in capital at inception on December 10,
1997............................................. 999,000 999,000 -- -- 999,000
Net loss 1997...................................... -- -- -- (173) (173)
----------- --------- --- ------------ ------------
BALANCE DECEMBER 31, 1997.......................... 999,000 999,000 -- (173) 998,827
NET LOSS JANUARY 1--JUNE 30, 1998.................. -- -- -- (3,491,771) (3,491,771)
----------- --------- --- ------------ ------------
BALANCE JUNE 30, 1998 (UNAUDITED).................. 999,000 999,000 -- (3,491,944) (2,492,944)
----------- --------- --- ------------ ------------
</TABLE>

Marine Shuttle Operations AS was established December 10, 1997 by means of the
issuance of 999,000 Shares in exchange for cash of NOK 999,000.

The Company had authorized, issued and outstanding ordinary shares having a par
value of NOK 1,- per share for the period ended June 30, 1998.

The accompanying notes are an integral part of these financial statements.

F-21
<PAGE>
MARINE SHUTTLE OPERATIONS AS
(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD FROM

DECEMBER 10, 1997 (INCEPTION) TO DECEMBER 31, 1997
AND THE SIX MONTHS ENDED JUNE 30, 1998

(INFORMATION AS OF JUNE 30, 1998 AND FOR THE
SIX MONTHS THEN ENDED IS UNAUDITED)

NOTE 1--NATURE OF BUSINESS

Marine Shuttle Operations AS (the Company) was established December 10,
1997. The Company is seeking to become a leading player in the market for
decommissioning, installing and transporting offshore oil and gas structures.
The Company initially intends to concentrate its efforts on decommissioning
fixed steel structures, primarily the several hundred large steel installations
situated in the intermediate water depths. The Company has formed strategic
alliances to test, develop, manufacture and commercialize the shuttle concept.

On April 14, 1998, Marine Shuttle Operations Inc. acquired all of the issued
and outstanding capital stock of the Company, consisting of 999,000 shares of
voting common stock, in exchange for 7,600,000 shares of common voting stock of
Marine Shuttle Operations Inc.

See Note 6--Subsequent events.

NOTE 2--ACCOUNTING PRINCIPLES

CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of cash on hand, deposits in banks and
highly liquid investments with an original maturity of three months or less.

INCOME TAXES

The Company accounts for income taxes using the asset and liability approach
that requires the recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been recognized in the
financial statements or tax returns.

ESTIMATES AND ASSUMPTIONS

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amount of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

FURNITURE, FIXTURES AND EQUIPMENT

Furniture, fixture and equipment are stated at cost. Depreciation will be
calculated using the straight line method over the estimated service lives of
the respective assets as follows:

<TABLE>
<S> <C>
Furniture............................................................ 20%
Computer equipment................................................... 35%
Office equipment..................................................... 30%
</TABLE>

F-22
<PAGE>
MARINE SHUTTLE OPERATIONS AS
(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD FROM

DECEMBER 10, 1997 (INCEPTION) TO DECEMBER 31, 1997
AND THE SIX MONTHS ENDED JUNE 30, 1998

(INFORMATION AS OF JUNE 30, 1998 AND FOR THE
SIX MONTHS THEN ENDED IS UNAUDITED)

NOTE 2--ACCOUNTING PRINCIPLES (CONTINUED)

Management will periodically review the carrying value of furniture, fixture
and equipment to ensure that any permanent impairment in value is recognized and
reflected in the results from operations.

SHUTTLE UNDER CONSTRUCTION

The building period for each Shuttle currently is estimated to be 24 months.
All costs related to the construction of the Shuttle will be capitalized as
incurred under "Shuttle under construction".

FOREIGN CURRENCY TRANSACTIONS

Transactions denominated in foreign currency are translated to NOK at the
currency rate at the date of the transaction. Realized and unrealized gains or
loses on monetary assets or liabilities denominated in a foreign currency are
included in net income.

NOTE 3--FUNDING CAPITAL

The Company entered into a Loan Agreement (the Loan Agreement), dated May
13, 1998, with Marine Shuttle Operations Inc. Under the terms of the Loan
Agreement, Marine Shuttle Operations Inc. will provide the Company a loan of up
to USD 1,500,000. The loan bears an interest rate of 6% per annum.

As of June 30, 1998, the Company had borrowed USD 750,000 (NOK 5,446,150)
under the Loan Agreement.

NOTE 4--INCOME TAX

INCOME TAX COMPUTATION

<TABLE>
<CAPTION>
PERIOD ENDED
DECEMBER 31, 1997
-------------------
<S> <C>
Net loss before tax............................................................................ (173)
---
Tax loss carry forward......................................................................... (173)
---
Current tax payable............................................................................ 0
---
---
</TABLE>

F-23
<PAGE>
MARINE SHUTTLE OPERATIONS AS
(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD FROM

DECEMBER 10, 1997 (INCEPTION) TO DECEMBER 31, 1997
AND THE SIX MONTHS ENDED JUNE 30, 1998

(INFORMATION AS OF JUNE 30, 1998 AND FOR THE
SIX MONTHS THEN ENDED IS UNAUDITED)

NOTE 4--INCOME TAX (CONTINUED)

TEMPORARY DIFFERENCES AS OF DECEMBER 31, 1997

<TABLE>
<CAPTION>
DECEMBER 31, 1997
-------------------
<S> <C>
Tax loss carry forward......................................................................... (173)
---
Net............................................................................................ (173)
---
28% deferred tax asset......................................................................... 48
Valuation allowance............................................................................ (48)
---
Deferred tax asset............................................................................. 0
---
---
</TABLE>

The Company's tax loss carry forward expires in 2007.

Based on available evidence, including the Company's history of operating
losses and the uncertainty of future profitability, management has recorded a
valuation allowance to reduce the deferred tax asset to zero.

NOTE 5--RELATED PARTIES TRANSACTIONS

ENGAGEMENT AGREEMENT, MANAGING DIRECTOR

Mr. Steve Adshead will act as the Managing Director for a limited period
until a permanent person has been hired for that position. For 1998 Mr. Steve
Adshead will be paid based on a daily rate of NOK 6,000, limited to NOK 80,000
per month. He will continue as an executive director after the expiration of
this agreement.

ENGAGEMENT AGREEMENT, WORKING CHAIRMAN OF THE BOARD

Mr. Sverre Hansen will act as Working Chairman of the Board of the Company
for a limited period until the General Assembly elects another person. For 1998
Mr. Sverre Hansen will be paid based on a daily rate of NOK 6,000, limited to
NOK 50,000 per month.

AGREEMENT WITH AN ENGINEERING COMPANY

Marine Shuttle Operations AS has entered into a personnel services agreement
and an accounting services agreement with RC Consultants AS. Mr. Sverre Hansen,
the Chairman of the Board of Directors of RC Consultants AS, is the Chairman of
the Board of Directors of Marine Shuttle Operations AS. Compensation for
services rendered under such agreements is to be based on normal trade terms.

AGREEMENT WITH A SERVICE COMPANY

Marine Shuttle Operations AS has entered into an agreement with Schuller
Industrietsordnung GmbH. Mr. Franz Eder, the President and Chairman of the Board
of Marine Shuttle Operations Inc., and Dr. Hubert Besner, a director of Marine
Shuttle Operations Inc., are members fo the Supervisory Board of

F-24
<PAGE>
MARINE SHUTTLE OPERATIONS AS
(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD FROM

DECEMBER 10, 1997 (INCEPTION) TO DECEMBER 31, 1997
AND THE SIX MONTHS ENDED JUNE 30, 1998

(INFORMATION AS OF JUNE 30, 1998 AND FOR THE
SIX MONTHS THEN ENDED IS UNAUDITED)

NOTE 5--RELATED PARTIES TRANSACTIONS (CONTINUED)

Schuller Industrietsordnung GmbH. Compensation for services rendered under such
agreement is to be based on normal trade terms.

NOTE 6--SUBSEQUENT EVENTS

ACQUISITION BY MARINE SHUTTLE OPERATIONS INC.

On April 14, 1998, Marine Shuttle Operations Inc. acquired all of the issued
and outstanding capital stock of the Company in exchange for 7,600,000 shares of
common stock of Marine Shuttle Operations Inc.

HEAD LICENSE AGREEMENT

The Company entered into a Head License Agreement with Offshore Shuttle AS
dated March 31, 1998, as amended. Pursuant to the Head License Agreement,
Offshore Shuttle AS granted Marine Shuttle Operations AS the exclusive right to
build and operate five offshore shuttles, an exclusive option to build and
operate two additional offshore shuttles thereafter, and a right of first
refusal with respect to any offshore shuttle licenses that Offshore Shuttle AS
may seek to grant during a specified future period.

In addition, based on functional specifications for each offshore shuttle to
be agreed upon, Offshore Shuttle AS shall provide Marine Shuttle Operations AS
with the pre-engineering work, including designs and descriptions of operational
procedures, necessary to construct the offshore shuttles.

In consideration for the licenses granted and pre-engineering services to be
provided, Offshore Shuttle AS shall receive a construction fee equal to ten
percent of the construction price of each of the offshore shuttles, an operating
fee equal to sixteen percent of the gross profit for each contract finalized by
Marine Shuttle Operations AS involving the use of an offshore shuttle, and an
exclusivity fee equal to one percent of the aggregate construction price of
offshore shuttles two through five. Other services rendered by Offshore Shuttle
AS will be invoiced to Marine Shuttle Operations AS on fair market terms.

The parties have agreed that yard orders for each of the first five offshore
shuttles shall be placed in specific years in the period between 1998 through
year 2003. The order for the first offshore shuttle is to be placed by December
31, 1998. Subject, in each case, to an option to extend the order dates by
twelve months upon payment of $900,000 option exercise fee, an order for the
second offshore shuttle must be placed no later than six months after successful
testing of the first offshore shuttle, and the remaining three offshore shuttles
must be ordered by June 30th of each year thereafter. If an order is not placed
on or before the required date, then for the twelve-month period thereafter
Offshore Shuttle AS shall be entitled to grant a license to build one offshore
shuttle to a third party.

The binding nature of the Head License Agreement is conditional upon
Offshore Shuttle AS having received payment from Marine Shuttle Operations AS of
the first instalment of the exclusivity fee of USD 2,000,000 by November 30,
1998 and Marine Shuttle Operations AS having placed a firm order for offshore
shuttle number one with a construction yard by December 31, 1998.

F-25
<PAGE>
MARINE SHUTTLE OPERATIONS AS
(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD FROM

DECEMBER 10, 1997 (INCEPTION) TO DECEMBER 31, 1997
AND THE SIX MONTHS ENDED JUNE 30, 1998

(INFORMATION AS OF JUNE 30, 1998 AND FOR THE
SIX MONTHS THEN ENDED IS UNAUDITED)

NOTE 6--SUBSEQUENT EVENTS (CONTINUED)
LEASE AGREEMENTS

In April 1998, Marine Shuttle Operations AS entered into a lease for office
space. The agreement lasts for half a year from April 15, 1998 with an option to
renew the agreement for one year at a time. The rent during such six month
period is NOK 84,000.

THYSSEN STAHLUNION GMBH--STRATEGIC ALLIANCE

Pursuant to a Marketing Aggreement dated April 14, 1998, Thyssen Stahlunion
GmbH will market the Offshore Shuttle on a worldwide basis to major oil
companies, offshore contractors, and others as part of its package of offshore
services. In addition, Thyssen Stahlunion GmbH shall act as a procurement
service center for the steel and equipment to be used in constructing the
Offshore Shuttle, and shall have a right of first refusal to lease the Offshore
Shuttle if Thyssen Stahlunion GmbH is engaged in any decommissioning,
transportation, or installation project. Thyssen Stahlunion GmbH shall receive a
commission at a rate to be agreed upon for its marketing services and shall be
precluded from promoting any products or services competitive with those of the
Company.

RC CONSULTANTS AS--STRATEGIC ALLIANCE

Pursuant to a personnel agreement with Marine Shuttle Operations AS, RC
Consultants AS will provide Marine Shuttle Operations AS with the engineers and
technicians needed during the design, engineering, fabrication, and operation of
the Offshore Shuttle. In addition, pursuant to an accounting services agreement,
RC Consultants AS will provide Marine Shuttle Operations AS with bookkeeping
assistance.

SCHULLER INDUSTRIETSORDNUNG GMBH--STRATEGIC ALLIANCE

Schuller Industrietsordnung GmbH is a service company specializing in waste
management, onshore dismantling and oil pollution prevention and clean-up.
Marine Shuttle Operations AS and Schuller Industrietsordnung GmbH have entered
into a cooperation agreement pursuant to which Schuller Industrietsordnung GmbH
will provide such services to Marine Shuttle Operations AS, subject to the
execution of a written agreement on a project-specific basis.

F-26
<PAGE>
INDEPENDENT AUDITORS' REPORT

We have been engaged to complete an audit of the balance sheet of Offshore
Shuttle AS as of December 31, 1997 and 1996 and the related statements of
income, shareholders' equity and of cash flows for the twelve month period ended
December 31, 1997 and the period from November 29, 1996 (date of inception) to
December 31, 1996. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit. We are not the elected, statutory
auditors of the Company.

In our opinion, the financial statements present fairly, in all material
respects, the financial position of Offshore Shuttle AS as of December 31, 1997
and 1996 and the result of its operations and its cash flows for the twelve
month period ended December 31, 1997 and the period from November 29, 1996 (date
of inception) to December 31, 1996, in conformity with accounting principles
generally accepted in the United States of America.

/s/ DELOITTE & TOUCHE

25 June 1998
Oslo, Norway

F-27
<PAGE>
OFFSHORE SHUTTLE AS
(A DEVELOPMENT STAGE ENTERPRISE)

BALANCE SHEET AS OF DECEMBER 31, 1996 AND 1997 AND JUNE 30, 1998

<TABLE>
<CAPTION>
JUNE 30, 1998 DECEMBER 31, 1997 DECEMBER 31, 1996
--------------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
NOK USD NOK USD NOK USD
---------- --------- --------- --------- --------- ---------

<CAPTION>
(UNAUDITED)
---------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS

Current assets
Cash and cash equivalents.......................... 13,086,523 1,706,530 22,155,782 3,028,525 990,540 153,489
Restricted cash (Note 3)........................... 333,851 43,535 230,627 31,525
Accounts receivable (Note 4)....................... 101,564 13,244 100,000 13,669 0 0
Other current assets (Note 5)...................... 1,334,078 173,969 897,862 122,731 0 0
---------- --------- --------- --------- --------- ---------
Total current assets............................... 14,856,016 1,937,278 23,384,271 3,196,450 990,540 153,489
---------- --------- --------- --------- --------- ---------
Capital assets (Note 6)
Furniture, fixtures and equipment, net of
accumulated depreciation......................... 853,984 111,363 398,700 54,499 0 0
---------- --------- --------- --------- --------- ---------
Total capital assets............................... 853,984 111,363 398,700 54,499 0 0
---------- --------- --------- --------- --------- ---------
Total assets....................................... 15,710,000 2,048,641 23,782,971 3,250,949 990,540 153,489
---------- --------- --------- --------- --------- ---------
---------- --------- --------- --------- --------- ---------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable................................... 1,430,408 186,530 2,193,599 299,848 0 0
Social security and employees taxes, accrued
salaries......................................... 247,104 32,223 377,095 51,546 0 0
Other current liabilities.......................... 21,220 2,767 21,220 2,901 890,540 137,993
---------- --------- --------- --------- --------- ---------
Total current liabilities.......................... 1,698,732 221,521 2,591,914 354,295 890,540 137,993
---------- --------- --------- --------- --------- ---------
Shareholders' equity
Share capital...................................... 241,600 31,506 241,100 32,957 100,000 15,495
Restricted reserve................................. 5,650,000 736,780 5,650,000 772,312 0 0
Other paid in capital.............................. 24,777,089 3,231,022 24,646,790 3,421,894 0 0
Deficit accumulated during the development stage... (16,657,421) (2,172,188) (9,346,833) (1,330,509)
---------- --------- --------- --------- --------- ---------
Total shareholders' equity......................... 14,011,268 1,827,120 21,191,057 2,896,654 100,000 15,495
---------- --------- --------- --------- --------- ---------
Total liabilities and shareholders' equity......... 15,710,000 2,048,641 23,782,971 3,250,949 990,540 153,489
---------- --------- --------- --------- --------- ---------
---------- --------- --------- --------- --------- ---------
</TABLE>

Translation of amounts from Norwegian kroner (NOK) into U.S. dollars (USD) for
the convenience of the reader has been made at the closing average rates by the
Norwegian Central Bank on June 30, 1998 and December 31, 1997 and December 31,
1996 of USD 1 = 7.6685 and USD 1 = 7.3157 and USD1 = 6.4535 respectively.

F-28
<PAGE>
OFFSHORE SHUTTLE AS
(A DEVELOPMENT STAGE ENTERPRISE)

STATEMENT OF LOSS FOR THE PERIOD FROM

NOVEMBER 29, 1996 (INCEPTION) TO DECEMBER 31, 1996,

THE TWELVE MONTHS ENDED DECEMBER 31, 1997, THE SIX MONTHS ENDED
JUNE 30, 1998 AND CUMULATIVE FROM INCEPTION TO JUNE 30, 1998

<TABLE>
<CAPTION>
CUMULATIVE FROM PERIOD FROM
INCEPTION TO SIX MONTHS ENDED YEAR ENDED NOVEMBER 29, 1996 TO
JUNE 30, 1998 JUNE 30, 1998 DECEMBER 31, 1997 DECEMBER 31, 1996
---------------------- ---------------------- ---------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NOK USD NOK USD NOK USD NOK USD
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------

<CAPTION>
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Operating revenue and
expenses
Fees.................... 500,000 70,232 100,000 13,292 400,000 56,940 0 0
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total operating
revenue............... 500,000 70,232 100,000 13,292 400,000 56,940 0 0
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Salaries and other
personnel expenses.... 2,812,705 388,443 1,266,026 168,275 1,546,679 220,168 0 0
Research and
development........... 8,400,350 1,158,701 3,930,895 522,480 4,469,455 636,221 0 0
General and
administrative
expenses.............. 6,445,005 893,950 2,490,176 330,985 3,954,829 562,965 0 0
Depreciation............ 169,914 23,417 81,614 10,848 88,300 12,569 0 0
Interest income/expense,
net................... (670,553) (92,074) (358,123) (47,600) (312,430) (44,474) 0 0
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total operating
expenses.............. 17,157,421 2,372,437 7,410,588 984,988 9,746,833 1,387,449 0 0
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net loss before income
tax (Note 7).......... (16,657,421) (2,302,205) (7,310,588) (971,696) (9,346,833) (1,330,509) 0 0
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net loss................ (16,657,421) (2,302,205) (7,310,588) (971,696) (9,346,833) (1,330,509) 0 0
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Basic and diluted loss
per share............. 1.51 (0.20) (2.67) (0.38) 0 0
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
Weighted average number
of shares
outstanding........... 4,827,000 4,827,000 3,505,000 3,505,000 2,000,000 2,000,000
</TABLE>

The accompanying notes are an integral part of these financial statements.

Translation of amounts from Norwegian kroner (NOK) into U.S. dollars (USD) for
the convenience of the reader has been made at the average rate by the Norwegian
Central Bank for the periods from January 1, 1998 to June 30, 1998 and from
November 29, 1996 to December 31, 1997of USD 1 = NOK 7.5235 and of USD 1 = NOK
7.0250 respectively.

F-29
<PAGE>
OFFSHORE SHUTTLE AS
(A DEVELOPMENT STAGE ENTERPRISE)

STATEMENT OF CASH FLOWS FOR THE PERIOD FROM

NOVEMBER 29, 1996 (INCEPTION) TO DECEMBER 31, 1996,

THE TWELVE MONTHS ENDED DECEMBER 31, 1997, THE SIX MONTHS ENDED
JUNE 30, 1998 AND CUMULATIVE FROM INCEPTION TO JUNE 30, 1998

<TABLE>
<CAPTION>
CUMULATIVE FROM PERIOD FROM
INCEPTION TO SIX MONTHS ENDED YEAR ENDED NOVEMBER 29, 1996 TO
JUNE 30, 1998 JUNE 30, 1998 DECEMBER 31, 1997 DECEMBER 31, 1996
------------------------ ------------------------ ---------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NOK USD NOK USD NOK USD NOK USD
----------- ----------- ----------- ----------- ---------- ---------- ---------- ----------

<CAPTION>
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Operating activities:
Net loss............. (16,657,421) (2,172,188) (7,310,588) (953,327) (9,346,833) (1,330,510) 0 0
Adjustments to
reconcile net loss
to net cash used in
operating
activities:
Depreciation......... 169,914 22,157 81,614 10,643 88,300 12,569 0 0
Working capital
changes that
provided (used)
cash:
Accounts
receivable....... (101,563) (13,244) (1,563) (204) (100,000) (13,669) 0 0
Other current
assets and
restricted
cash............. (1,667,932) (217,504) (539,443) (70,345) (1,128,489) (154,256) 0 0
Current
liabilities...... 1,698,734 221,521 (893,180) (116,474) 1,701,374 232,565 890,540 137,993
----------- ----------- ----------- ----------- ---------- ---------- ---------- ----------
Net cash provided
(used) by operating
activities......... (16,558,268) (2,159,258) (8,663,160) (1,129,707) (8,785,648) (1,253,301) 890,540 137,993
Investing activities:
Purchases of
furniture, fixtures
and equipment...... (1,023,898) (133,520) (536,898) (70,013) (487,000) (67,069) 0 0
----------- ----------- ----------- ----------- ---------- ---------- ---------- ----------
Net cash used in
investing
activities......... (1,023,898) (133,520) (536,898) (70,013) (487,000) (67,069) 0 0
Financing activities:
Proceeds from
issuance of shares,
net of offering
costs.............. 30,668,689 3,999,307 130,799 17,057 30,437,890 4,213,496 100,000 15,495
Net cash provided by
financing
activities......... 30,668,689 3,999,307 130,799 17,057 30,437,890 4,213,496 100,000 15,495
Net increase
(decrease) in cash
and cash
equivalents........ 13,086,523 1,706,530 (9,069,259) (1,182,664) 21,165,242 2,893,126 990,540 153,489
----------- ----------- ----------- ----------- ---------- ---------- ---------- ----------
Cash and cash
equivalents at
beginning of
period............. 0 0 22,155,782 2,889,194 990,540 135,399 0 0
----------- ----------- ----------- ----------- ---------- ---------- ---------- ----------
Cash and cash
equivalents at end
of period.......... 13,086,523 1,706,530 13,086,523 1,706,530 22,155,782 3,028,525 990,540 153,489
----------- ----------- ----------- ----------- ---------- ---------- ---------- ----------
----------- ----------- ----------- ----------- ---------- ---------- ---------- ----------
</TABLE>

The accompanying notes are an integral part of these financial statements.

Translation of amounts from Norwegian kroner (NOK) into U.S. Dollars (USD) for
the convenience of the reader has been made at the average rate from the period
from November 29, 1996 to December 31, 1997, 1 USD = NOK 7.0250 (June 30, 1998:
1 USD = NOK 7.5235) for the Income Statement and at the closing average rate on
December 31, 1996, at USD 1 = NOK 6.4535 (December 31, 1997: 1 USD = NOK 7.3157;
June 30, 1998: 1 USD = NOK 7.6685) for the Balance Sheet.

F-30
<PAGE>
OFFSHORE SHUTTLE AS
(A DEVELOPMENT STAGE ENTERPRISE)

STATEMENT OF SHAREHOLDERS' EQUITY FOR THE PERIOD FROM

NOVEMBER 29, 1996 (INCEPTION) TO DECEMBER 31, 1996,

THE TWELVE MONTHS ENDED DECEMBER 31, 1997 AND
THE SIX MONTHS ENDED JUNE 30, 1998

<TABLE>
<CAPTION>
DEFICIT
NUMBER OF ACCUMULATED TOTAL
SHARES SHARE RESTRICTED OTHER PAID DURING THE SHAREHOLDERS'
OUTSTANDING(1) CAPITAL(2) RESERVE(2) IN CAPITAL DEVELOPMENT STAGE EQUITY
------------- ----------- ----------- ---------- ------------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Paid-in capital at inception on
November 29, 1996................. 2,000,000 100,000 100,000
BALANCE, DECEMBER 31, 1996.......... 2,000,000 100,000 100,000
Share issue, January 6, 1997........ 1,000,000 50,000 5,950,000 6,000,000
Offering costs...................... (300,000) (300,000)
Share issue, April 7, 1997.......... 222,000 11,100 1,986,900 1,998,000
Share issue, September 8, 1997...... 1,600,000 80,000 23,920,000 24,000,000
Offering costs...................... (1,260,110) (1,260,110)
Net loss 1997....................... (9,346,833) (9,346,833)
------------------ -------------
BALANCE, DECEMBER 31, 1997.......... 4,822,000 241,100 5,650,000 24,646,790 (9,346,833) 21,191,057
Option exercised April 3, 1998...... 10,000 500 130,299 130,799
NET LOSS JANUARY 1--JUNE 30, 1998... (7,310,588) (7,310,588)
---------- ------------------ -------------
BALANCE, JUNE 30, 1998
(UNAUDITED)....................... 4,832,000 241,600 5,650,000 24,777,089 (16,657,421) 14,011,268
------------- ----------- ----------- ---------- ------------------ -------------
</TABLE>

Offshore Shuttle AS was established November 29, 1996 by means of the issuance
of 1,000,000 shares in exchange for cash of NOK 100,000.

Offshore Shuttle AS had authorized, issued and outstanding ordinary shares
having a par value of NOK 0.05 per share for the period ended March 31, 1998.

1) On September 9, 1997 the Company carried out a share split, by reducing the
par value from NOK 0.10 to 0.05 per share. This has been presented
retroactively from inception.

2) Share capital and Restricted Reserve of the Company constitute the
nondistributable portion of shareholders' equity and are not available for
dividend purposes.

The accompanying notes are an integral part of these financial statements.

F-31
<PAGE>
OFFSHORE SHUTTLE AS
(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD FROM

NOVEMBER 29, 1996 (INCEPTION) TO DECEMBER 31, 1996
THE TWELVE MONTHS ENDED DECEMBER 31, 1997
AND THE SIX MONTHS ENDED JUNE 30, 1998

(INFORMATION AS OF JUNE 30, 1998 AND FOR THE
SIX MONTHS THEN ENDED IS UNAUDITED)

NOTE 1--NATURE OF BUSINESS

Offshore Shuttle AS (the Company) was established November 29, 1996 in Oslo,
Norway. The purpose of the Company is to commercially exploit the potential of
the Shuttle concept.

Through an agreement with Mr. Gunnar Foss and Mr. Per Bull Haugso/en (see
Note 10), the Company has the exclusive rights to the use of the technology
related to the Shuttle concept. Patents related to the Shuttle concept and its
technology are pending approval.

In May 1988, Marine Shuttle Operations Inc. acquired 3,291,738 shares of the
Company representing approximately 68% of the outstanding shares in the Company.
All of such shares are being held in escrow subject to completion of a financing
of at least US $ 105,000,000 in gross proceeds. If the financing is not
completed on or prior to December 15, 1998, the terms of the escrow agreement
requires that the shares will be returned to the shareholders. On May 20, 1998,
Marine Shuttle Operations Inc. entered into two agreements to acquire an
additional 686,668 shares of the Company, approximately 14% of the outstanding
shares. The consummation of the acquisition of these additional shares is
subject to certain conditions precedent.

See Note 10, Subsequent Events, Head License Agreement.

NOTE 2--SIGNIFICANT ACCOUNTING PRINCIPLES

CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of cash on hand, deposits in banks and
highly liquid investments with an original maturity of three months or less.

RESEARCH AND DEVELOPMENT

Research and development costs are expensed when incurred.

FURNITURE, FIXTURES AND EQUIPMENT

Furniture, fixture and equipment are stated at cost. Depreciation is
provided by the straight line method over the estimated service lives of the
respective assets as follows:

<TABLE>
<S> <C>
Furniture.............................................................. 20%
Computer equipment..................................................... 35%
Office equipment....................................................... 30%
</TABLE>

Management periodically reviews the carrying value of furniture, fixture and
equipment to ensure that any permanent impairment in value is recognized and
reflected in the results from operations.

F-32
<PAGE>
OFFSHORE SHUTTLE AS
(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD FROM

NOVEMBER 29, 1996 (INCEPTION) TO DECEMBER 31, 1996
THE TWELVE MONTHS ENDED DECEMBER 31, 1997
AND THE SIX MONTHS ENDED JUNE 30, 1998

(INFORMATION AS OF JUNE 30, 1998 AND FOR THE
SIX MONTHS THEN ENDED IS UNAUDITED)

NOTE 2--SIGNIFICANT ACCOUNTING PRINCIPLES (CONTINUED)
STOCK-BASED COMPENSATION

The Company accounts for stock-based compensation using the intrinsic value
based method in accordance with Accounting Principles Board (APB) Opinion No.
25, Accounting for Stock Issued to Employees.

FOREIGN CURRENCY TRANSACTIONS

Transactions denominated in foreign currency are translated to NOK at the
currency rate at the date of the transaction. Realized and unrealized gains or
losses on monetary assets or liabilities denominated in a foreign currency are
included in net income.

INCOME TAXES

PENSION

The Company has a defined benefit retirement plan which covers all
employees.

Plan benefits are based on years of service and final salary level. The plan
is administered by an insurance company.

Based on the short period of operations, no actuarial calculations of the
pension plan status have been performed. An actuarial calculation is expected to
be completed for the year ended December 31, 1998. The pension expense is not
expected to have a material impact on the Company's results of operations.

ESTIMATES AND ASSUMPTIONS

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amount of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

RECENT PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board issued Statement No.
130 (SFAS 130), REPORTING COMPREHENSIVE INCOME, which is required to be adopted
for fiscal years beginning on or after December 15, 1997. SFAS 130 establishes
standards for the reporting and display of comprehensive income and its
components in a full set of general purpose financial statements. SFAS 130 does
not apply to the Company as there are no items of comprehensive income in any
period presented.

F-33
<PAGE>
OFFSHORE SHUTTLE AS
(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD FROM

NOVEMBER 29, 1996 (INCEPTION) TO DECEMBER 31, 1996
THE TWELVE MONTHS ENDED DECEMBER 31, 1997
AND THE SIX MONTHS ENDED JUNE 30, 1998

(INFORMATION AS OF JUNE 30, 1998 AND FOR THE
SIX MONTHS THEN ENDED IS UNAUDITED)

NOTE 2--SIGNIFICANT ACCOUNTING PRINCIPLES (CONTINUED)
In June 1997, the Financial Accounting Standards Board issued Statement No.
131 (SFAS 131), DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED
INFORMATION, which is required to be adopted for fiscal years beginning on or
after December 15, 1997. SFAS 131 establishes new standards for the reporting of
segment information in annual financial statements and requires the reporting of
certain selected segment information on interim reports to shareholders. The
impact of SFAS 131 on the Company's financial statements is not expected to be
material.

NOTE 3--RESTRICTED CASH

Cash and cash equivalents include taxes withheld from employees of NOK
111,019 (June 30, 1998: 189,965) and rental deposit of NOK 119,608 (June 30,
1998: 143,886) as of December 31, 1997.

NOTE 4--ACCOUNTS RECEIVABLE

Accounts receivable are recorded at net realizable value. No allowance for
doubtful account is deemed necessary.

NOTE 5--OTHER CURRENT ASSETS

<TABLE>
<CAPTION>
DECEMBER 31, 1997
-----------------
<S> <C>
Prepaid expenses........................................................... 118,627
VAT receivable............................................................. 779,235
-------
897,862
</TABLE>

F-34
<PAGE>
OFFSHORE SHUTTLE AS
(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD FROM

NOVEMBER 29, 1996 (INCEPTION) TO DECEMBER 31, 1996
THE TWELVE MONTHS ENDED DECEMBER 31, 1997
AND THE SIX MONTHS ENDED JUNE 30, 1998

(INFORMATION AS OF JUNE 30, 1998 AND FOR THE
SIX MONTHS THEN ENDED IS UNAUDITED)

NOTE 6--FURNITURE, FIXTURE AND EQUIPMENT

<TABLE>
<CAPTION>
DECEMBER 31, 1997
-------------------------------------------------
<S> <C> <C> <C> <C>
OFFICE COMPUTER
EQUIPMENT EQUIPMENT FURNITURE TOTAL
----------- ----------- ----------- ----------
November 26, 1996................................................. 0
Additions during the period....................................... 60,617 285,839 140,544 487,000
Accumulated depreciation.......................................... (15,917) (49,839) (22,544) (88,300)
----------- ----------- ----------- ----------
Net book value, December 31, 1997................................. 44,700 236,000 118,000 398,700
----------- ----------- ----------- ----------
----------- ----------- ----------- ----------

JUNE 30, 1998 (UNAUDITED)
-------------------------------------------------
<S> <C> <C> <C> <C>
Cost of March 31, 1997............................................ 60,617 285,839 140,544 487,000
Additions during the period....................................... 9,470 332,909 204,519 546,898
----------- ----------- ----------- ----------
Sold furniture during the period.................................. (10,000) (10,000)
Accumulated depreciation.......................................... (23,050) (107,858) (39,006) (169,914)
----------- ----------- ----------- ----------
----------- ----------- ----------- ----------
Net book value, June 30, 1998..................................... 47,037 510,890 296,057 853,984
----------- ----------- ----------- ----------
----------- ----------- ----------- ----------
</TABLE>

NOTE 7--INCOME TAX

INCOME TAX COMPUTATION

<TABLE>
<CAPTION>
PERIOD ENDED
DECEMBER 31, 1997
-----------------
<S> <C>
Net loss before tax............................................................................ (9,346,833)
Offering cost, charged to equity............................................................... (1,560,110)
Other permanent differences.................................................................... 12,805
Change in temporary differences................................................................ (50,772)
-----------------
Tax loss carry forward......................................................................... (10,944,910)
-----------------
Current tax payable............................................................................ 0
-----------------
-----------------

TEMPORARY DIFFERENCES AS OF DECEMBER 31, 1997
Furniture, fixture and equipment............................................................... 50,772
Tax loss carry forward......................................................................... (10,944,910)
-----------------
Net............................................................................................ (10,894,138)
-----------------
28% deferred tax asset......................................................................... 3,050,359
Valuation allowance............................................................................ (3,050,359)
-----------------
Deferred tax asset............................................................................. 0
-----------------
-----------------
</TABLE>

F-35
<PAGE>
OFFSHORE SHUTTLE AS
(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD FROM

NOVEMBER 29, 1996 (INCEPTION) TO DECEMBER 31, 1996
THE TWELVE MONTHS ENDED DECEMBER 31, 1997
AND THE SIX MONTHS ENDED JUNE 30, 1998

(INFORMATION AS OF JUNE 30, 1998 AND FOR THE
SIX MONTHS THEN ENDED IS UNAUDITED)

NOTE 7--INCOME TAX (CONTINUED)
The Company's tax loss carry forward expires in 2007.

NOTE 8--STOCK INCENTIVE PLAN

The Board is authorized to issue options to purchase 120,000 shares of stock
to employees and Board members and options to purchase 100,000 shares of stock
to cooperation partners. As of December 31, 1997, options to purchase 90,000
shares of stock have been issued to employees, Board members and cooperation
partners.

The exercise price for all options granted to date was equal to or in excess
of the fair market value of the Company's stock at the date of grant. The
exercise price for 80,000 and 10,000 options is NOK 12 and NOK 25, respectively.
Under the terms of the option agreements, the exercise price increases 1% per
month from the time of issuance until the date of exercise. The options may be
exercised during a three year period following the date of issuance.

See also Note 10.

NOTE 9--RELATED PARTIES TRANSACTIONS

RELATED PARTY TRANSACTIONS AND BALANCES INCLUDE:

CONSULTANCY AGREEMENT

The Company has entered into a consultancy agreement with Mr. Gunnar Foss, a
shareholder, Board member, Technical director and the inventor of the Shuttle.

The agreement stipulates that monthly remuneration shall be paid to Mr.
Gunnar Foss for consulting services provided to the Company. For the period
ended December 31, 1997, the Company paid NOK 630,000 in accordance with the
agreement. The agreement requires future minimum payments to Mr. Gunnar Foss of
NOK 65,000 per month for consulting services, if used, for 1998 and 1999. In
January 1998 the Board decided to increase Mr. Gunnar Foss' remuneration to NOK
80,000 per month. The board also decided that if the Company successfully sells
a license to build a Shuttle or builds a Shuttle itself, the amount of
remuneration payable under the agreement is subject to negotiation. According to
the agreement, Mr. Gunnar Foss shall have the right to terminate his engagement
with 6 months notice, whereas the Company shall have the right to terminate with
12 months notice. In the event that Mr. Gunnar Foss resigns following a change
in control of the Company which results in significant changes made to its
strategy he shall have the right to salary/remuneration for 12 months following
his resignation. The Consulting agreement transfers to Offshore Shuttle AS the
exclusive rights to the patents and all other intellectual property related to
the shuttle concept.

F-36
<PAGE>
OFFSHORE SHUTTLE AS
(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD FROM

NOVEMBER 29, 1996 (INCEPTION) TO DECEMBER 31, 1996
THE TWELVE MONTHS ENDED DECEMBER 31, 1997
AND THE SIX MONTHS ENDED JUNE 30, 1998

(INFORMATION AS OF JUNE 30, 1998 AND FOR THE
SIX MONTHS THEN ENDED IS UNAUDITED)

NOTE 9--RELATED PARTIES TRANSACTIONS (CONTINUED)
In 1998 the Company entered into a new agreement regarding Intellectual
Property. See Note 10.

In accordance with a decision made by the General Assembly in January 1997,
the Company paid NOK 650,000 to Mr. Gunnar Foss for costs incurred and services
provided to the Company prior to January 1997.

ENGAGEMENT AGREEMENT, MANAGING DIRECTOR

Mr. Per Bull Haugso/en is engaged as Managing Director for Offshore Shuttle
AS. He is also a shareholder in the Company. The Managing Director has an
engagement agreement based on normal employment terms in Norway. In 1997 his
remuneration was NOK 609.000 with addition of certain welfare benefits. In
January 1998 the annual salary was increased to NOK 900,000 with retroactive
effect from September 1, 1997. The agreement states that Mr. Per Bull Haugso/en
shall have the right to terminate his engagement with 6 month's notice, whereas
the Company shall have the right to terminate with 12 month's notice. In the
event that Mr. Per Bull Haugso/en resigns following a change in control of the
Company which results in significant changes made to its strategy, he shall have
the right to salary/remuneration for 12 months following his resignation.

The engagement agreement shall be renegotiated in the case the Company sells
a license or enter into a contract to build the shuttle itself. See Note 10.

AGREEMENT WITH A SHIP BROKERING COMPANY

Offshore Shuttle AS has entered into an agreement with P.F. Basso/e & Co., a
specialized ship brokering and consultancy company. Halvor Sveen, an employee of
P.F. Basso/e & Co., is a member of the Board of Directors of Offshore Shuttle
AS.

P.F. Basso/e shall render services in connection with contract and
negotiations with yards regarding fabrication of the Offshore Shuttle. As
compensation P.F. Basso/e shall be entitled to a commission of one percent of
the contract price stipulated in a fabrication contract between Offshore Shuttle
AS and a ship yard. Any payment or commission for services rendered in
connection with the conclusion of other contracts shall be agreed separately.

NOTE 10--SUBSEQUENT EVENTS

AGREEMENT REGARDING INTELLECTUAL PROPERTY

On March 31, 1998, the Company entered into an agreement with Mr. Gunnar
Foss and Mr. Per Bull Haugso/en regarding the intellectual property rights
relating to the Offshore Shuttle concept.

The agreement provides for the exclusive transfer of the patent rights and
all other intellectual property rights relating to the Offshore Shuttle Concept
to Offshore Shuttle AS.

F-37
<PAGE>
OFFSHORE SHUTTLE AS
(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD FROM

NOVEMBER 29, 1996 (INCEPTION) TO DECEMBER 31, 1996
THE TWELVE MONTHS ENDED DECEMBER 31, 1997
AND THE SIX MONTHS ENDED JUNE 30, 1998

(INFORMATION AS OF JUNE 30, 1998 AND FOR THE
SIX MONTHS THEN ENDED IS UNAUDITED)

NOTE 10--SUBSEQUENT EVENTS (CONTINUED)
The transfer of the rights is subject to the condition that the Offshore
Shuttle Concept be further developed and exploited by the Company. According to
the agreement, the execution of the Head Licence Agreement described in the next
paragraph shall be deemed to constitute such further development and
exploitation.

If Offshore Shuttle AS for any reason whatsoever should cease to continue in
an active manner its activities related to the concept, Mr. Gunnar Foss and Mr.
Per Bull Haugso/en can request that the patent and all other rights concerning
the concept be transferred back to them against certain compensation.

In the event that Offshore Shuttle AS wishes to transfer the rights to a
third party, Mr. Gunnar Foss and Mr. Per Bull Haugso/en shall have the right of
first refusal with respect to such transfer. It is agreed that the Head License
Agreement (see below) shall not be deemed to constitute such transfer.

HEAD LICENSE AGREEMENT

The Company entered into a Head License Agreement with Marine Shuttle
Operations AS on March 31, 1998. Pursuant to the Head License Agreement,
Offshore Shuttle AS granted Marine Shuttle Operations AS the exclusive right to
build and operate five offshore shuttles, an exclusive option to build and
operate two additional offshore shuttles thereafter, and a right of first
refusal with respect to any offshore shuttle licenses that Offshore Shuttle AS
may seek to grant during a specified future period.

Based on functional specifications for each offshore shuttle to be agreed
upon, Offshore Shuttle AS shall provide Marine Shuttle Operations AS with the
pre-engineering work, including designs and descriptions of operational
procedures, necessary to construct the Offshore Shuttles. In addition, Offshore
Shuttle AS will provide other technical services, in excess of pre-engineering,
in connection with the development, building and operation of the Offshore
Shuttles.

In consideration for the Head License Agreement granted and pre-engineering
services to be provided, Offshore Schuttle AS shall receive a construction fee
equal to ten percent of the construction price of each of the offshore shuttles,
an operating fee equal to sixteen percent of the gross profit for each contract
finalized by Marine Shuttle Operations AS involving the use of an offshore
shuttle, and an exclusivity fee equal to one percent of the aggregate
construction price of offshore shuttles two through five. Other services
rendered by Offshore Shuttle AS will be invoiced to Marine Shuttle Operations AS
on fair market terms.

The parties have agreed that yard orders for each of the five offshore
shuttles shall be placed in spesific order years in the period between 1998
through year 2003. In each such order year the order shall be placed within a
defined order expiry date.

The first order shall be placed within December 31, 1998.

F-38
<PAGE>
OFFSHORE SHUTTLE AS
(A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD FROM

NOVEMBER 29, 1996 (INCEPTION) TO DECEMBER 31, 1996
THE TWELVE MONTHS ENDED DECEMBER 31, 1997
AND THE SIX MONTHS ENDED JUNE 30, 1998

(INFORMATION AS OF JUNE 30, 1998 AND FOR THE
SIX MONTHS THEN ENDED IS UNAUDITED)

NOTE 10--SUBSEQUENT EVENTS (CONTINUED)
In the absence of an order within an order expiry date, Offshore Shuttle AS
will have the right in each such case to market and sell a licence for one
shuttle to any third party during the subsequent 12 month period.

If Marine Shuttle Operations AS fails to meet an order expiry date it will
have the right to extend the order expiry date for a period of up to twelve
months by paying USD 900,000 in each case.

The binding nature of the Head License Agreement is conditional upon
Offshore Shuttle AS having received payment from Marine Shuttle Operations AS of
the first instalment of the exclusivity fee of USD 2,000,000 by November 30,
1998, and Marine Shuttle Operations AS having placed a firm order for offshore
shuttle number one with a construction yard by December 31, 1998.

Marine Shuttle Operations AS and Offshore Shuttle AS are subsidiaries of
Marine Shuttle Operations, Inc..

LEASE AGREEMENT

In March 1998, Offshore Shuttle AS entered into a lease for new office
space. The agreement lasts for three years from May 1, 1998 with a yearly lease
of NOK 652,800 adjusted for the increase in the consumer price index.

STOCK INCENTIVE PLAN

After year end, options to purchase 20,000 and 10,000 shares of stock have
been granted, with an exercise price of NOK 39 and NOK 32, respectively. The
exercise price increases 1% per month from the time of issuance until the date
of exercise. The options may be exercised during a three-year period following
the date of issuance.

F-39
<PAGE>
SELECTED UNAUDITED PRO FORMA CONSOLIDATED
FINANCIAL INFORMATION

The selected unaudited pro forma consolidated financial information for the
Company set forth below gives effect to the acquisition of the shares of Marine
Shuttle Operation AS (MSO AS) and Offshore Shuttle AS (OSAS). The historical
financial information set forth below has been derived from and is qualified by
reference to, the financial statements of the Company, MSO AS and OSAS and
should be read in conjunction with those financial statements and the notes
thereto included elsewhere herein.

The June 30, 1998 pro forma balance sheet has been prepared as if the
transactions described in Notes 2 and 3 had occurred on June 30, 1998, and
represents the consolidation of the June 30, 1998 balance sheet of OSAS with the
June 30, 1998 consolidated balance sheet of the Company.

The pro forma statement of net loss for the six month period ended June 30,
1998 and the period ended December 31, 1997 has been prepared as if the
transactions described in Notes 1, 2, and 3 had occurred on May 23, 1997. They
represent the consolidation of the MSO AS and OSAS statements of loss for the
six months ended June 30, 1998 with the statement of loss of the Company for the
six months ended June 30, 1998, and the consolidation of the MSO AS and OSAS
statements of loss for the period ended December 31, 1997 with the statement of
loss of the Company for the period ended December 31, 1997.

The pro forma consolidated financial statements are not intended to reflect
the results of operations or the financial position of the Company which would
have actually resulted had the proposed transactions described in Notes 1, 2,
and 3 been effected on the dates indicated. Further, the pro forma financial
information is not necessarily indicative of the results of operations or the
financial position that may be obtained in the future.

F-40
<PAGE>
MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

JUNE 30, 1998

(IN UNITED STATES DOLLARS)

<TABLE>
<CAPTION>
ACQUISITION OF
MARINE PRO FORMA OFFSHORE SHUTTLE AS
SHUTTLE AFTER ---------------------
OPERATIONS CAPITAL CAPITAL JUNE 30, PRO FORMA
INC. TRANSACTION TRANSACTION 1998 ACQUISITION CONSOLIDATED
-------------- ----------- ----------- --------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
(NOTE 2) (NOTE 3)
ASSETS

CURRENT
Cash................................. $ 410,643 $100,000,000) $99,144,862 $1,750,065 $ -- 1$00,894,927
(1,265,781
Other current assets................. -- -- -- 187,213 -- 187,213
CAPITAL ASSETS, net.................... 221,103 -- 221,103 111,363 -- 332,466
GOODWILL AND
OTHER INTANGIBLES.................... 22,696,272 (299,936) 22,396,336 -- 16,404,589 38,800,925
-------------- ----------- ----------- --------- ---------- ------------
$ 23,328,018 $98,434,283 $121,762,301 $2,048,641 $16,404,589 1$40,215,531
-------------- ----------- ----------- --------- ---------- ------------
-------------- ----------- ----------- --------- ---------- ------------
LIABILITIES

CURRENT
Accounts payable and accrued
liabilities........................ $ 370,616 $ -- $ 370,616 $ 221,521 $ -- $ 592,137
Notes payable........................ 1,265,781 (1,265,781) -- -- -- --
Non-controlling interest............. -- -- -- -- 328,882 328,882
-------------- ----------- ----------- --------- ---------- ------------
1,636,397 (1,265,781) 370,616 221,521 328,882 921,019
-------------- ----------- ----------- --------- ---------- ------------
SHAREHOLDERS' EQUITY (DEFICIENCY)
Share capital.......................... 27,620 20,000 47,620 31,506 (31,506) 53,587
5,967
Restricted reserve..................... -- -- -- 736,780 (736,780) --
Additional paid in capital............. 22,926,380 99,980,000 122,906,380 3,231,022 (3,231,022) 140,803,240
17,896,860
Cumulative foreign exchange
adjustment........................... (39,802) -- (39,802) -- (39,802)
Deficit................................ (1,222,577) (299,936) (1,522,513) (2,172,188) 2,172,188 (1,522,513)
-------------- ----------- ----------- --------- ---------- ------------
21,691,621 99,700,064 121,391,685 1,827,120 16,075,707 139,294,512
-------------- ----------- ----------- --------- ---------- ------------
$ 23,328,018 $98,434,283 $121,762,301 $2,048,641 $16,404,589 1$40,215,531
-------------- ----------- ----------- --------- ---------- ------------
-------------- ----------- ----------- --------- ---------- ------------
</TABLE>

F-41
<PAGE>

MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF LOSS

SIX MONTHS ENDED JUNE 30, 1998

(IN UNITED STATES DOLLARS)

<TABLE>
<CAPTION>
ACQUISITION OF
MARINE PRO FORMA OFFSHORE SHUTTLE AS
SHUTTLE AFTER ----------------------
OPERATIONS CAPITAL JUNE 30, PRO FORMA
INC. TRANSACTION 1998 CONSOLIDATED
-------------- ACQUISITION CAPITAL ----------- --------- ------------
OF TRANSACTION
MSO AS -----------
----------- ACQUISITION
(NOTE 1) (NOTE 2) -----------
(NOTE 3)
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUE........................ $ -- $ -- $ -- $ -- $ 13,292 $ -- $ 13,292
-------------- ----------- ----------- ----------- --------- ----------- ------------
EXPENSES
Accounting and audit......... 61,751 -- -- 61,751 13,717 -- 75,468
Bank charges................. 937 -- -- 937 -- -- 937
Consulting................... 125,096 71,082 -- 196,178 49,254 -- 245,432
Depreciation and
amortization............... 418,268 836,535 -- 1,254,803 10,849 820,000 2,085,652
Interest..................... 15,781 -- (15,781) -- -- -- --
Legal........................ 99,546 68,540 -- 168,086 63,249 -- 231,335
Listing and filing fees...... 3,989 -- -- 3,989 -- -- 3,989
Interest and foreign
exchange................... (13,866) -- -- (13,866) (47,600) -- (61,466)
Office and printing.......... 111,452 5,441 -- 116,893 81,323 -- 198,217
Research and development..... -- -- -- -- 580,572 -- 580,572
Salaries..................... 47,451 -- -- 47,451 168,275 -- 215,726
Telephone.................... 3,699 -- -- 3,699 -- -- 3,699
Transfer agent fees.......... 8,695 -- -- 8,695 -- -- 8,695
Travel....................... 84,847 964 -- 85,811 65,349 -- 151,160
Write-down of investment..... 90,000 -- -- 90,000 -- -- 90,000
-------------- ----------- ----------- ----------- --------- ----------- ------------
1,057,646 982,562 15,781 2,024,427 984,988 820,000 3,829,416
-------------- ----------- ----------- ----------- --------- ----------- ------------
Loss before undernoted .... $ (1,057,646) $(982,562) $ (15,781) ($2,024,427) $(971,696) $(820,000) $(3,816,124)
-------------- ----------- ----------- ----------- --------- ----------- ------------
-------------- ----------- ----------- ----------- --------- ----------- ------------
Non-controlling interest....... -- -- -- -- 174,000 -- 174,000
-------------- ----------- ----------- ----------- --------- ----------- ------------
Net loss for the period........ $ (1,057,646) $(982,562) $ (15,781) ($2,024,427) $(796,796) $(820,000) $(3,641,224)
-------------- ----------- ----------- ----------- --------- ----------- ------------
-------------- ----------- ----------- ----------- --------- ----------- ------------
Loss per share................. $ (0.04) $ (0.04) $ (0.07)
-------------- ----------- ------------
-------------- ----------- ------------
Weighted average common stock
outstanding.................. 27,620,000 47,620,000 53,767,000
-------------- ----------- ------------
-------------- ----------- ------------
</TABLE>

F-42
<PAGE>
MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF LOSS

PERIOD ENDED DECEMBER 31, 1997

(IN UNITED STATES DOLLARS)

<TABLE>
<CAPTION>
ACQUISITION OF
MARINE OFFSHORE SHUTTLE AS
SHUTTLE MARINE MSO AS PRO FORMA --------------------------
OPERATIONS SHUTTLE GOODWILL AFTER MSO AS DECEMBER 31,
INC. OPERATIONS AS AMORTIZATION ACQUISITION 1997 ACQUISITION
-------------- --------------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
(NOTE 1) (NOTE 3)
REVENUE........................... $ -- $ -- $ -- $ -- $ 56,940 $ --
-------------- ----- ------------ ------------- ------------ ------------
EXPENSES
Accounting and audit............ 15,511 -- -- 15,511 10,954 --
Bank charges.................... 300 -- -- 300 -- --
Consulting...................... 30,000 -- -- 30,000 100,053 --
Depreciation and
amortization.................. -- -- 2,509,606 2,509,606 12,569 1,640,000
Management fees................. 40,000 -- -- 40,000 -- --
Interest income................. -- -- -- -- (44,474) --
Legal........................... 26,917 -- -- 26,917 38,429 --
Listing and filing fees......... 31,000 -- -- 31,000 -- --
Office and printing............. 8,674 24 -- 8,698 134,724 --
Research and development........ -- -- -- -- 797,818 --
Salaries........................ -- -- -- -- 220,168 --
Telephone....................... 2,347 -- -- 2,347 -- --
Transfer agent fees............. 2,018 -- -- 2,018 -- --
Travel.......................... 8,164 -- -- 8,164 117,208 --
-------------- ----- ------------ ------------- ------------ ------------
164,931 24 2,509,606 2,674,561 1,387,449 1,640,000
-------------- ----- ------------ ------------- ------------ ------------
Loss before undernoted............ $ (164,931) $ (24) $ (2,509,606) $(2,674,561) $(1,330,509) $ (1,640,000)
-------------- ----- ------------ ------------- ------------ ------------
-------------- ----- ------------ ------------- ------------ ------------
Non-controlling interest.......... -- -- -- -- 240,000 --
-------------- ----- ------------ ------------- ------------ ------------
Net loss for the period........... $ (164,931) $ (24) $ (2,509,606) $(2,674,561) $(1,090,509) $ (1,640,000)
-------------- ----- ------------ ------------- ------------ ------------
-------------- ----- ------------ ------------- ------------ ------------
Loss per share.................... $ (0.01) $ (0.06)
-------------- -------------
-------------- -------------
Weighted average common shares
outstanding..................... 25,811,892 47,620,000
-------------- -------------
-------------- -------------

PRO FORMA
CONSOLIDATED
------------
<S> <C>

REVENUE........................... $ 56,940
------------
EXPENSES
Accounting and audit............ 26,465
Bank charges.................... 300
Consulting...................... 130,053
Depreciation and
amortization.................. 4,162,175
Management fees................. 40,000
Interest income................. (44,474)
Legal........................... 65,346
Listing and filing fees......... 31,000
Office and printing............. 143,422
Research and development........ 797,818
Salaries........................ 220,168
Telephone....................... 2,347
Transfer agent fees............. 2,018
Travel.......................... 125,372
------------
5,702,010
------------
Loss before undernoted............ $ (5,645,070)
------------
------------
Non-controlling interest.......... 240,000
------------
Net loss for the period........... $ (5,405,070)
------------
------------
Loss per share.................... $ (0.10)
------------
------------
Weighted average common shares
outstanding..................... 53,767,000
------------
------------
</TABLE>

F-43
<PAGE>
MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
(A NEVADA CORPORATION)

NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

(U.S. DOLLARS)

1. ACQUISITION OF MARINE SHUTTLE OPERATIONS AS

On April 14, 1998, the Company acquired 100% of the issued and outstanding
stock of MSO AS in exchange for 7,600,000 common shares of the Company.

The acquisition has been accounted for using the purchase method. The shares
of the Company's common stock that were issued have been recorded at a deemed
value of $3.00 based on the estimated fair market value of the MSO AS net assets
acquired.

The excess of the purchase price over the fair value of the net assets
acquired has been allocated to goodwill ($20,533,144) and other intangibles
represented by marketing, engineering and waste management agreements
($2,281,460) and is being amortized on a straight-line basis over 10 years and 5
years, respectively.

As the acquisition of MSO AS occurred prior to June 30, 1998 and is
reflected in the historical balance sheet of the Company, there is no pro forma
effect on the balance sheet at June 30, 1998.

The effect of the MSO AS acquisition on the unaudited pro forma consolidated
statement of loss is summarized below:

<TABLE>
<CAPTION>
PERIOD ENDED
------------------------
<S> <C> <C>
JUNE 30, DECEMBER 31,
1998 1997
---------- ------------
Operating expenses.............................................. $ 146,027 $ 24
Amortization of goodwill and intangibles........................ 836,535 2,509,606
---------- ------------
$ 982,562 $2,509,630
---------- ------------
---------- ------------
</TABLE>

2. CAPITAL TRANSACTION

The pro forma balance sheet reflects the public offering of 20,000,000
shares of common stock for net proceeds, estimated at a minimum of $100,000,000.
For purposes of the preparation of the pro forma balance sheet, the proceeds of
the offering have been estimated based on the market price of the common stock
at June 30, 1998.

F-44
<PAGE>
MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
(A NEVADA CORPORATION)

NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

(U.S. DOLLARS)

2. CAPITAL TRANSACTION (CONTINUED)

The pro forma financial statements reflect the following adjustments related
to the public offering and related transactions:

<TABLE>
<S> <C>
Balance Sheet
Net proceeds from offering.................................. $100,000,000
Repayment of notes payables, including accrued interest
of $15,781................................................ 1,265,781
-----------
Increase in cash.............................................. $98,734,219
-----------
-----------
Charging to deficit deferred share issue costs at June 30,
1998........................................................ $ 299,936
-----------
-----------
Increase in stockholders' equity
Share capital............................................... $ 20,000
Additional paid-in capital.................................. 99,980,000
-----------
$100,000,000
-----------
-----------
Statement of loss
Reduction of interest on note payable to
June 30, 1998............................................. $ 15,781
December 31, 1997......................................... --
</TABLE>

3. ACQUISITION OF OFFSHORE SHUTTLE AS

In May 1998, the Company acquired 3,291,738 shares of OSAS (approximately
68% of the outstanding OSAS capital stock) in exchange for 4,937,607 shares of
the Company's common stock. All of such shares are being held in escrow subject
to completion of a financing of at least $105,000,000 in gross proceeds. On May
20, 1998, the Company entered into two agreements to acquire an additional
686,668 shares of OSAS (approximately 14% of the outstanding OSAS capital stock)
in exchange for 1,030,002 shares of the Company's common stock (the "Additional
OSAS Exchanges"). The consummation of the Additional OSAS Exchanges is subject
to certain conditions precedent.

The acquisition has been accounted for using the purchase method. The shares
of the Company's common stock that have been issued and are to be issued, as the
case may be, have been recorded at a deemed value of $3.00 per share based on
the estimated fair value of the net assets acquired from OSAS.

The excess of the purchase price over the fair value of the net assets
acquired has been allocated to goodwill and identified intangibles and is being
amortized on a straight-line basis over 10 years.

F-45
<PAGE>
MARINE SHUTTLE OPERATIONS INC.
(FORMERLY GEOTECK INTERNATIONAL, INC.)
(A NEVADA CORPORATION)

NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

(U.S. DOLLARS)

3. ACQUISITION OF OFFSHORE SHUTTLE AS (CONTINUED)

The effect of the OSAS acquisition on the unaudited pro forma consolidated
balance sheet at June 30, 1998 is summarized below:

<TABLE>
<S> <C>
Purchase price
Issue of common stock........................................ $17,902,827
----------
----------
Allocation of purchase price
Net working capital.......................................... $1,715,757
Capital assets............................................... 111,363
Goodwill..................................................... 16,404,589
----------
18,231,709
Non-controlling interest, representing 18% of the net tangible
assets of OSAS............................................... (328,882)
----------
$17,902,827
----------
----------
Elimination of OSAS
Share capital................................................ $ 31,506
Restricted reserve........................................... 736,780
Additional paid-in capital................................... 3,231,022
Deficit...................................................... (2,172,188)
</TABLE>

The effect of the OSAS acquisition on the unaudited pro forma consolidated
statements of loss is summarized below:

<TABLE>
<CAPTION>
PERIOD ENDED
--------------------------
<S> <C> <C>
JUNE 30, DECEMBER 31,
1998 1997
------------ ------------
Revenue....................................................... $ (13,292) $ (56,940)
Operating expenses............................................ 984,988 1,387,449
Amortization of goodwill...................................... 787,341 1,574,683
------------ ------------
$ 1,759,037 $2,905,192
------------ ------------
------------ ------------
</TABLE>

4. EARNINGS (LOSS) PER SHARE

Pursuant to accounting practices prescribed by the United States Securities
and Exchange Commission, common shares issued by the Company during the twelve
month period immediately preceding the filing of an initial public offering have
been included in the calculation of pro forma loss per common share as if they
were outstanding for all periods presented.

F-46
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO UNDERWRITER, DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED
IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY
UNDERWRITER. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE
HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY ANY SECURITIES OFFERED HEREBY BY ANYONE IN ANY JURISDICTION
IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON
MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM
IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Prospectus Summary............................. 3
Risk Factors................................... 6
Use of Proceeds................................ 17
Dividend Policy................................ 18
Capitalization................................. 18
Dilution....................................... 19
Price Range of Common Stock.................... 20
Selected Consolidated Financial Data........... 20
Management's Discussion and Analysis of
Financial Condition and Results of
Operations................................... 21
Business....................................... 24
Management..................................... 35
Principal Stockholders......................... 38
Selling Stockholders and Plan of
Distribution................................. 39
Certain Transactions........................... 44
Description of Securities...................... 46
Taxation....................................... 48
Shares Eligible for Future Sale................ 52
Underwriting................................... 53
Legal Matters.................................. 54
Experts........................................ 54
Additional Information......................... 54
Index to Financial Statements.................. F-1
</TABLE>

------------------------

UNTIL , 1998 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATIONS OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

MARINE SHUTTLE OPERATIONS INC.

33,567,609 SHARES OF COMMON STOCK

---------------------

PROSPECTUS

---------------------

BERLINER EFFEKTENBANK AG

, 1998

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
ALTERNATE PAGE
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED OCTOBER 14, 1998

MARINE SHUTTLE OPERATIONS INC.

SALES PROSPECTUS

FOR

20,000,000 SHARES OF COMMON STOCK OFFERED BY THE COMPANY

AND

13,567,609 SHARES OF COMMON STOCK WHICH MAY BE OFFERED IN THE

FUTURE BY CERTAIN SELLING STOCKHOLDERS

SECURITIES NO. 912836

The Shares offered by the Company are registered by book-entry only

------------------------

THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK AND IMMEDIATE
AND SUBSTANTIAL DILUTION. SEE "RISK FACTORS"
COMMENCING ON PAGE AND
"DILUTION."

------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION OR ANY U.S. STATE SECURITIES COMMISSION
NOR HAS THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR ANY
U.S. STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE IN THE UNITED STATES.

------------------------

<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO
PRICE TO PUBLIC DISCOUNT COMPANY(1)
<S> <C> <C> <C>
Per Share................................................ $ $ $
Total.................................................... $ $ $
</TABLE>

(1) Before deducting estimated expenses of $800,000 payable by the Company.
<PAGE>
ALTERNATE PAGE

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
General Information........................................................................................ 4
Prospectus Summary......................................................................................... 7
Risk Factors............................................................................................... 10
Use of Proceeds............................................................................................ 21
Dividend Policy............................................................................................ 22
Capitalization............................................................................................. 22
Dilution................................................................................................... 23
Price Range of Common Stock................................................................................ 24
Selected Consolidated Financial Data....................................................................... 24
Management's Discussion and Analysis of Financial Condition and Results of Operations...................... 25
Business................................................................................................... 28
Management................................................................................................. 39
Principal Stockholders..................................................................................... 42
Selling Stockholders and Plan of Distribution.............................................................. 43
Certain Transactions....................................................................................... 48
Description of Securities.................................................................................. 50
Taxation................................................................................................... 52
Shares Eligible for Future Sale............................................................................ 56
Underwriting............................................................................................... 57
Legal Matters.............................................................................................. 58
Experts.................................................................................................... 58
Additional Information..................................................................................... 58
Index to Financial Statements.............................................................................. F-1
</TABLE>

3
<PAGE>
GENERAL INFORMATION

RESPONSIBILITY FOR CONTENTS OF PROSPECTUS

Marine Shuttle Operations Inc., a Nevada corporation (the "Company"), and
Berliner Effektenbank AG (the "Underwriter") assume liability for the contents
of this Prospectus pursuant to the German Sales Prospectus Act and Section 45 of
the German Stock Exchange Act and hereby state that to their knowledge the
information contained in this Prospectus is accurate and that no material
circumstances have been omitted. This Prospectus has been deposited in this form
with the Federal Supervisory Board for Securities Trading of the Federal
Republic of Germany.

INSPECTION OF DOCUMENTS

All documents cited in this Prospectus relating to the incorporation of the
Company and the issuance of the shares (as well as the documents mentioned in
this Prospectus to the extent they relate to the Company), may be inspected in
the offices of the Company at 4410 Montrose Boulevard, Houston, Texas 77006,
USA, as well as at the offices of Berliner Effektenbank AG, Kurfurstendamm 119,
10711 Berlin.

SUBJECT OF PROSPECTUS

This Prospectus relates to the Company's offering (the "Offering") of
20,000,000 shares (the "Shares") of the Company's common stock, $0.001 par value
per share (the "Common Stock"). This Prospectus also relates to the offering of
13,567,609 shares of Common Stock (the "Selling Stockholder Shares") that may be
offered by certain selling stockholders of the Company (the "Selling
Stockholders"). The Company will not receive any proceeds from the sale of the
Selling Stockholder Shares by the Selling Stockholders. Purchasers of the shares
of Common Stock will be entitled to those dividends declared by the Board of
Directors in 1998 out of legally available funds. The Company has never declared
or paid dividends, and does not intend to pay any dividends in the foreseeable
future on shares of Common Stock.

SALES OFFER

20,000,000 shares of Common Stock are offered by the Underwriter, as agent
for the Company, at a price of $ per share, on a "best efforts, all or
none" basis, for a period of 30 days from the effective date the registration
statement of which this Prospectus forms a part (the "Registration Statement").
The offering period may be extended for an additional 30 days by the mutual
agreement of the Company and the Underwriter, and an additional five days may be
added solely for purposes of allowing checks to clear. All funds received by the
Underwriter will be deposited no later than noon on the next business day
following their receipt by the Underwriter in a separate account, to be held by
the Underwriter as agent for the subscribers of the Shares. If no closing takes
place during the offering period (or any extension thereof), then all funds
promptly will be returned to the subscribers thereof without any deduction
therefrom or interest thereon.

USE OF PROCEEDS

The net proceeds to the Company from the sale of the Shares, after deduction
of underwriting discounts ($ ) and other estimated offering expenses
($800,000), are estimated to be approximately $ . The Company intends to
utilize such net proceeds for the construction of the first Offshore Shuttle,
the payment of license fees, the repayment of outstanding indebtedness, and
working capital and general corporate purposes.

CERTIFICATES AND DELIVERY

At the closing of the Offering, the Depository Trust Company ("DTC") will
electronically deposit the Shares in the account of Deutsche Borse Clearing AG
("DBC") for the benefit of the Underwriter.

4
<PAGE>
Thereafter, the Underwriter will electronically transfer beneficial ownership of
the Shares to the purchasers thereof (through their brokers or other financial
institutions that are DBC participants). DBC will not hold actual shares of
Common Stock, but will hold beneficial interests therein through its account
with DTC. DTC, or its nominee, will be the registered owner of all shares of
Common Stock that are held by purchasers through DBC. Certificates representing
shares of Common Stock held through DBC will not be issued unless such shares
are withdrawn from DBC, in which case the shares will not be eligible to trade
on the Bulletin Boards of the various German stock exchanges unless such shares
are redeposited with DTC for credit to DBC's account.

STOCK EXCHANGE ADMISSION AND PAYMENT DATE

The Common Stock currently is quoted on the OTC Bulletin Board under the
symbol "ZSUB", and is quoted under the Securities No. 912836 on the Bulletin
Boards of the Berlin Stock Exchange, the Hamburg Stock Exchange, the Dusseldorf
Stock Exchange, and the Munich Stock Exchange. On October 13, 1998, the last
reported sale price of the Common Stock on the OTC Bulletin Board was $4.03125
per share. It is anticipated that application will be made to include the Common
Stock for listing on the Bulletin Board of the Frankfurt Stock Exchange.

INDEMNIFICATION

The Company has agreed to indemnify the Underwriter against certain
liabilities. See "Underwriting."

INVESTMENTS

The Company intends to spend approximately $80,000,000 for construction of
the first Offshore Shuttle, approximately $8,000,000 of which is anticipated to
be expended in 1998.

BUSINESS STRATEGY AND OUTLOOK

There are now more than 6,500 offshore oil and gas installations worldwide
located on the continental shelf of approximately 53 countries. Over the next 30
years, most of these structures will have to be decommissioned at an estimated
cost of $20 to $40 billion. Offshore Shuttle AS ("OSAS"), a majority-owned
Norwegian subsidiary of the Company, has designed a new generation of vessel
(the "Offshore Shuttle") which it believes will be capable of lifting and
carrying most of the largest installations without extensive cutting or
dismantling. MSOAS has entered into a license agreement with OSAS which gives
MSOAS the exclusive right to build and operate five Offshore Shuttles, and an
exclusive option to build and operate an additional two Offshore Shuttles
thereafter.

5
<PAGE>
each commercial operation, including all pre-engineering work, will take up to
one year to complete, with the offshore portion calculated on average to be four
weeks.

6
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Nevada General Corporation Law (the "GCL") authorizes Nevada
corporations to indemnify any person who was or is a party to any proceeding
(other than an action by, or in the right of, the corporation), by reason of the
fact that he or she is or was a director, officer, employee, or agent of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation or other entity,
against liability incurred in connection with such proceeding, including any
appeal thereof, if he or she acted in good faith and in a manner he or she
reasonably believed to be in, or not opposed to, the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. In the case of an
action by or on behalf of a corporation, indemnification may not be made if the
person seeking indemnification is adjudged liable, unless the court in which
such action was brought determines such person is fairly and reasonably entitled
to indemnification. The indemnification provisions of the GCL require
indemnification if a director or officer has been successful on the merits or
otherwise in defense of any action, suit, or proceeding to which he or she was a
party by reason of the fact that he or she is or was a director or officer of
the corporation. The indemnification authorized under the GCL is not exclusive
and is in addition to any other rights granted to officers and directors under
the Articles of Incorporation or By-Laws of a corporation or any agreement
between officers and directors and the corporation. A corporation may purchase
and maintain insurance or furnish similar protection on behalf of any officer or
director against any liability asserted against the officer or director and
incurred by the officer or director in such capacity, or arising out of the
status of officer or director of the corporation, whether or not the corporation
would have the power to indemnify him or her against such liability under the
GCL.

The Registrant's Articles of Incorporation: (i) eliminates the personal
liability of the directors of the Registrant to the fullest extent permitted by
the GCL and (ii) provides that the Registrant shall indemnify, to the fullest
extent permitted by the GCL, any and all persons whom it shall have the power to
indemnify under the GCL from all expenses, liabilities, or other matters
referred to in or covered by the GCL. The By-Laws of the Registrant provide that
the Registrant shall have the power to indemnify any person who was or is a
party or is threatened to be made a party to any proceeding (other than an
action by or in the right of the Registrant to procure a judgment in its favor)
by reason of the fact that such person is or was an agent of the Registrant,
against expenses, judgments, fines, settlements, and other amounts actually and
reasonably incurred in connection with such proceeding to the fullest extent
permitted under the GCL.

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The estimated expenses of the Registrant in connection with the issuance and
distribution of the securities being registered hereby (other than underwriting
discounts and commissions) are as follows:

<TABLE>
<S> <C>
Registration Fee (Securities and Exchange Commission)............................. $ 62,509
NASDAQ Listing Fee................................................................ $ 10,000
Frankfurt Stock Exchange Listing Fee.............................................. $ 1,000
Printing and Engraving Expenses................................................... $ 100,000
Accounting Fees and Expenses...................................................... $ 150,000
Legal Fees and Expenses........................................................... $ 350,000
Transfer Agent's Fees............................................................. $ 2,500
Miscellaneous Expenses............................................................ $ 123,991
---------
Total......................................................................... $ 800,000
</TABLE>

II-1
<PAGE>
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

Since its inception, the Registrant has made the following issuances of
securities, none of which were registered under the Securities Act of 1933, as
amended (the "Securities Act").

On or about June 6, 1997, the Registrant's four founders, all of whom are
foreign residents, contributed an aggregate of $10,000 to the Company in
exchange for an aggregate of 10,000,000 shares of common stock pursuant to Rule
504 promulgated under the Securities Act ("Rule 504").

On June 15, 1997, the Registrant sold an aggregate of 10,000,000 shares of
common stock to various foreign investors for an aggregate purchase price of
$100,000 pursuant to Rule 504.

On August 8, 1997, the Registrant sold an aggregate of 20,000 shares of
common stock to various foreign investors for an aggregate purchase price of
$60,000 pursuant to Rule 504.

On April 14, 1998, the Registrant issued 7,600,000 shares of common stock
pursuant to Regulation S promulgated under the Securities Act ("Regulation S")
in exchange for all of the issued and outstanding shares of capital stock of
Marine Shuttle Operations AS.

In May, 1998, the Registrant acquired 3,291,738 shares of Offshore Shuttle
AS ("OSAS") in exchange for 4,937,607 shares of common stock pursuant to
Regulation S. All of such shares are being held in escrow subject to completion
of the offering.

On May 20, 1998, the Registrant entered into two agreements to acquire an
additional 686,668 shares of OSAS in exchange for 1,030,002 shares of common
stock pursuant to Regulation S. Subject to the satisfaction of certain
conditions precedent, the Registrant anticipates that the exchange will close
soon after the completion of the offering.

ITEM 16. EXHIBITS.

<TABLE>
<CAPTION>
EXHIBIT # DOCUMENT
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>

1.1 Form of Amended Underwriting Agreement**

1.2 Form of Selected Dealers Agreement**

2.1 Stock Purchase Agreement, dated February 19, 1998, between the Registrant and Franz Eder*

2.2 Agreement Regarding Exchange of Shares between the Registrant, SPAX Holding AS, et. al.*

2.3 Form of Agreement Regarding Exchange of Shares between the Registrant and various stockholders of
Offshore Shuttle AS (including schedule of omitted documents pursuant to Item 601(a) of Regulation
S-K)*

2.4 Escrow Agreement, dated May 5, 1998, between the Registrant, various stockholders of Offshore Shuttle
AS, and Glad Arn Meyer & Co., as escrow agent*, amended as of September 2, 1998 and as of September
28, 1998**

2.5 Stock Exchange Agreement, dated May 20, 1998, between the Registrant and G. Foss Beheer B.V.*

2.6 Stock Exchange Agreement, dated May 20, 1998, between the Registrant and Per Bull Haugsen*

3.1 Articles of Incorporation of the Registrant, as amended*

3.2 Amended and Restated By-laws of the Registrant*

4.1 Form of Common Stock Certificate*
</TABLE>

II-2
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT # DOCUMENT
- ----------- -----------------------------------------------------------------------------------------------------
<C> <S>
5. Opinion of counsel to the Registrant concerning the legality of the securities being offered**

10.1 Head License Agreement between Marine Shuttle Operations AS and Offshore Shuttle AS dated March 31,
1998*, amended as of September 1, 1998**

10.2 Co-operation Agreement between Marine Shuttle Operations AS and Schuller Industrieentsorgung AG*

10.3 Personnel Services Contract between RC Consultants AS and Marine Shuttle Operations AS dated February
26, 1998*

10.4 Accounting Services Contract between RC Consultants AS and Marine Shuttle Operations AS dated
February 26, 1998*

10.5 Loan Agreement, dated as of March 12, 1998, between the Registrant and ValorInvest, Ltd.* (including
promissory note dated March 12, 1998**), as amended on August 27, 1998 and September 24, 1998
(including promissory notes dated August 27, 1998 and September 24, 1998)**

10.6 Marketing Agreement between Marine Shuttle Operations AS and Thyssen Stahlunion GmbH, dated April 14,
1998*

10.7 The Registrant's 1998 Stock Option Plan*

10.8 Employment Agreement, dated as of June 1, 1998, between the Registrant and Franz Eder*

10.9 Employment Agreement, dated as of April 14, 1998, between the Registrant and Iqbal Akram*

10.10 Agreement, dated as of April 14, 1998, between the Registrant, Wareham Management, Ltd., and George
Wilfred Norman Wareham*

10.11 Lease, dated as of June 1, 1998, by and between the Registrant and Intercap Resource Management U.S.,
Inc.*

10.12 Loan Agreement, dated May 13, 1998, between the Registrant and Marine Shuttle Operations AS**

21. List of the Registrant's Subsidiaries*

23. (a) Consent of Deloitte & Touche, Vancouver, British Columbia, Canada**

(b) Consent of Deloitte & Touche, Oslo, Norway**

(d) Consent of Bryns Patentkontor A/S**

27. Financial Data Schedule*

99. Statement of Approval from Det Norske Veritas AS regarding the technical feasibility of the Offshore
Shuttle concept**
</TABLE>

- ------------------------

* Previously filed

** Filed herewith

ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes to provide to the Underwriter
at the closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriter to
permit prompt delivery to each purchaser.

II-3
<PAGE>
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than payment by the Registrant of expenses incurred or paid
by a director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by final adjudication of
such issue.

The undersigned Registrant hereby undertakes that it will:

(1) For purposes of determining any liability under the Securities Act,
treat the information omitted from the form of Prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of Prospectus filed by the Registrant pursuant to Rule 424(b)(1), or
(4) or 497(h) under the Securities Act as part of this Registration
Statement as of the time the Commission declared it effective.

(2) For determining any liability under the Securities Act, treat each
post-effective amendment that contains a form of Prospectus as a new
registration statement for the securities offered in the registration
statement, and that offering of the securities at that time as the initial
bona fide offering of those securities.

(3) File, during any period in which it offers or sells securities, a
post-effective amendment to this Registration Statement to:

(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act;

(ii) Reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or together,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;

(iii) Include any material information with respect to the plan of
distribution not previously discussed in the registration statement or
any material change to such information in the registration statement.

(4) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.

II-4
<PAGE>
SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-1 and authorized this Registration
Statement to be signed on its behalf by the undersigned on October 14, 1998.

MARINE SHUTTLE OPERATIONS INC.

By: /S/ FRANZ EDER
-----------------------------------------
Franz Eder
PRESIDENT
(PRINCIPAL EXECUTIVE OFFICER)

By: /S/ GEORGE WILFRED NORMAN WAREHAM
-----------------------------------------
George Wilfred Norman Wareham
CHIEF FINANCIAL OFFICER
(PRINCIPAL FINANCIAL AND ACCOUNTING
OFFICER)

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Franz Eder, as his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and his name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute or substitutes, may lawfully do or cause to be done by
virtue thereof.

In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates stated.

SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------

/s/ FRANZ EDER Director
- ------------------------------ October 14, 1998
Franz Eder

/s/ IQBAL AKRAM Director
- ------------------------------ October 14, 1998
Iqbal Akram

/s/ JURGEN TERNIEDEN Director
- ------------------------------ October 14, 1998
Jurgen Ternieden

/s/ HUBERT BESNER Director
- ------------------------------ October 14, 1998
Hubert Besner

II-5
<PAGE>
EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT # DOCUMENT PAGE
- ----------- ------------------------------------------------------------------------------------------------ -----
<C> <S> <C>

1.1 Form of Amended Underwriting Agreement**

1.2 Form of Selected Dealers Agreement**

2.1 Stock Purchase Agreement, dated February 19, 1998, between the Registrant and Franz Eder*

2.2 Agreement Regarding Exchange of Shares between the Registrant, SPAX Holding AS, et. al.*

2.3 Form of Agreement Regarding Exchange of Shares between the Registrant and various stockholders
of Offshore Shuttle AS (including schedule of omitted documents pursuant to Item 601(a) of
Regulation S-K)*

2.4 Escrow Agreement, dated May 5, 1998, between the Registrant, various stockholders of Offshore
Shuttle AS, and Glad Arn Meyer & Co., as escrow agent*, amended as of September 2, 1998 and as
of September 28, 1998**

2.5 Stock Exchange Agreement, dated May 20, 1998, between the Registrant and G. Foss Beheer B.V.*

2.6 Stock Exchange Agreement, dated May 20, 1998, between the Registrant and Per Bull Haugsen*

3.1 Articles of Incorporation of the Registrant, as amended*

3.2 Amended and Restated By-laws of the Registrant*

4.1 Form of Common Stock Certificate*

5. Opinion of counsel to the Registrant concerning the legality of the securities being offered**

10.1 Head License Agreement between Marine Shuttle Operations AS and Offshore Shuttle AS dated March
31, 1998*, amended as of September 1, 1998**

10.2 Co-operation Agreement between Marine Shuttle Operations AS and Schuller Industrieentsorgung AG*

10.3 Personnel Services Contract between RC Consultants AS and Marine Shuttle Operations AS dated
February 26, 1998*

10.4 Accounting Services Contract between RC Consultants AS and Marine Shuttle Operations AS dated
February 26, 1998*

10.5 Loan Agreement, dated as of March 12, 1998, between the Registrant and ValorInvest, Ltd.*
(including promissory note dated March 12, 1998**), as amended on August 27, 1998 and September
24, 1998 (including promissory notes dated August 27, 1998 and September 24, 1998)**

10.6 Marketing Agreement between Marine Shuttle Operations AS and Thyssen Stahlunion GmbH, dated
April 14, 1998*

10.7 The Registrant's 1998 Stock Option Plan*

10.8 Employment Agreement, dated as of June 1, 1998, between the Registrant and Franz Eder*

10.9 Employment Agreement, dated as of April 14, 1998, between the Registrant and Iqbal Akram*

10.10 Agreement, dated as of April 14, 1998, between the Registrant, Wareham Management, Ltd., and
George Wilfred Norman Wareham*
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT # DOCUMENT PAGE
- ----------- ------------------------------------------------------------------------------------------------ -----
<C> <S> <C>
10.11 Lease, dated as of June 1, 1998, by and between the Registrant and Intercap Resource Management
U.S., Inc.*

10.12 Loan Agreement, dated May 13, 1998, between the Registrant and Marine Shuttle Operations AS.**

21. List of the Registrant's Subsidiaries*

23. (a) Consent of Deloitte & Touche, Vancouver, British Columbia, Canada**

(b) Consent of Deloitte & Touche, Oslo, Norway**

(d) Consent of Bryns Patentkontor A/S**

27. Financial Data Schedule*

99. Statement of Approval from Det Norske Veritas AS regarding the technical feasibility of the
Offshore Shuttle concept.**
</TABLE>

- ------------------------

* Previously filed

** Filed herewith

<PAGE>

Exhibit 1.1

Draft

UNDERWRITING AGREEMENT

THIS UNDERWRITING AGREEMENT (this "Agreement") is entered into as of
________, 1998, among Marine Shuttle Operations Inc., a Nevada corporation
(the "Company"), and Berliner Effektenbank AG, a German corporation ("BEB").

Background

The Company proposes to issue and sell through BEB 20,000,000 shares
(the "Securities") of its common stock par value $ 0.001 per share ("Common
Stock") on a "best efforts, all-or-none" basis (the "Offering").

In furtherance of the foregoing, the Company and BEB hereby agree as
follows:

Section 1

Sale of Securities

The Company proposes to issue and sell the Securities to the public
through BEB, as underwriter, at an offering price of US$_______ per share in
consideration for which the Company shall pay BEB, at the Closing (as defined
below), a commission equal to ten percent ( 10 %) of the aggregate purchase
price of the Securities.

Section 2

Payment and Delivery

2.1. The Company hereby appoints BEB as its exclusive agent (subject
to BEB's right to designate selected dealers who may participate in the
Offering) for a period (the "Offering Period") of thirty (30) days from the
date on which the Registration Statement (as hereinafter defined) becomes
effective (the "Effective Date"), to sell the Securities on a "best-efforts,
all-or-none" basis; provided however, the Company and BEB, by their mutual
written consent, may extend the Offering Period for an additional period of
up to thirty (30) days. An additional five (5) days may be added solely for
the

<PAGE>

purpose of allowing checks to clear. The Company and BEB, at any time, may
agree to terminate the Offering prior to the end of the Offering Period. BEB,
on the basis of the representations and warranties contained herein, and
subject to the terms and conditions set forth herein, accepts such
appointment and agrees to use its best efforts to find purchasers for the
Securities. BEB, as agent for the Company, shall offer the shares of Common
Stock to the public at a price of US$ _______ per share. If, at or prior to
the end of the Offering Period, subscriptions are received aggregating more
than the Securities, then BEB in its sole and absolute discretion, may
allocate the Securities among the subscribers in such manner as it shall see
fit.

2.2 Until all of the Securities have been subscribed and paid for,
all subscription amounts shall be deposited no later than noon on the
business day next following their receipt by BEB or any participating
Selected Dealer (as hereinafter defined), directly into a separate account
(the "Escrow Account") to be held by BEB in escrow as agent for the
subscribers. All such subscription amounts shall be held in the Escrow
Account until disbursed as hereinafter provided.

2.3 Promptly after the Effective Date, (i) the Company shall deliver
to its transfer agent (the "Transfer Agent") certificates which will be used
to represent the Securities to be sold hereunder through BEB; and (ii) the
Company shall instruct the Transfer Agent to deliver a certificate evidencing
the Securities (or shall electronically transfer evidence of the Securities)
to Depositary Trust Company for deposit into the account of BEB's clearing
firm for the benefit of BEB on the Closing Date.

2.4 If all of the Securities are not sold within the Offering
Period, this Agreement automatically shall terminate, the Securities held by
BEB shall be returned to the Transfer Agent, and all amounts in the Escrow
Account promptly shall be returned to the subscribers without interest
thereon or deduction therefrom.

2.5 If all of the Securities have been subscribed for and payment
therefor has been tendered prior to the expiration of the Offering Period,
BEB promptly shall give written notice (the "Notice") to the Company and the
Transfer Agent so indicating and setting forth (i) the amount of BEB's
commission, (ii) the time and date (which date shall be no later than
sixty-five (65) days after the Effective Date) on which the closing (the
"Closing") shall take place (the "Closing Date"), and (iii) a

2
<PAGE>

written statement reflecting each subscription which identifies, among other
things, the name and address of each subscriber, the number of Securities
allocated to each subscriber, the amount tendered as payment therefor, and,
if the provisions of Section 2.7 below are applicable, the amount equal to
the aggregate price of that number of Securities for which such subscription
its not being accepted. The Closing shall take place at the offices of BEB,
Kurfurstendamm 119, 10711 Berlin, Germany, or at such other place as BEB and
the Company shall agree.

2.6 At the Closing, (i) BEB shall deliver and remit to the Company
from the Escrow Account the purchase price of such Securities, less BEB's
commission, and (ii) the Company shall instruct Depositary Trust Company to
deposit the Securities into the account of BEB's clearing firm for the
benefit of BEB. Upon receipt of the Securities, BEB shall deliver to each
purchaser certificates representing the Securities sold to each purchaser (or
shall electronically transfer evidence of ownership to each such purchaser).

2.7 If, prior to the end of the Offering Period, subscriptions are
received aggregating more than the Securities, then (i) BEB, in its sole and
absolute discretion, may allocate the Securities among the subscribers in
such manner as it shall see fit, and (ii) BEB shall remit to those
subscribers whose subscriptions are not being accepted, in whole or in part,
an amount of money equal to the price of that number of Securities for which
such subscription is not being accepted.

Section 3

Offering of the Securities on Behalf of the Company

3.1. In offering the Securities for sale, BEB shall offer the
Securities solely as agent for the Company, and such offering shall be made
upon the terms and subject to the conditions set forth in the Registration
Statement and Prospectus (each as hereinafter defined). BEB shall commence
offering the Securities for sale as agent for the Company as soon after the
Effective Date as BEB may deem advisable; provided, however, if BEB does not
commence such offering within three (3) business days after the Effective
Date, it promptly shall so advise the Company and the Securities and Exchange
Commission (the "Commission").

3
<PAGE>

3.2. In accordance with the applicable provisions of the
Registration Statement (as hereinafter defined) and this Agreement, BEB may
offer and sell the Securities for the account of the Company through
registered dealers selected by BEB (the "Selected Dealers"), and may allow
such concessions (out of the underwriting commission) to the Selected Dealers
as BEB may determine. All sales by Selected Dealers shall be on behalf of the
Company. BEB shall have the authority to appoint Selected Dealers as agents
for the Company; provided, however, no Selected Dealer shall be appointed by
BEB unless such Selected Dealer has duly executed and delivered to BEB a
Selected Dealers Agreement in the form filed as an exhibit to the
Registration Statement. In no event shall Selected Dealers be agents or
sub-agents of BEB. Except as herein provided, the Company shall not appoint
any other agents in offering the Securities for sale.

3.3. BEB represents, warrants, and covenants that, as part of the
distribution of the Securities, it has not offered or sold, and will not,
offer, sell, or deliver, directly or indirectly, any of the Securities or
distribute any prospectus relating to the offering of the Securities within
the United States or to any U.S. Person (as defined below). In addition, BEB
has agreed that it will offer to sell Securities only in compliance with all
relevant requirements of any applicable laws. As used herein, the term "U.S.
Person" means any resident or national of the United States, any corporation,
partnership, or other entity created or organized in or under the laws of the
United States, or any estate or trust the income of which is subject to
United States income taxation regardless of the source of its income (other
than the foreign branch of any U.S. Person), and includes any United States
branch of a person other than a U.S. Person.

3.4. BEB agrees that (i) it will not offer or sell any Securities to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purpose of their businesses or otherwise in
circumstances which will not involve an offer to the public in the United
Kingdom within the meaning of the Public Offers of the Securities Regulations
1995 ("the Regulations"); (ii) it will comply with all applicable provisions
of the Financial Services Act 1986 and the Regulations with respect to
anything done by it in relation to the Securities in, from, or otherwise
involving the United Kingdom; and (iii) it will only issue or pass on to any
person in the United Kingdom any document received by it in connection with
the offer of the Securities if that person is of a kind described in Article
11(3) of

4
<PAGE>

the Financial Services Act 1986 (Investment Advertisements) (Exemption) Order
1996 or is a person to whom such document may otherwise lawfully be issued or
passed on.

Section 4

Representations and Warranties of the Company.

The Company represents and warrants to, and agrees with that:

4.1. A registration statement (File No. 333-58465) on Form S-1
relating to the Offering, including a form of prospectus subject to
completion, copies of which have heretofore been delivered to BEB has been
prepared by the Company in conformity with the requirements of the Securities
Act of 1933, as amended (the "Act"), and the rules and regulations
promulgated thereunder by the Commission (the "Rules and Regulations"), and
has been filed with the Commission under the Act. In addition, one or more
amendments to such registration statement may have been so filed. After the
execution of this Agreement, (i) if the Commission has declared such
registration statement (as it may have been amended) to be effective under
the Act, then the Company, if required, will file with the Commission a
prospectus in the form most recently included in an amendment to such
registration statement (or, if no such amendment shall have been filed, in
such registration statement), with such changes or insertions as are required
by Rule 430A under the Act or permitted by Rule 424(b) under the Act, and as
has been furnished to and approved by BEB prior to the execution of this
Agreement; or (ii) if the Commission has not declared such registration
statement (as it may have been amended) to be effective under the Act, then
the Company will file with the Commission an amendment to such registration
statement, including a form of prospectus, a copy of which amendment has been
furnished to and approved by BEB prior to the execution of this Agreement. As
used in this Agreement, the term "Registration Statement" means such
registration statement, as amended at the time when it was or is declared
effective, including all financial schedules and exhibits thereto, and
including any information omitted therefrom pursuant to Rule 430A under the
Act and included in the Prospectus (as defined below); the term "Preliminary
Prospectus" means each prospectus subject to completion, filed with such
registration statement or any amendment thereto (including the prospectus
subject to completion, if any, included in the Registration Statement or any
amendment thereto at the time it was or is declared effective); and the term
"Prospectus" means the prospectus first filed with the Commission pursuant to
Rule 424(b) under the Act, or, if no prospectus is required to be filed pursu-

5
<PAGE>

ant to said Rule 424(b), such term means the Prospectus included in the
Registration Statement; except that if such registration statement or
prospectus is amended or such prospectus is supplemented after the effective
date of such registration statement and prior to the Closing Date, then the
term "Registration Statement" shall include such registration statement as so
amended, and the term "Prospectus" shall include such prospectus as so
amended or supplemented, or both, as the case may be.

4.2. The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus.

4.3. The Company and its subsidiaries, Marine Shuttle Operation AS
and Offshore Shuttle AS (collectively, "Subsidiaries"), each has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, with full power and
authority (corporate and other) to own or lease its properties and to conduct
its business as described in the Prospectus, and is duly qualified to do
business as a foreign corporation and is in good standing as a foreign
corporation in all other jurisdictions in which the nature of its businesses
or the character or location of its properties requires such qualification,
except where failure to so qualify will not materially affect the Company's
business, properties, or financial condition.

4.4. The authorized, issued, and outstanding capital stock of the
Company as of March 31, 1998 is as set forth in the Prospectus under the
heading "Capitalization", and the shares of issued and outstanding capital
stock of the Company set forth thereunder have been duly authorized, validly
issued, and are fully paid and non-assessable. Except as set forth in the
Prospectus, no options, warrants, or other rights to purchase, agreements or
other obligations to issue, or agreements or other rights to convert any
obligation into, any shares of capital stock of the Company have been granted
or entered into by the Company. The capital stock of the Company conforms to
all statements relating thereto contained in the Registration Statement and
Prospectus.

4.5. The Securities are duly authorized, and when issued, delivered,
and paid for pursuant to this Agreement, shall be validly issued, fully paid
and non-assessable, and free of pre-emptive rights of any security holder of
the Company. Except as described in the Registration Statement, neither the
filing of the Registration Statement nor the offering or sale of the
Securities as contemplated

6
<PAGE>

by this Agreement gives rise to any rights, other than those which have been
waived or satisfied, for or relating to the registration of the sale or
transfer of any shares of Common Stock.

4.6. This Agreement has been duly and validly authorized, executed,
and delivered by the Company. The Company has full power and lawful authority
to authorize, issue, and sell the Securities to be sold by it hereunder on
the terms and conditions set forth herein. No consent, approval,
authorization, or other order of any governmental authority is required in
connection with the authorization, execution, and delivery of this Agreement
or with the authorization, issuance, and sale of the Securities, except as
may be required under the Act or state securities laws.

4.7. Except as described in the Prospectus, (i) neither the Company
nor its Subsidiaries are in violation, breach, or default of or under, and
the consummation of the transactions herein contemplated and the fulfilment
of the terms of this Agreement shall not conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge, or
encumbrance upon any of the property or assets of the Company or its
Subsidiaries pursuant to the terms of, any indenture, mortgage, deed of
trust, loan agreement, or other agreement or instrument to which the Company
or its Subsidiaries are a party or by which the Company or its Subsidiaries
may be bound or to which any of the property or assets of the Company or its
Subsidiaries is subject; and (ii) the consummation of the transactions
contemplated herein and the fulfilment of the terms of this Agreement shall
not result in any violation of the provisions of the articles of
incorporation or the by-laws of the Company or its Subsidiaries, or any
statute, or any applicable order, rule, or regulation of any court,
regulatory authority, or other governmental body having jurisdiction over the
Company or its Subsidiaries.

4.8. Subject to the qualifications stated in the Prospectus, the
Company and its Subsidiaries have good and marketable title to all properties
and assets described in the Prospectus as owned by them, free and clear of
all liens, charges, encumbrances, or restrictions, except such as are not
materially significant or important in relation to their business. All of the
material leases and subleases under which the Company or its Subsidiaries are
the lessor or sublessor of properties or assets, or under which the Company
or its Subsidiaries hold properties or assets as lessee or sublessee as
described in the Prospectus, are in full force and effect; except as
described in the Prospectus, neither the Company nor its Subsidiaries are in
default in any material respect with respect to any of the terms or pro-

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<PAGE>

visions of any of such leases or subleases, and no claim has been asserted by
anyone adverse to the rights of the Company or its Subsidiaries as lessor,
sublessor, lessee, or sublease under any of such leases or subleases; and the
Company or its Subsidiaries owns or leases all such properties described in
the Prospectus as are necessary to its operations as now conducted and,
except as otherwise stated in the Prospectus, as proposed to be conducted as
set forth in the Prospectus.

4.9. Deloitte & Touche, LLP has given its reports on certain
financial statements filed and to be filed with the Commission as a part of
the Registration Statement which are incorporated in the Prospectus; with
respect to the Company and its Subsidiaries, Deloitte & Touche, LLP is an
independent public accounting firm as required by the Act and the Rules and
Regulations.

4.10. The financial statements, together with related notes and
schedules, if any, set forth in the Prospectus and the Registration Statement
fairly present the financial position and results of operations and changes
in cash flow position of the Company and its Subsidiaries on the basis stated
in the Registration Statement at the respective dates and for the respective
periods to which they apply. Said statements and related notes and schedules
have been prepared in accordance with generally accepted accounting
principles applied on a basis which is consistent during the periods involved.

4.11. Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as set forth
in or contemplated by the Prospectus (i) neither the Company nor its
Subsidiaries have incurred any liabilities or obligations, direct or
contingent, not in the ordinary course of business, or entered into any
transaction not in the ordinary course of business, which is material to the
business of the Company or its Subsidiaries; (ii) there has not been any
change in the capital stock of the Company or its Subsidiaries, any
incurrence of short-term or long-term debt by the Company or its
Subsidiaries, any issuance of options, warrants, or other rights to purchase
the capital stock of the Company or its Subsidiaries, or any adverse change
or any development involving, so far as the Company can now reasonably
foresee, a prospective adverse change in the condition (financial or other),
net worth, results of operations, business, key personnel or properties of
the Company or its Subsidiaries which would be material to the business or
financial condition of the Company; and (iii) neither the Company nor its
Subsidiaries have become a party to, and neither the business nor the
property of the Company or its Subsidiaries have become the subject of, any
material litigation, whether or not in the ordinary of business.

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<PAGE>

4.12. Except as set forth in the Prospectus, there is not now
pending or threatened any action, suit, or proceeding in which the Company or
its Subsidiaries is a party, before or by any court or governmental agency or
body, which might result in any material adverse change in the condition
(financial or other), business, net worth, or properties of the Company or
its Subsidiaries, nor are there any pending or threatened actions, suits, or
proceedings related to environmental matters or discrimination on the basis
of age, sex, religion, or race; and no labour disputes involving the
employees of the Company or its Subsidiaries exist or are imminent which
might be expected to adversely affect the conduct of the business, property,
or operations of the Company or its Subsidiaries or the financial condition
or results of operations of the Company or its Subsidiaries.

4.13. Except as disclosed in the Prospectus, the Company and its
Subsidiaries have sufficient licenses, permits, and other governmental
authorizations currently required for the conduct of their business or the
ownership of their properties as described in the Prospectus and are in all
material respects complying therewith. In addition, except as otherwise
described in the Prospectus, the Company and its Subsidiaries own or possess
adequate rights to use all material patents, patent applications, trademarks,
service marks, trade-names, trademark registrations, service mark
registrations, copyrights, and licenses necessary for the conduct of such
business, and have not received any notice of conflict with the asserted
rights of others in respect thereof. None of the activities or businesses of
the Company or its Subsidiaries are in violation of, or cause the Company or
its Subsidiaries to violate, any law, rule, regulation, or order of the
United States or any state, county, or locality, or any agency or body of the
United States or any state, county, or locality, the violation of which would
have a material adverse impact upon the condition (financial or otherwise),
business, property, results of operations, or net worth of the Company or its
Subsidiaries.

4.14. Neither the Company nor its Subsidiaries, directly or
indirectly, (i) in violation of law, have made any contributions to any
candidate for political office or failed to disclose fully any such
contributions, or (ii) have made any payment to any state, federal, or
foreign governmental officer or official, or other person charged with
similar public or quasi-public duties, other than payments or contributions
required or allowed by applicable law. The Company's internal accounting
controls and procedures are sufficient to cause the Company to comply in all
material respects with the Foreign Corrupt Practices Act of 1977, as amended.

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<PAGE>

4.15. All contracts and other documents of the Company and its
Subsidiaries which are, under the Rules and Regulations, required to be filed
as exhibits to the Registration Statement have been so filed.

4.16. The Company and its Subsidiaries, directly or indirectly, have
not taken and shall not take any action designed to cause or result in, or
which has constituted or which might reasonably be expected to constitute,
the stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Securities hereby.

4.17. Except for Marine Shuttle Operations AS and Offshore Shuttle
AS, the Company has no subsidiaries or investments in, and has not made any
loans or advances to, any other corporation, partnership, or other entity.

4.18. The Company has not entered into any agreement or
understanding pursuant to which any person, either directly or indirectly, is
entitled to compensation from the Company or any principal stockholders,
officers, or directors of the Company for services as a finder in connection
with the offering of Securities contemplated by this Agreement.

Section 5

Covenants of the Company

The Company covenants and agrees with BEB that:

5.1. The Company shall use its best efforts to cause the
Registration Statement to become effective. If required, the Company shall
file the Prospectus and any amendment or supplement thereto with the
Commission in the manner and within the time period required by Rule 424(b)
under the Act. Upon notification from the Commission that the Registration
Statement has become effective, the Company shall so advise BEB. The Company,
at no time, whether before or after the Effective Date, shall file any
amendment to the Registration Statement or amendment or supplement to the
Prospectus without first advising BEB of such filing and without furnishing
BEB with a copy thereof. No such amendment or supplement shall be filed if
BEB or BEB's counsel has objected in writing to

10
<PAGE>

such filing or if such filing is not in compliance with the Act and the Rules
and Regulations. At the request of BEB, made any time prior to the expiration
of the Offering Period, the Company shall prepare and file with the
Commission, promptly upon BEB's request, any amendments or supplements to the
Registration Statement or Prospectus in compliance with the Act which, in
BEB's opinion, may be necessary or advisable in connection with the sale of
the Securities.

5.2. As soon as the Company is advised thereof, the Company shall
advise BEB and confirm such advice in writing (i) of the receipt of any
comments of the Commission with respect to any filing in connection with the
Registration Statement or supplement to the Prospectus, (ii) of the
effectiveness of any post-effective amendment to the Registration Statement,
(iii) of the filing of any supplement to the Prospectus or any amended
Prospectus, (iv) of any request made by the Commission for amendment of the
Registration Statement, for supplementing of the Prospectus, or for
additional information with respect thereto, or (v) of the issuance (or
threat thereof) by the Commission or any state or regulatory body of any stop
order or other order suspending the effectiveness of the Registration
Statement or any order preventing or suspending the use of any Preliminary
Prospectus or suspending the qualification of the Securities for offering in
any jurisdiction, or of the institution of any proceedings for any of such
purposes. The Company shall use its best efforts to prevent the issuance of
any such order and, if issued, to obtain the lifting thereof as soon as
possible.

5.3. The Company has caused to be delivered to BEB copies of each
Preliminary Prospectus, and the Company has consented and hereby consents to
the use of such copies for the purposes permitted by the Act. The Company
authorizes BEB and the Selected Dealers (collectively, the "Dealers") to use
the Prospectus in connection with the sale of the Securities for such period
as, in the opinion of counsel to BEB, the use thereof is required to comply
with the applicable provisions of the Act and the Rules and Regulations. If,
at any time within such period as a Prospectus is required under the Act to
be delivered in connection with sales by any of the Dealers, (i) it shall be
necessary to amend or supplement the Prospectus to comply with law or with
the Rules and Regulations, or (ii) any event happens of which the Company has
knowledge and which materially affects the Company or the securities of the
Company, or which, in the opinion of counsel for the Company or counsel for
BEB, should be set forth in an amendment to the Registration Statement or an
amendment or supplement to the Prospectus in order to make the statements
therein, in light of the circumstances existing at the time the Prospectus is
required to be delivered to a purchaser of the Securities, not then mis-

11
<PAGE>

leading in any material respect, then the Company promptly will notify BEB
and forthwith prepare and furnish to BEB copies of such amended Registration
Statement or Prospectus or of such supplement to be attached to the
Prospectus, in such quantities as BEB may reasonably request, in order that
the Registration Statement and Prospectus, as so amended or supplemented,
will not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements in the Registration
Statement and Prospectus, in the light of the circumstances under which they
are made, not misleading in any material respect. The preparation and
furnishing of any such amendment or supplement to the Registration Statement
or Prospectus shall be without expense to BEB.

5.4. The Company shall comply with the Act, the Rules and
Regulations, the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations promulgated thereunder, in connection
with the offering and issuance of the Securities.

5.5. On the Effective Date and at all times subsequent thereto up to
the Closing Date, (i) the Registration Statement and Prospectus shall conform
in all material respects to the requirements of the Act and the Rules and
Regulations; and (ii) neither the Registration Statement nor the Prospectus
shall include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make statements
therein not misleading; provided, however, the Company makes no
representations, warranties, or agreements as to information contained in or
omitted from the Registration Statement of Prospectus in reliance upon, and
in conformity with, information furnished to the Company by or on behalf of
BEB.

5.6. The Company shall use its best efforts to assist BEB and its
counsel in order to qualify or register the Securities for sale under (or
obtain an exemption from the application of) the securities or "blue sky"
laws of such jurisdictions as BEB may designate, and shall make such
applications and furnish such information as may be required for that purpose
and to comply with such laws; provided, however, the Company shall not be
required to qualify as a foreign corporation or a dealer in securities or to
execute a general consent of service of process in any jurisdiction in any
action other than one arising out of the offering or sale of the Securities.
The Company, from time to time, shall prepare and file such statements and
reports as are or may be required to continue such qualification in effect
for so long a period as BEB may reasonably request.

12
<PAGE>

5.7. The Company shall use its best efforts (i) to cause a
registration statement under the Exchange Act to be declared effective
concurrently with the completion of the Offering and shall notify BEB, in
writing, immediately upon the effectiveness of such registration statement,
and (ii) if requested by BEB, to obtain and keep current a listing in the
Standard & Poor's Corporation Records, Standard and Poor's Monthly Stock
Guide, and Moody's Industrial OTC Manual, and to have the Company listed in
such reports for a period of not less than ten (10) years from the Closing
Date.

5.8. For so long as the Company is a reporting company under either
Section 12(g) or 15(d) of the Exchange Act, the Company, at its expense,
shall furnish to its stockholders an annual report (including financial
statements audited by independent public accountants) in reasonable detail
and, at its expense, shall furnish to BEB during the period ending five (5)
years from the date hereof, (i) as soon as practicable after the end of each
fiscal year, a balance sheet of the Company and any of its subsidiaries, as
of the end of such fiscal year, together with statements of income, surplus,
and cash flow of the Company and any subsidiaries for such fiscal year, all
in reasonable detail and accompanied by a copy of the certificate or report
thereon of independent accountants; (ii) as soon as practicable after the end
of each of the first three (3) fiscal quarters of each fiscal year,
consolidated summary financial information of the Company for each such
quarter in reasonable detail; (iii) as soon as they are available, a copy of
all reports (financial or other) mailed to security holders; (iv) as soon as
they are available, a copy of all reports and financial statements furnished
to or filed with the Commission or any securities exchange or automated
quotation system on which any class of securities of the Company is listed,
except such reports and financial statements which may have been granted
"confidential treatment" under the Exchange Act or under any other applicable
law, rule, or regulation; and (v) such other information as BEB, from time to
time, may request, but only to the extent such information is not material,
non-public information. In the event the Company has an active subsidiary or
subsidiaries, such financial statements referred to above will be on a
consolidated basis to the extent the accounts of the Company and its
subsidiary or subsidiaries are consolidated in reports furnished to its
stockholders generally.

5.9. The Company shall comply with all periodic reporting and proxy
solicitation requirements under the Exchange Act.

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<PAGE>

5.10. The Company shall deliver to BEB on or before the Closing Date
two (2) signed copies of the Registration Statement, including all financial
statements and exhibits filed therewith and all amendments thereto, and shall
deliver to BEB such number of conformed copies of the Registration Statement,
including such financial statements (but without exhibits) and all amendments
thereto, as BEB may request. The Company shall deliver to or upon the order
of BEB from time to time until the Effective Date, as many copies of any
Preliminary Prospectus filed with the Commission prior to the Effective Date
as BEB may request. The Company shall deliver to BEB on the Effective Date
and thereafter for so long as a Prospectus is required to be delivered under
the Act, as many copies of the Prospectus, in final form or as thereafter
amended or supplemented, as BEB from time to time may request.

5.11. The Company shall apply the net proceeds from the sale of the
Securities for the purposes set forth in the Prospectus under the heading
"Use of Proceeds", and shall file such reports with the Commission with
respect to the sales of the Securities and the application of the proceeds
therefrom as may be required under the Act.

5.12. Upon the Effective Date, the Company shall make all filings
required, including registration under the Exchange Act, to obtain the
listing of the Common Stock in the NASDAQ System and on the Frankfurt Stock
Exchange and the Berlin Stock Exchange, and shall use its best efforts to
maintain such listings for at least ten (10) years from the date of this
Agreement.

5.13. The Company shall not take, directly or indirectly, any action
designed to, or which constitutes, or which might reasonably be expected to
cause or result in the stabilization or manipulation of the price of the
Securities.

5.14. The Company shall not effect a change in its accounting firm,
except to a nationally recognized accounting firm, for a period of five (5)
years from the Effective Date without the prior written consent of BEB.

5.15. During the Offering Period and for a twenty-five (25) day
period thereafter, the Company shall not issue press releases or engage in
other publicity without the prior written consent of

14
<PAGE>

BEB which consent shall not be unreasonably withheld. Notwithstanding the
foregoing, the Company may issue such press releases to comply with its
obligations under applicable securities laws.

5.16. On the Closing Date, all transfer or other taxes (including
franchise, capital stock, or other tax, other than income taxes, imposed by
any jurisdiction), if any, which are required to be paid in connection with
the sale and transfer of the Securities through BEB hereunder shall have been
fully paid or provided for by the Company and all laws imposing such taxes
will have been fully complied with.

Section 6

Conditions to the Obligations of BEB

The obligations of BEB to act as agent of the Company hereunder, to
find purchasers for the Securities, and to consummate the transactions
contemplated on the Closing Date, are subject to the accuracy of (as of the
date hereof and as of the Closing Date) and compliance with the covenants,
representations and warranties of the Company contained herein, the
performance by the Company of its obligations hereunder, and the following
conditions:

6.1. BEB shall have received notice of the effectiveness of the
Registration Statement not later than 9:30 a.m., New York time, on the day
following the date of this Agreement, or at such later time or on such later
date as to which BEB may agree in writing; on or prior to the Closing Date,
no stop order denying or suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that or a similar
purpose shall have been instituted or shall be pending or, to BEB's knowledge
or to the knowledge of the Company, shall be contemplated by the Commission;
and any request on the part of the Commission for additional information
shall have been complied with to the reasonable satisfaction of BEB. If
required, the Prospectus shall have been filed with the Commission in the
manner and within the time period required by Rule 424(b) under the Act.

6.2. Prior to the Effective Date and again on and as of the Closing
Date, BEB shall have received a letter from Deloitte & Touche, LLP,
independent public accountants for the Company, substantially in the form
approved by BEB, which sets forth for the period from the last unaudited
balance sheet included in the Registration Statement to a date not more than
five (5) business days

15
<PAGE>

prior to the date of such letter (i) changes in the Company's capital stock,
(ii) changes in the Company's net assets, and (iii) changes in the Company's
long term debt.

6.3. At the Closing Date, (i) the representations and warranties of
the Company contained in this Agreement shall be true and correct with the
same effect as if made on and as of the Closing Date, and the Company shall
have performed all of its obligations hereunder and satisfied all the
conditions on its part to be satisfied at or prior to the Closing Date; (ii)
the Registration Statement, the Prospectus, and any amendments or supplements
thereto shall contain all statements which are required to be stated therein
in accordance with the Act and the Rule and Regulations and shall conform to
the requirements thereof in all material respects, and neither the
Registration Statement, the Prospectus, nor any amendment or supplement
thereto shall contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading; (iii) since the respective dates as of
which information is given, there shall have been no material adverse change,
or any development involving a prospective material adverse change, in the
business, properties, condition (financial or otherwise), results of
operations, capital stock, long-term or short-term debt, or general affairs
of the Company from that set forth in the Registration Statement and the
Prospectus, except changes which the Registration Statement and Prospectus
indicate might occur after the Effective Date, and the Company shall not have
incurred any material liabilities or entered into any agreement not in the
ordinary course of business, other than as referred to in the Registration
Statement and Prospectus; (iv) except as set forth in the Prospectus, no
action, suit, or proceedings, at law or in equity, shall be pending or
threatened against the Company which would be required to be set forth in the
Registration Statement, and no proceedings shall be pending or threatened
against the Company before or by any commission, board, or administrative
agency, in the United States or elsewhere, wherein an unfavourable decision,
ruling, or finding would materially and adversely affect the business,
property, condition (financial or otherwise), results of operations, or
general affairs of the Company, and (v) on the Closing Date, BEB shall have
received a certificate, signed by the principal financial officer of the
Company and by either the Chairman of the Board or the President of the
Company, dated as of the Closing Date, evidencing compliance with the
provisions of this Section 6.3.

6.4. All proceedings taken at or prior to the Closing Date in
connection with the issuance and sale of the Securities shall be satisfactory
in form and substance to BEB and BEB shall have been

16
<PAGE>

furnished with all such documents, certificates, and opinions as BEB may
reasonably request in connection with this transaction in order to evidence
the accuracy and completeness of any of the representations, warranties, or
statements of the Company, or its compliance with any of the covenants or
conditions contained herein.

Section 7

Conditions to the Obligations of the Company

The obligation of the Company to sell and deliver the Securities is
subject to the following conditions:

7.1. The Registration Statement shall have become effective no later
than 9:30 a.m., New York time, on the day following the date of this
Agreement, or on such later date as the Company and BEB may agree in writing.

7.2. At the Closing Date, no stop orders suspending the
effectiveness of the Registration Statement shall have been issued under the
Act, and no proceedings therefor shall have been initiated or threatened by
the Commission.

Section 8

Indemnification

8.1. The Company agrees to indemnify and hold harmless BEB against
any losses, claims, damages, or liabilities (which, for all purposes of this
Agreement, shall include, but shall not be limited to, all reasonable costs
of defense and investigations and all reasonable attorneys' fees and
disbursements) (collectively, "Liabilities"), to which BEB may become subject
under the Act or otherwise, and shall reimburse, as incurred, BEB for any
legal or other expenses reasonably incurred in connection with investigating,
defending against, or appearing as a third party witness in connection with
any Liabilities, insofar as such Liabilities (or actions in respect thereof)
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in (1) the Registration Statement,
any Preliminary Prospectus, the Prospectus, or any amendment or supplement
thereto, or (2) any blue sky application or other document executed by the
Company in connection

17
<PAGE>

with such application, or written information furnished by the Company, filed
in any state or other jurisdiction in order to qualify any or all of the
Securities under the securities laws thereof (any such application, document,
or information being hereinafter called a "Blue Sky Application"), or (ii)
arise out of or are based upon the omission or alleged omission to state in
the Registration Statement, any Preliminary Prospectus, the Prospectus, any
amendment or supplement thereto, or in any Blue Sky Application, a material
fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, the Company shall not be liable in
any such case to the extent, but only to the extent, that any such Liability
arises out of or is based upon an untrue statement, an alleged untrue
statement, an omission, or an alleged omission, made in reliance upon and in
conformity with information furnished to the Company by or on behalf of BEB
for use in the preparation of the Registration Statement, any Preliminary
Prospectus, the Prospectus, any amendments or supplement thereto, or any Blue
Sky Application. This indemnity will be in addition to any liability which
the Company may otherwise have.

8.2. BEB will indemnify and hold harmless the Company, each of its
directors, each nominee for director named in the Prospectus (if any), each
of its officers who have signed the Registration Statement, and each person,
if any, who controls the Company within the meaning of the Act, against any
Liabilities to which the Company or any such director, nominee, officer, or
controlling person may become subject under the Act or otherwise, insofar as
such Liabilities (or actions in respect thereof) arise out of or are based
upon (i) a breach of the provisions of Sections 3.3 and 3.4 hereof, or (ii)
any untrue statement, or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, or arise out or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, BEB shall be liable only to the extent that
such untrue statement, alleged untrue statement, omission, or alleged
omission contained in the Registration Statement, any Preliminary Prospectus,
the Prospectus, or any amendment or supplement thereto, was made in reliance
upon and in conformity with information furnished to the Company by BEB for
use in the preparation thereof. This indemnity will be in addition to any
liability which BEB may otherwise have.

8.3. If, after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, a claim in respect thereof is to
be made against the indemnifying party

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<PAGE>

under this Section 8, then such indemnified party promptly shall notify the
indemnifying party in writing of the commencement thereof; however, the
omission to notify the indemnifying party shall not relieve the indemnifying
party from any liability which it may have to any indemnified party otherwise
than under this Section 8. In case any such action is brought against any
indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party, subject to the provisions stated herein,
shall be entitled to participate in, and to the extent that it may wish,
jointly with any other indemnifying party similarly notified, assume the
defense thereof, with counsel reasonably satisfactory to such indemnified
party. After notice from the indemnifying party to such indemnified party of
its election to assume the defense thereof, the indemnifying party will not
be liable to such indemnified party under this Section 8 for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof, other than for reasonable costs of investigation.
The indemnified party shall have the right to employ separate counsel in any
such action and to participate in the defense thereof, but the fees and
expenses of such separate counsel shall not be at the expense of the
indemnifying party if the indemnifying party has assumed the defense of the
action with counsel reasonably satisfactory to the indemnified party;
provided, however, the fees and expenses of such separate counsel shall be at
the expense of the indemnifying party if (i) the employment of such separate
counsel has been specifically authorized in writing by the indemnifying
party, or (ii) the defendants in any such action include both the indemnified
and the indemnifying party, and the indemnified party reasonably has
concluded that (1) there may be a conflict between the positions of the
indemnifying party and the indemnified party in conducting the defense of any
such action, or (2) there may be legal defences available to the indemnified
party and/or other indemnified parties which are different from or additional
to those available to the indemnifying party (in which case the indemnifying
party shall not have the right to assume the defense of such action on behalf
of such indemnified party or parties). It is understood, however, that the
indemnifying party, in connection with any one such action, or in connection
with any separate but substantially similar or related action in the same
jurisdiction arising out of the same general allegations or circumstances,
shall not be liable for the fees and expenses of more than one such separate
counsel for the indemnified party in all such actions, which counsel shall be
designated in writing by the indemnified party. No settlement of any action
against an indemnified party shall be made without the consent of the
indemnified party, which consent shall not be unreasonably withheld.

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<PAGE>

Section 9

Cost and Expenses.

9.1. Whether or not the sale of the Securities through BEB is
consummated, the Company shall pay all costs and expenses incident to the
performance of this Agreement by the Company including, but not limited to:
the fees and expenses of counsel to the Company and of the Company's
accountants; the costs and expenses incident to the preparation, printing,
filing, and distribution under the Act of the Registration Statement
(including the financial statements therein and all amendments and exhibits
thereto), each Preliminary Prospectus, and the Prospectus, as amended or
supplemented; all expenses, fees, and disbursements of counsel to BEB in
connection with the qualification or registration of the Securities (or the
exception from such requirements) under the securities or "blue sky" laws of
the states which BEB shall designate; the cost of printing and furnishing to
BEB copies of the Registration Statement, each Preliminary Prospectus, the
Prospectus, this Agreement, the Agreement Among Underwriters, the Selling
Agreement, the Selected Dealers Agreement, the Underwriter's Questionnaire
and Power of Attorney, and the Blue Sky Memorandum; any fees relating to the
listing of the Securities on NASDAQ, on the Frankfurt Stock Exchange and the
Berlin Stock Exchange or any other securities exchange; the cost of printing
the certificates representing the Securities; the fees of the transfer agent;
and the cost of publication of a "tombstone" of the Offering. The Company
shall pay any and all taxes (including any transfer, franchise, capital
stock, or other tax imposed by any jurisdiction) on sales through BEB
hereunder. The Company also shall pay all costs and expenses incident to the
furnishing of any amended Prospectus or any supplement to be attached to the
Prospectus as called for in Section 5.1 of this Agreement.

9.2. If the transactions contemplated hereby are not consummated by
reason of any action of BEB (except an action based upon the Company's breach
of any covenant, representation, or warranty contained herein, or because any
other condition to BEB's obligations hereunder which is required to be
fulfilled by the Company is not fulfilled), the Company shall be liable for
the out-of-pocket expenses of BEB up to $25,000, including the legal fees of,
and disbursements incurred by, BEB's counsel.

9.3. If the transactions contemplated hereby are not consummated by
reason of a breach by the Company of any covenant, representation, or
warranty herein, or (ii) if the Registration State-

20
<PAGE>

ment is not declared effective by the Commission within six (6) months after
the date of the filing of the Registration Statement with the Commission, and
the Company elects to discontinue the Offering through BEB, then the Company
shall be liable for all out-of-pocket expenses of BEB actually incurred
(including the legal fees of and disbursements incurred by BEB's counsel) in
connection with the Offering.

9.4. Except as set forth in the Prospectus, (i) no person, directly
or indirectly, is entitled to compensation from the Company, BEB or any other
person for services as a finder in connection with the Offering, and (ii) the
Company agrees to indemnify and hold harmless BEB against any Liabilities to
which BEB may become subject, insofar as such Liabilities (or actions in
respect thereof) arise out of or are based upon the claim of any person
(other than an employee of the party claiming indemnity) or entity that he or
it is entitled to a finder's fee in connection with the Offering by reason of
such person's or entity's influence or prior contact with the indemnifying
party.

Section 10

Termination

10.1. BEB may terminate this Agreement, except for Sections 8, 9 and
11.1, at any time prior to the Closing Date, if, in its sole judgement, it is
impracticable to offer for sale or to enforce contracts made by BEB for the
sale of the Securities hereunder by reason of (i) the Company having
sustained a material loss, whether or not insured, by reason of fire,
earthquake, flood, accident, or other calamity, or from any labour dispute or
court or government action, order, or decree, (ii) trading in securities on
the New York Stock Exchange or the American Stock Exchange having been
suspended or limited, (iii) material governmental restrictions having been
imposed on trading in securities generally (not in force and effect on the
date hereof), (iv) a banking moratorium having been declared by German state
authorities, (v) an outbreak of major international hostilities, or other
national or international calamity having occurred, (vi) a pending or
threatened legal or governmental proceeding or action relating generally to
the Company's business, or a notification having been received by the Company
of the threat of any such proceeding or action, which could materially
adversely affect the Company; (vii) except as contemplated by the Prospectus,
the Company being merged or consolidated into, or acquired by another company
or group, or the existence of a binding legal commitment for the foregoing,
or any other material change of ownership or control occurs; (viii) the

21
<PAGE>

passage of any act or measure by the Congress of the United States or by any
state legislative body of similar impact, or the adoption of any orders,
rules, or regulations by any governmental body, authoritative accounting
institute or board, or any governmental executive, which is reasonably
believed by BEB to have a material impact on the business, financial
condition, or financial statements of the Company or any subsidiary of or
successor to the Company; (ix) any material adverse change in the financial
or securities markets, beyond normal market fluctuations, having occurred
since the date of this Agreement, or (x) any material adverse change having
occurred, since the respective dates as of which information is given in the
Registration Statement and Prospectus, in the earnings, business prospectus,
or general condition of the Company, financial or otherwise, whether or not
arising in the ordinary course of business.

10.2. If, at the Closing Date, any of the conditions provided for in
Section 6 shall not have been fulfilled, BEB may terminate this Agreement and
all of its obligations hereunder, by notifying the Company of such
termination, in writing or by telefax, at or prior to the Closing Date.

10.3. If BEB elects to terminate this Agreement as provided in this
Section 10, the Company promptly shall be notified by BEB by telephone or
telefax, followed by confirmation by letter.

Section 11

Miscellaneous

11.1. The respective indemnities, agreements, representations,
warranties, and other statements of and by the Company and BEB, and the
undertakings set forth in or made pursuant to this Agreement, shall remain in
full force and effect, regardless of any investigation made by or on behalf
of BEB, the Company or any of its officers or directors or any controlling
person, and shall survive delivery of and payment of the Securities and the
termination of this Agreement.

11.2. Each of the parties hereto will cooperate with the other and
execute and deliver to the other party hereto such other instruments and
documents and take such other actions as may be reasonably requested from
time to time by the other party hereto as necessary to carry out, evidence,
and confirm the intended purposes of this Agreement.

22
<PAGE>

11.3. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties.

11.4. This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior
arrangements and understandings, both written and oral, expressed or implied,
with respect thereto.

11.5. It is the desire and intent of the parties that the provisions
of this Agreement be enforced to the fullest extent permissible under the law
and public policies applied in each jurisdiction in which enforcement is
sought. Accordingly, in the event that any provision of this Agreement would
be held in any jurisdiction to be invalid, prohibited or unenforceable for
any reason, such provision, as to such jurisdiction, will be ineffective,
without invalidating the remaining provisions of this Agreement or affecting
the validity or enforceability of such provision in any other jurisdiction.
Notwithstanding the foregoing, if such provision could be more narrowly drawn
so as not to be invalid, prohibited or unenforceable in such jurisdiction, it
will, as to such jurisdiction, be so narrowly drawn, without invalidating the
remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.

11.6. All notices and other communications required or permitted
under to this Agreement must be in writing and will be deemed given if sent
by personal delivery, fax with electronic confirmation of delivery,
internationally-recognized overnight courier company that is able to provide
proof or receipt of delivery, or registered or certified mail (return receipt
requested), postage prepaid, to the parties at the following addresses (or at
such other address for a party as may be specified by like notice):

<TABLE>

<S> <C>
If to BEB: Berliner Effektenbank AG
Attention: Mr. Guido Sandler
Kurfurstendamm 119, 10711 Berlin, Germany
Tel: 49-30-89 02 13 00
Fax: 49-30-89 02 13 99

If to the Company: Marine Shuttle Operations, Inc.
Attention: Mr. Franz Eder, President
4410 Montrose Boulevard
Houston, Texas 77006

23
<PAGE>

Tel: 713-529-7498
Fax: 713-529-3332

With a copy to: Breslow & Walker, LLP
Attention: Leonard J. Breslow, Esq.
100 Jericho Quadrangle
Suite 230
Jericho, N.Y. 11753
Tel: 516-822-6505
Fax: 516-822-6544
</TABLE>

All such notices and other communications will be deemed to have
been received (i) in the case of personal delivery, on the date of such
delivery, (ii) in the case of a fax, when the party sending such fax has
received electronic confirmation of its delivery, (iii) in the case of
delivery by internationally-recognized overnight courier, on the business day
following dispatch and (iv) in the case of mailing, on the third business day
following mailing.

11.7. The headings contained in this Agreement are for reference
purposes only and will not affect in any way the meaning or interpretation of
this Agreement.

11.8. None of the provisions of this Agreement is or will be
construed as for the benefit of or enforceable by any person not a party to
this Agreement.

11.9. This Agreement may not be assigned by any party, by operation
of law or otherwise.

11.10. This Agreement will be governed by and construed in
accordance with the laws of the State of Nevada applicable to contracts made
and to be performed therein, without regard to conflicts of laws principles.

11.11. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rule of
strict construction will be applied against any party. Any reference to any
federal, state, local, or foreign statute or law will be deemed also to refer
to all rules and regulations promulgated thereunder, unless the context
requires otherwise. The parties intend that each representation, warranty,
and covenant contained herein will have independent significance. If any
party has breached any representation, warranty, or covenant contained herein
in any respect, the fact that there exists another representation, warranty,
or covenant relating to the same

24
<PAGE>

subject matter (regardless of the relative levels of specificity) which the
party has not breached will not detract from or mitigate the fact that the
party is in breach of the first representation, warranty, or covenant. Unless
otherwise expressly provided, the word "including" does not limit the
preceding words or terms.

11.12. This Agreement may be executed in one or more counterparts,
all of which will be considered one and the same agreement and will become
effective when one or more counterparts have been signed by each of the
parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.

11.13. This Agreement may be executed by delivery of executed
signature pages by fax and such fax execution will be effective for all
purposes.

Marine Shuttle Operations, Inc.

By:
--------------------
Name: Mr. Franz Eder
Title: President

Berliner Effektenbank AG

By: By:
------------------------- -----------------------
Name: Guido Sandler Name: Dr. Wolfgang Janka
Title: Vorstandsvorsitzender Title: Vorstandsmitglied

<PAGE>

Exhibit 1.2

[SELECTED DEALER]
____________________

_______________, 1998

RE: MARINE SHUTTLE OPERATIONS INC.

SELECTED DEALERS AGREEMENT BETWEEN BERLINER EFFEKTENBANK AG (THE "UNDERWRITER")
AND ________________ ("YOU")

Dear Mr. ______,

The Underwriter has agreed to offer and sell on behalf of Marine Shuttle
Operations Inc., a Nevada Corporation (the "Company"), 20,000,000 shares of
common stock (the "Shares"), all as set forth in the prospectus (the
"Prospectus") which is part of the Company's registration statement (the
"Registration Statement") filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Act"), and subject to the
terms of the Underwriting Agreement referred to therein.

THE PUBLIC OFFERING

The Company proposes to issue and sell the Shares to the public through the
Underwriter in accordance with the terms of the offering set forth in the
Prospectus. The Underwriter has full authority to take such action as it may
deem advisable in respect of all matters pertaining to the public offering of
the Shares.

OFFERING BY SELECTED DEALERS

The Underwriter is offering part of the Securities for sale through certain
dealers (the "Selected Dealers") at the public offering price less a concession
(the "Selected Dealers Concession") not in excess of 5 per cent for each Share,
subject to the terms and conditions herein and in the Prospectus and subject to
modification and cancellation of the offering without notice. Sales of Shares by
You pursuant to such offering shall be evidenced by the Underwriter's written
confirmation and shall be on the terms and conditions set forth herein. In
selling Shares, you shall not rely upon any statement whatsoever, written or
oral, other than statements contained herein and in the Registration Statement.

If you desire to apply act as a Selected Dealer primarily in the Norwegian
market and sell any of the Shares, please sign and return to the Underwriter
the enclosed copy of this letter, even though You may have advised the
Underwriter thereof previously by telephone of telegraph. Your application
should be sent to our above address. The Underwriter shall use its best efforts
to fill any subscriptions You may submit. The Underwriter reserves the right to
reject all subscriptions in whole or in part, to make allotments, and to close
the the subscription book at any time and without notice.

<PAGE>

CONDUCT OF OFFERING

On becoming Selected Dealer and in offering and selling the Shares, You agree to
comply with the applicable requirements of the Act and the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). As a Selected Dealer You shall be
supplied with such quantities of the Prospectus as, from time to time, You may
reasonably request.

OFFERING BY SELECTED DEALERS

Shares sold by You must be offered in conformity with the terms of the offering
set forth in the Prospectus.

PAYMENT AND DELIVERY

All subscription amounts for Shares purchased through You shall be deposited
with the Underwriter no later than noon on the business day next following their
receipt to be held in escrow by the Underwriter as Agent for the subscribers of
the Shares. If no closing takes place during the offering period (or any
extension thereof) then all funds promptly will be returned to the subscribers
thereof without any deduction therefrom or interests therein. The Selected
Dealers Concession payable to You hereunder shall be paid promptly after closing
of the offering (or on such earlier date as the Underwriter may determine).

RELATIONSHIP OF SELECTED DEALERS AND THE UNDERWRITER

You are not authorized to, and you agree not to give any information or to make
any representations other than as contained in the Prospectus or to act as as
agent or sub-agent for the Underwriter. Nothing herein shall constitute the
Selected Dealers as an association, unincorporated business or other separate
entity or partners with the Underwriter, or with each other, but You shall be
liable for the Underwriter's proportionate share of any tax, liability, or
expense based on any claim to the contrary. The Underwriter shall not be under
any liability to You, except for obligations expressly assumed by the
Underwriter in this Agreement; however, no obligations on the Underwriter's part
shall be implied or inferred herefrom.

NOTICES

All communications from You to the Underwriter shall be addressed to the above
address. Any notice from the Underwriter to You shall be delivered, mailed, or
telegraphed to you at the address to which this Agreement is mailed.

TERMINATION

This Agreement shall terminate on the last day of the offering period, and may
be terminated by the Underwriter prior thereto at any time. Such termination
shall not affect any of the provisions of Section "Conduct of Offering" hereof.

<PAGE>

This Agreement contains the entire agreement between the parties with respect to
the subject matter hereof, and supersedes all prior arrangements and
understandings, both written and oral, expressed or implied, with respect
thereto.

Very truly yours,

B E R L I N E R E F F E K T E N B A N K A G

Dr. Guido Sandler Dr. Wolfgang Janka

Confirmed and accepted as of
the date first above written.

_________________________

<PAGE>

Exhibit 2.4

ADDENDUM TO ESCROW AGREEMENT

Reference is made to the Escrow Agreement as of May 5, 1998, between

A. Marine Shuttle Operations, Inc. (formerly Geoteck International, Inc.),
a Nevada corporation
<TABLE>
<CAPTION>

<S> <C> <C>
B. 1. Spax Holding AS
2. Aasens Trykkerier AS
3. Arne Martinsen
4. Birger Holten
5. Jochen Schene
6. Frank Samuels
7. Jurgen Ternieden
8. Thyssen Stahlunion GmbH
9. Thor Stang
10. Norsk SMB Invest 1 AS
11. Norsk SMB Invest 2 AS
12. Norsk SMB Invest 3 AS
13. Norsk SMB Invest 4 AS
14. Einar Nistad/Nordas Invest AS
15. Inger Egeberg Sogstad
16. Erik Staumo
17. Knut Rygh
18. Georg Tidemann-Andersen
19. Arvid Kolle
20. AS Ineta
21. Concordia Capo
22. Concordia Foss
23. Concordia Star
24. Einar Myklebust
25. Erik Kristen-Johanssen
26. Gunnar Greibrokk
27. Gunnar Jorgensen
</TABLE>

<PAGE>

<TABLE>

<S> <C> <C>
28. Hannestad Mek
29. Jan Krohn-Hansen
30. Jens Holtung
31. Johnco AS
32. Johs Owren
33. Jon Fosse
34. Karlander Invest AS
35. Maria Hareide
36. Nistad Finans og Eiendom AS
37. Ole-Johan Olsen
38. Rolf Ness
39. Sigfred Lyngoy
40. Terje Rosjo
41. Trade Invest AS
42. Zaco AS, and
</TABLE>

C. Glad Arno Meyer & Co.

(the "Escrow Agreement"). All capitalized terms used and not defined herein will
have the meanings assigned to such terms in the Escrow Agreement.

The Escrow Agreement is hereby amended in the following respects:

Section 3, paragraph 2:

Prior to or on November 16, 1998, MSO Inc. will cause the shares
underlying the Regulation S Certificates to be registered under the
Securities Act of 1933, as amended.

Section 4. lit b):

If by the close of business (Oslo time) on November 16, 1998, 6:00
o'clock p.m., Escrow Agent has not received the notice specified in
Section 4. lit. a) of the Escrow Agreement, then Escrow Agent shall
return to each OSAS Stockholder the OSAS Stock deposited by such

2
<PAGE>

OSAS Stockholder and return to MSO Inc. the Regulation S Certificates
deposited by MSO Inc.

With the exception of the foregoing modifications to the Escrow Agreement, the
terms of the Escrow Agreement remain unchanged and in full force and effect.

Executed as of September 2, 1998.

A. Marine Shuttle Operations, Inc.

By: /s/ Franz Eder
-------------------------------------
Name: Franz Eder
Title: President

B. OSAS Stockholders

SPAX Holding AS

By: /s/ Tom Tidemann
------------------------------------
Name: Tom Tidemann (acc. to power of attorney)
Title:

Aasens Trykkerier AS

By: /s/
------------------------------------
Name:
Title:

<PAGE>

/s/ Arne Martinsen
- --------------------------------------
Arne Martinsen

/s/ Birger Holten
- --------------------------------------
Birger Holten

/s/ Joachim Schene
- --------------------------------------
Joachim Schene

/s/ Frank Samuels
- --------------------------------------
Frank Samuels

/s/ Jurgen Ternieden
- --------------------------------------
Jurgen Ternieden

Thyssen Stahlunion GmbH

By: /s/
-----------------------------------
Name:
Title:

/s/ Thor Stang
- --------------------------------------
Thor Stang

Norsk SMB Invest 1 AS

By: /s/
----------------------------------
Name:
Title:

4
<PAGE>

Norsk SMB Invest 2 AS

By: /s/
---------------------------------
Name:
Title:

Norsk SMB Invest 3 AS

By: /s/
--------------------------------
Name:
Title:

Norsk SMB Invest 4 AS

By: /s/
-------------------------------
Name:
Title:

EinarNistad/Nordas Invest AS

By: /s/
------------------------------
Name:
Title:

/s/ Inger Egeberg Sogstad
- --------------------------------------
Inger Egeberg Sogstad

5
<PAGE>

/s/ Erik Staumo
- --------------------------------------
Erik Staumo

/s/ Knut Rygh
- --------------------------------------
Knut Rygh

/s/ Georg Tidemann-Andersen
- --------------------------------------
Georg Tidemann-Andersen

/s/ Arvid Kolle
- --------------------------------------
Arvid Kolle

/s/ AS Ineta
- --------------------------------------
AS Ineta

Concordia Capo

By: /s/
----------------------------------
Name:
Title:

Concordia Foss

By: /s/
----------------------------------
Name:
Title:

6
<PAGE>

Concordia Star

By: /s/
----------------------------------
Name:
Title:

/s/ Einar Myklebust
- --------------------------------------
Einar Myklebust

/s/ Erik Kristen-Johanssen
- --------------------------------------
Erik Kristen-Johanssen

/s/ Gunnar Greibrokk
- --------------------------------------
Gunnar Greibrokk

/s/ Gunnar Jorgensen
- --------------------------------------
Gunnar Jorgensen

/s/ Hannestad Mek
- --------------------------------------
Hannestad Mek

/s/ Jan Krohn-Hansen

- --------------------------------------
Jan Krohn-Hansen

/s/ Jens Holtung
- --------------------------------------
Jens Holtung

/s/ Johnco AS
- --------------------------------------
Johnco AS

7
<PAGE>

/s/ Johs Owren
- --------------------------------------
Johs Owren

/s/ Jon Fosse
- --------------------------------------
Jon Fosse

Karlander Invest AS

By: /s/
----------------------------------
Name:
Title:

/s/ Maria Hareide
- --------------------------------------
Maria Hareide

Nistad Finans og Eiendom AS

By: /s/
----------------------------------
Name:
Title:

/s/ Ole-Johan Olsen
- --------------------------------------
Ole-Johan Olsen

/s/ Rolf Ness
- --------------------------------------
Rolf Ness

8
<PAGE>

/s/ Sigfred Lyng0y
- --------------------------------------
Sigfred Lyng0y

/s/ Terje R0sj0
- --------------------------------------
Terje R0sj0

Trade Invest AS

By: /s/
----------------------------------
Name:
Title:

Zaco AS

By: /s/
----------------------------------
Name:
Title:

C. Glad, Arn0, Meyer & Co.

By: /s/ Cato Myhre
----------------------------------
Name: Cato Myhre

<PAGE>

SECOND ADDENDUM TO ESCROW AGREEMENT

Reference is made to the Escrow Agreement (the "Loan Agreement") as of May 5,
1998, and the Addendum to Escrow Agreement as of September 2, 1998 (the "First
Addendum") between

A. Marine Shuttle Operations, Inc. (formerly Geoteck International, Inc.),
a Nevada corporation

and

B. 1. Spax Holding AS
2. Aasens Trykkerier AS
3. Arne Martinsen
4. Birger Holten
5. Jochen Schene
6. Frank Samuels
7. Jurgen Ternieden
8. Thyssen Stahlunion GmbH
9. Thor Stang
10. Norsk SMB Invest 1 AS
11. Norsk SMB Invest 2 AS
12. Norsk SMB Invest 3 AS
13. Norsk SMB Invest 4 AS
14. Einar Nistad/Nordas Invest AS
15. Inger Egeberg Sogstad
16. Erik Staumo
17. Knut Rygh
18. Georg Tidemann-Andersen
19. Arvid Kolle
20. AS Ineta
21. Concordia Capo
22. Concordia Foss
23. Concordia Star
24. Einar Myklebust
25. Erik Kristen-Johanssen
26. Gunnar Greibrokk

</TABLE>

<PAGE>

27. Gunnar Jorgensen
28. Hannestad Mek
29. Jan Krohn-Hansen
30. Jens Holtung
31. Johnco AS
32. Johs Owren
33. Jon Fosse
34. Karlander Invest AS
35. Maria Hareide
36. Nistad Finans og Eiendom AS
37. Ole-Johan Olsen
38. Rolf Ness
39. Sigfred Lyngoy
40. Terje Rosjo
41. Trade Invest AS
42. Zaco AS, and

</TABLE>

(individually, a "OSAS Stockholder" and collectively, the "OSAS Stockholders").
and

C. Glad Arno Meyer & Co. (the "Escrow Agent").

All capitalized terms used and not defined herein will have the meanings
assigned to such terms in the Escrow Agreement and the First Addendum.

The Escrow Agreement and the First Addendum is hereby amended in the following
respects:

Section 3, paragraph 2:

Prior to or on December 15, 1998, MSO Inc. will cause the shares
underlying the Regulation S Certificates to be registered under the
Securities Act of 1933, as amended.

<PAGE>

Section 4. lit b):

If by the close of business (Oslo time) on December 15, 1998, 6:00
o'clock p.m., Escrow Agent has not received the notice specified in
Section 4. lit. a) of the Escrow Agreement, then Escrow Agent shall
return to each OSAS Stockholder the OSAS Stock deposited by such OSAS
Stockholder and return to MSO Inc. the Regulation S Certificates
deposited by MSO Inc.

With the exception of the foregoing modifications to the Escrow Agreement and
the First Addendum, the terms of the Escrow Agreement and the First Addendum
remain unchanged and in full force and effect.

Executed as of September 28, 1998.

A. Marine Shuttle Operations, Inc.

By:
-----------------------
Name: Franz Eder
Title: President

B. OSAS Stockholders

SPAX Holding AS

By:
-----------------------
Name:
Title:

Aasens Trykkerier AS

By:
-----------------------
Name:
Title:

<PAGE>

- ----------------
Arne Martinsen

- ----------------
Birger Holten

- ----------------
Joachim Schene

- ----------------
Frank Samuels

- ----------------
Jurgen Ternieden

Thyssen Stahlunion GmbH

By:
-----------------------
Name:
Title:

- ----------------
Thor Stang

Norsk SMB Invest 1 AS

By:
-----------------------
Name:
Title:

<PAGE>

Norsk SMB Invest 2 AS

By:
-----------------------
Name:
Title:

Norsk SMB Invest 3 AS

By:
-----------------------
Name:
Title:

Norsk SMB Invest 4 AS

By:
-----------------------
Name:
Title:

EinarNistad/Nordas Invest AS

By:
-----------------------
Name:
Title:

- ------------------
Inger Egeberg Sogstad

<PAGE>

- ----------------
Erik Staumo

- ----------------
Knut Rygh

- -----------------------
Georg Tidemann-Andersen

- ------------------
Arvid Kolle

- ------------------
AS Ineta

Concordia Capo

By:
-----------------------
Name:
Title:

Concordia Foss

By:
-----------------------
Name:
Title:

<PAGE>

Concordia Star

By:
-----------------------
Name:
Title:

- ------------------
Einar Myklebust

- -------------------
Erik Kristen-Johanssen

- ------------------
Gunnar Greibrokk

- -----------------
Gunnar Jorgensen

- -----------------
Hannestad Mek

- ------------------
Jan Krohn-Hansen

- ------------------
Jens Holtung

- -----------------
Johnco AS

<PAGE>

- -----------------
Johs Owren

- -----------------
Jon Fosse

Karlander Invest AS

By:
-----------------------
Name:
Title:

- -----------------
Maria Hareide

Nistad Finans og Eiendom AS

By:
-----------------------
Name:
Title:

- -----------------
Ole-Johan Olsen

- -----------------
Rolf Ness

- -----------------
Sigfred Lyngoy

<PAGE>

- -----------------
Terje Rosjo

Trade Invest AS

By:
-----------------------
Name:
Title:

Zaco AS

By:
-----------------------
Name:
Title:

C. Glad, Arno, Meyer & Co.

By:
-----------------------
Name: Cato Myhre

<PAGE>
EXHIBIT 5

BRESLOW & WALKER, LLP
100 JERICHO QUADRANGLE
SUITE 230
JERICHO, NEW YORK 11753

OCTOBER 14, 1998

Board of Directors
Marine Shuttle Operations Inc.
4410 Montrose Blvd.
Houston, Texas 77006

Gentlemen:

It is our opinion that the securities being registered with the Securities
and Exchange Commission pursuant to the Registration Statement of Marine Shuttle
Operations Inc. on Form S-1 will, when sold, be legally issued, fully paid and
nonassessable.

We consent to the filing of this opinion as an exhibit to the aforesaid
Registration Statement and further consent to the reference made to us under the
caption "Legal Matters" in the Prospectus constituting part of such Registration
Statement.

Very truly yours,

/s/ Breslow & Walker, LLP

Breslow & Walker, LLP

<PAGE>

Exhibit 10.1

ADDENDUM TO HEAD LICENSE AGREEMENT

Reference is made to the Head License Agreement as of March 31, 1998,
between offshore Shuttle AS, and Marine Shuttle Operations AS (the "Head License
Agreement"). All capitalized terms used and not defined herein will have the
meanings assigned to such terms in the Head License Agreement.

The Head License Agreement is hereby amended in the following respects:

Article 3 para 1:

The Order Expiry Date for Offshore Shuttle No. 1 shall be December 31, 1998.

Article 9 para 1 (1):

Ten percent (10%) of the assumed Construction fee for Offshore Shuttle No. 1
shall be paid within November 30, 1998.

Article 10 para 1 (1)

USD 2 million shall be paid within November 30, 1998.

Article 20

The binding nature of this Agreement shall be conditional upon

(i) OSAS having received payment from MSO of the first installment of the
Exclusivity Fee in the amount of USD 2 mill within November 30, 1998.

(ii) MSO having placed a firm Order for Offshore Shuttle No. 1 with a yard
within December 31, 1998.

<PAGE>

With the exception of the foregoing modifications to the Head License Agreement,
the terms of the Head License Agreement remain unchanged and in full force and
effect.

EXECUTED AS OF SEPTEMBER 1, 1998

OFFSHORE SHUTTLE AS

------------------------------------
By:
Title:

MARINE SHUTTLE OPERATIONS AS

------------------------------------
By:
Title:

<PAGE>

Exhibit 10.5

NON-NEGOTIABLE PROMISSORY NOTE

U.S. $1,500,000.00 March 12, 1998

FOR VALUE RECEIVED, the undersigned GEOTECK INTERNATIONAL, INC. ("Borrower"),
does hereby promise to pay to the order of VALORINVEST LTD. ("Lender"), with
offices at 29 Quai des Bergues, Geneva, Switzerland 1201, and at said offices or
at such other place or places as the holder hereof may from time to time
designate in writing, the principal sum of ONE MILLION FIVE HUNDRED THOUSAND AND
00/100 UNITED STATES DOLLARS (U.S. $1,500,000), or so much thereof as shall have
been advanced hereunder by Lender to Borrower together with interest thereon as
provided below.

1. Interest. Interest will accrue on the outstanding principal amount
of this Note at the rate of seven and one half percent (7.5%) per annum from the
date of each advance, and until all amounts outstanding under this Note have
been paid in full.

2. Payments. Interest, principal and all other sums payable hereunder
(collectively, the "Obligations") shall be payable, without any offset,
reduction, counterclaim or recoupment whatsoever, in lawful money of the United
States of America which shall be legal tender in payment of all debts and dues,
public and private, at the time of payment, and shall be due and payable as
follows unless extended by the Lender:

(a) The Obligations shall be repaid in full upon the consummation of
any Borrower public offering of at least One Hundred Million Dollars
($100,000,000) in gross proceeds; or

(b) If not sooner paid (whether by acceleration or otherwise),
the entire balance of the Obligations shall be due and payable
December 31, 1998.

3. Advances. Upon receiving a properly executed original of this Note
and upon the satisfaction of the conditions precedent to any advance as set
forth herein, Lender shall make available the proceeds of the loan. Advances
shall be made available in $250,000 increments upon three (3) days written
notice of demand by Borrower; provided, however, that Lender is not required to
advance more than $500,000 in any single month. Advances are limited in the
aggregate to the stated principal amount of this Note; this is not a revolving
line of credit. The following shall be conditions precedent to any advance
hereunder (except to the extent and in the manner expressly waived by Lender,
and any such conditions waived by Lender may be reimposed as a condition of
subsequent advances):

(a) Borrower shall have executed and delivered this Note to the Lender.

<PAGE>

(b) All representations and warranties made by Borrower in this Note
shall be true, complete and correct on and as of the date of the making
of any advance hereunder as though such representations and warranties
were made anew on such date.

(c) There shall not have occurred and be continuing any default in the
performance or observance of any of the covenants, agreements, or
conditions to be performed or observed by Borrower under this Note or
in connection with any other obligations of Borrower to Lender, nor
shall there have occurred and be continuing any event, condition, or
circumstances which, with notice or the passage of time, or both, would
constitute a breach in any material respect of any representation,
covenant, or warranty by Borrower or a default under this Note or in
connection with any other obligations of Borrower to Lender.

4. Application of Payments. All payments shall be applied first on
account of late charges, if any, then to Lender's costs of collection
(including, without limitation, reasonable attorneys' fees and expenses), if
any, then, to accrued and unpaid interest, and the balance to the reduction of
principal. For the purposes of computing interest on the debt evidenced hereby,
interest shall be calculated on the basis of a year consisting of three hundred
sixty (360) days, and shall be charged on the basis of the actual number of
calendar days that the principal amount advanced remains unpaid to the Lender.

5. Default; Remedies. If default be made in the performance of any
term, condition or covenant contained in this Note, or in connection with any
other obligations of Borrower to Lender, and such default shall not have been
cured under any cure provisions applicable to such default, then and in any such
event, the Obligations, in their entirety, shall at once become due and payable
at the option of the Lender without further notice. Failure of the Lender to
exercise the option to accelerate payment in the event of any default shall not
constitute a waiver of the right to exercise the same in the event of any
subsequent default.

6. Prepayment. The privilege is reserved to Borrower to prepay the
indebtedness evidenced hereby, in whole or in part, at any time or from time to
time, without prepayment premium or penalty, provided, however, that Borrower
shall provide prior written notice to Lender of the intent to prepay ten (10)
business days in advance of such prepayment.

7. Attorney's Fees. In the event counsel is employed by the Lender to
enforce the provisions of this Note, Borrower shall pay upon demand reasonable
attorneys' fees so incurred by Lender, and all other costs and expenses
connected with such enforcement.

8. Waivers. The Borrower hereby waives presentment, protest and demand,
notice of protest and notice of dishonor of this Note.

2
<PAGE>

9. Notices. All notices hereunder shall be given in writing and shall
be effective (a) five (5) days after being mailed by first class and certified
or registered mail, return receipt requested, with proper postage prepaid or (b)
two (2) business days after being delivered to an established over-night
delivery service, with costs for "next day" delivery prepaid, addressed in
either case, if to the Borrower at the address provided at the end of this Note;
and addressed if to the Lender at ValorInvest Ltd., 29 Quai des Bergues, Geneva,
Switzerland 1201, Attention: Mr. Pierre Besuchet, with a copy to Powell,
Goldstein, Frazer & Murphy LLP, 1001 Pennsylvania Avenue, NW., Suite 600,
Washington, DC 20004, attention: Michael H. Chanin, Esquire, or in either case
to such other address as such party may from time to time designate to the other
by like written notice given at least ten (10) days prior to the date such
change becomes effective.

10. Severability. In the event any provision (or any part of any
provision) contained in this Note shall for any reason be finally held by a
court of competent jurisdiction to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision (or remaining part of the affected provision) of this Note; but
this Note shall be construed as if such invalid, illegal or unenforceable
provision (or part thereof) had never been contained herein, but only to the
extent it is invalid, illegal or unenforceable.

11. Successors and Assigns. This Note shall apply to and bind the
Borrower and the Lender and each of their respective successors. This Note is
non-negotiable and may not be assigned by Lender.

12. Commercial Purpose. The Borrower warrants that the loan evidenced
by this Note is being made solely to acquire or carry on a business or
commercial enterprise, and that the Borrower is a business or commercial
organization. The Borrower further covenants that the loan evidenced by this
Note shall be construed for all purposes as a commercial purpose loan.

13. Time is of the Essence. Time is of the essence as to each and every
provision of this Note.

14. Governing Law and Choice of Forum. This Note will be governed by
and construed in accordance with the internal laws of Switzerland. The Borrower
agrees that any appropriate court located in Geneva will have exclusive
jurisdiction of any case or controversy arising under or in connection with this
Note and will be a proper forum in which to adjudicate such case or controversy.
The Borrower expressly consents to personal jurisdiction and venue in such
courts.

SIGNATURES APPEAR ON THE FOLLOWING PAGE

3
<PAGE>

WITNESS the execution hereof by the Borrower on the date first
hereinabove written, with the intent that this shall be an instrument under
seal.

BORROWER:

WITNESS: GEOTECK INTERNATIONAL, INC.
1177 West Hastings Street, Suite 1818
Vancouver, B.C. V6E 2K3

By: (SEAL)
- ----------------------------------- ----------------------------------
Name Name:
Title:

Bank Wiring Instructions

-------------------------------------

<PAGE>

ADDENDUM TO LOAN AGREEMENT

Reference is made to the Loan Agreement as of March 12, 1998, between
ValorInvest Ltd., an Irish Corporation, and Marine Shuttle Operations, Inc.
(formerly Geoteck International, Inc.), a Nevada corporation (the "Loan
Agreement"). All capitalized terms used and not defined herein will have the
meanings assigned to such terms in the Loan Agreement.

The Loan Agreement is hereby amended in the following respects:

(i) Lender will provide the Borrower with a Loan of up to US$ 2,500,000.

(ii) The additional loan of US$ 1,000,000 shall be evidenced by Borrower's
non-negotiable promissory note containing the same terms as the
Borrower's non-negotiable promissory note dated March 12, 1998.

With the exception of the foregoing modifications to the Loan Agreement, the
terms of the Loan Agreement remain unchanged and in full force and effect.

EXECUTED AS OF AUGUST 27, 1998

VALORINVEST LTD.

/s/ Pierre Besuchet
------------------------------------
By: Pierre Besuchet
Title: Director and Secretary

MARINE SHUTTLE OPERATIONS, INC.

/s/ Franz Eder
------------------------------------
By: Franz Eder
Title: President

<PAGE>

NON-NEGOTIABLE PROMISSORY NOTE

U.S. $1,000,000.00 August 27, 1998

FOR VALUE RECEIVED, the undersigned MARINE SHUTTLE OPERATIONS, INC.
("Borrower"), does hereby promise to pay to the order of VALORINVEST LTD.
("Lender"), with offices at 29 Quai des Bergues, Geneva, Switzerland 1201, and
at said offices or at such other place or places as the holder hereof may from
time to time designate in writing, the principal sum of ONE MILLION AND 00/100
UNITED STATES DOLLARS (U.S. $1,000,000), or so much thereof as shall have been
advanced hereunder by Lender to Borrower together with interest thereon as
provided below.

(a) The Obligations shall be repaid in full upon the consummation of
any Borrower public offering of at least One Hundred Million Dollars
($100,000,000) in gross proceeds; or

(b) If not sooner paid (whether by acceleration or otherwise), the
entire balance of the Obligations shall be due and payable on December
31, 1998.

(a) Borrower shall have executed and delivered this Note to the Lender.

(b) All representations and warranties made by Borrower in this Note
shall be true, complete and correct on and as of the date of the making
of any advance

<PAGE>

hereunder as though such representations and warranties were made anew
on such date.

8. Waivers. The Borrower hereby waives presentment, protest and demand,
notice of protest and notice of dishonor of this Note.

<PAGE>

being delivered to an established over-night delivery service, with costs for
"next day" delivery prepaid, addressed in either case, if to the Borrower at the
address provided at the end of this Note; and addressed if to the Lender at
ValorInvest Ltd., 29 Quai des Bergues, Geneva, Switzerland 1201, Attention: Mr.
Pierre Besuchet, with a copy to Powell, Goldstein, Frazer & Murphy LLP, 1001
Pennsylvania Avenue, NW., Suite 600, Washington, DC 20004, attention: Michael H.
Chanin, Esquire, or in either case to such other address as such party may from
time to time designate to the other by like written notice given at least ten
(10) days prior to the date such change becomes effective.

11. Successors and Assigns. This Note shall apply to and bind the
Borrower and the Lender and each of their respective successors. This Note is
non-negotiable and may not be assigned by Lender.

13. Time is of the Essence. Time is of the essence as to each and every
provision of this Note.

SIGNATURES APPEAR ON THE FOLLOWING PAGE

<PAGE>

WITNESS the execution hereof by the Borrower on the date first
hereinabove written, with the intent that this shall be an instrument under
seal.

BORROWER:

WITNESS: MARINE SHUTTLE OPERATIONS, INC.
4410 Montrose Boulevard
Houston, Texas 77006, U.S.A.

By: (SEAL)
- ----------------------------------- ---------------------------------
Name Name: Franz Eder
Title: President

Bank Wiring Instructions

------------------------------------

<PAGE>

SECOND ADDENDUM TO LOAN AGREEMENT

Reference is made to the Loan Agreement as of March 12, 1998, between
ValorInvest Ltd., an Irish Corporation, and Marine Shuttle Operations, Inc.
(formerly Geoteck International, Inc.), a Nevada corporation (the "Loan
Agreement") and to the Addendum to Loan Agreement as of August 27, 1998 (the
"First Addendum"). All capitalized terms used and not defined herein will have
the meanings assigned to such terms in the Loan Agreement and the First
Addendum.

The Loan Agreement and the First Addendum is hereby amended in the following
respects:

(i) Lender will provide the Borrower with a Loan of up to US$ 3,500,000.

With the exception of the foregoing modifications to the Loan Agreement and the
First Addendum, the terms of the Loan Agreement and the First Addendum remain
unchanged and in full force and effect.

EXECUTED AS OF SEPTEMBER 24, 1998

VALORINVEST LTD.

------------------------------------
By: Pierre Besuchet
Title: Director and Secretary

MARINE SHUTTLE OPERATIONS, INC.

------------------------------------
By: Franz Eder
Title: President

<PAGE>

NON-NEGOTIABLE PROMISSORY NOTE

U.S. $1,000,000.00 September 24, 1998

(a) The Obligations shall be repaid in full upon the consummation of
any Borrower public offering of at least One Hundred Million Dollars
($100,000,000) in gross proceeds; or

(b) If not sooner paid (whether by acceleration or otherwise), the
entire balance of the Obligations shall be due and payable on December
31, 1998.

(a) Borrower shall have executed and delivered this Note to the Lender.

(b) All representations and warranties made by Borrower in this Note
shall be true, complete and correct on and as of the date of the making
of any advance

<PAGE>

hereunder as though such representations and warranties were made anew
on such date.

8. Waivers. The Borrower hereby waives presentment, protest and demand,
notice of protest and notice of dishonor of this Note.

<PAGE>

11. Successors and Assigns. This Note shall apply to and bind the
Borrower and the Lender and each of their respective successors. This Note is
non-negotiable and may not be assigned by Lender.

13. Time is of the Essence. Time is of the essence as to each and every
provision of this Note.

SIGNATURES APPEAR ON THE FOLLOWING PAGE

<PAGE>

WITNESS the execution hereof by the Borrower on the date first
hereinabove written, with the intent that this shall be an instrument under
seal.

BORROWER:

WITNESS: MARINE SHUTTLE OPERATIONS, INC.
4410 Montrose Boulevard
Houston, Texas 77006, U.S.A.

By: (SEAL)
- ------------------------- -----------------------------
Name Name: Franz Eder
Title: President

Bank Wiring Instructions

--------------------------------------------

<PAGE>

Exhibit 10.12

LOAN AGREEMENT

THIS LOAN AGREEMENT (this "Agreement") is made on May 13, 1998
between Geoteck International, Inc., a Nevada corporation, ("Lender") and
Marine Shuttle Operation AS, a Norway corporation ("Borrower").

Whereas the parties entered into a Stock Purchase Agreement as of February
19,1998 inter alia providing for that Lender shall receive a bridge financing
up to US$ 1,500,000 from Borrower.

Whereas the parties intend to formalize the terms and conditions of the
bridge financing.

Now therefore the parties agree as follows:

1. Loan. Lender will provide the Borrower with a loan in the amount
of up to US$ 1,500,000 (,,Loan") payable to the Borrower in installments as
mutually agreed upon by the parties.

2. Interest. The Loan shall bear interest at a rate of six percent
(6 %) p. a. payable at the end of the Term (as defined below).

3. Term and Termination. The term of the Loan shall commence on the
date of the first payment of the Loan to Borrower and will continue for an
indefinite period of time. This Agreement will terminate on the closing date
of the financing as described in section 1.5 of the Stock Purchase Agreement
dated February 19, 1998 between the parties or, in any event, December
31,1998 at the latest.

4. Repayment of Loan. Upon termination of this Agreement for any
reason, the Borrower will promptly repay the Loan to the Borrower.

5. Notice. All notices, requests, demands and other communications
required or permitted hereunder must be in writing and deemed given and
effective when personally delivered or sent by facsimile with confirmation of
receipt or when deposited in the mail with postage prepaid to the party to
which the same is directed at the following addresses (or at such other
addresses as will be given in writing by the parties to one another):

<PAGE>

<S> <C>
To the Borrower: Marine Shuttle Operation AS
Attention: Mr. Sverre Hanssen
Luramyrveien 23, 4300 Sandnes, Norway
Tel: 47-51-63 88 00
Fax: 47-51-63 16 20

To the Lender: Geoteck International, Inc,
Attention: Mr. Franz Eder
1177 West Hastings Street, Suite 1818
Vancouver, B. C. V6E 2K3
Tel: 604-683-9161
Fax: 604-687-6755
</TABLE>

6. Miscellaneous.

(a) Assignment. The parties may not assign any rights or
delegate any duties they have assumed hereunder without the prior written
consent of the other party. This Agreement is personal to the the parties.

(b) Governing Law and Choice of Forum. This Agreement will
be governed by and construed in accordance with the internal laws of Norway.
The parties agree that any appropriate court located in Oslo will have
exclusive jurisdiction of any case or controversy arising under or in
connection with this Agreement and will be a proper forum in which to
adjudicate such case or controversy. The parties expressly consent to
personal jurisdiction and venue in such courts.

(c) Entire Agreement/Amendment. This Agreement embodies the
entire agreement of the parties hereto relating to the subject matter hereof
and supersedes all oral agreements, and to the extent inconsistent with the
terms hereof, all other written agreements. This Agreement may not be
modified, amended, supplemented or terminated except by a written instrument
executed by all parties hereto.

<PAGE>

(d) Severability. Each of the covenants and agreements
herein above contained will be deemed separate, severable and independent
covenants, and in the event that any covenant will be declared invalid by any
court of competent jurisdiction, such invalidity will not in any manner
affect or impair the validity or enforceability of any other part or
provision of such covenant or of any other covenant contained herein.

(e) Captions and Section Headings. Captions and section
headings used herein are for convenience only and are not a part of this
Agreement and will not be used in construing it.

(h) Fax Execution. This Agreement may be executed by
delivery of executed signature pages by fax and such fax execution will be
effective for all purposes.

EXECUTED AS OF MAY 13, 1998

[Lender]

/s/ Franz Eder
------------------------------------
By: Franz Eder
Title: President

[Borrower]

/s/ Sverre Hanssen
------------------------------------
By: Sverre Hanssen
Title: Chairman of the Board

<PAGE>

Exhibit 23(a)

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" and to
the use of our report relating to the Marine Shuttle Opertions Inc. (formerly
Geoteck International, Inc.) dated October 13, 1998, in the Registration
Statement on Form S-1, Amendment No. 1, and related Prospectus of Marine
Shuttle Operations Inc. (formerly Geoteck International, Inc.)

/s/ Deloitte & Touche

Chartered Accountants
Vancouver, British Columbia, Canada

October 13, 1998

<PAGE>
EXHIBIT 23(B)

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of Marine Shuttle
Operations Inc. (formerly Geoteck International, Inc.) on Form S-1, Amendment
No. 1, of (i) our report relating to Marine Shuttle Operations AS dated June 25,
1998, and (ii) our report relating to Offshore Shuttle AS dated June 25, 1998,
each of which appear in the Prospectus, which is part of this Registration
Statement.

We also consent to the reference to us under the heading "Experts" in such
Prospectus.

/s/ Deloitte & Touche
DELOITTE & TOUCHE
Oslo, Norway
October 13, 1998

<PAGE>
EXHIBIT 23(D)

October 8, 1998

Board of Directors
Marine Shuttle Operations Inc.
4410 Montrose Blvd.
Houston, Texas 77006

Re: Marine Shuttle Operations, Inc. (the "Company")

Gentlemen:

We consent to the reference made to us under the captions "Risk
Factors--Uncertain Proprietary Protection" and "Business--Proprietary
Protection" in the Prospectus constituting part of the Company's Registration
Statement on Form S-1.

Very truly yours,

/s/ Bryns Patentkontor A/S
Bryns Patentkontor A/S

<PAGE>

Exhibit 99
- ------------------------------------------------------------------------------

[LOGO]

STATEMENT OF APPROVAL

OFFSHORE SHUTTLE

The vessel concept "Offshore Shuttle" is found technical feasible by
DNV for transport and removal of:

- Offshore platform deck structures.

- Jackets.

The basis for our "Statement of Approval" is described in our report
DNV-97-3443. Limitations regarding deck/jacket weights, waterdepths,
etc. are also indicated in the report DNV-97-3443.

Oslo, 97-06-20

Knut Skaar Per Oystein Alvaer

Knut Skaar Per Oystein Alvaer
Head of Section Principal Marine Surveyor

- ------------------------------------------------------------------------------
It is agreed that save as provided below Det Norske Veritas, its
subsidiaries, bodies, officers, directors, employees and agents shall have no
liability for any loss, damage or expense allegedly caused directly or
indirectly by their mistake or negligence, breach of warranty, or any other
act, omission or error by them, including gross negligence or wilful
misconduct by any such person with the exception of gross negligence or
wilful misconduct by the governing bodies or senior executive officers of Det
Norske Veritas. This applies regardless of whether the loss, damage or
expense has affected anyone with whom Det Norske Veritas has a contract or a
third party who has acted or relied on decisions made or information given by
or on behalf of Det Norske Veritas. "However, if any person uses the
services of Det Norske Veritas or its subsidiaries or relies on any decision
made or information given by or on behalf of them and in consequence suffers
a loss, damage or expense proved to be due to their negligence, omission or
default, then Det Norske Veritas will pay by way of compensation to such
person a sum representing his proved loss." In the event Det Norske Veritas
or its subsidiaries may be held liable in accordance with the sections above,
the amount of compensation shall under no circumstances exceed the amount of
the fee, if any, charged for that particular service, decision, advice or
information." Under no circumstances whatsoever shall the individual or
individuals who have personally caused the loss, damage or expense be held
liable." In the event that any provision in this section shall be invalid
under the law of any jurisdiction, the validity of the remaining provisions
shall not in any way be affected.
- ----------------------------------------------------------------------------
DET NORSKE VERITAS CLASSIFICATION AS, VERITASVEIEN 1, N-1322 HOVIK, NORWAY,
TEL. INT: +47 67 57 99 00, TELEFAX: +47 67 57 99 11

<PAGE>

---------------------------------------

T E C H N I C A L R E P O R T

---------------------------------------

- -----------------------------------------------------------------

Client: Offshore Shuttle a.s.

- -----------------------------------------------------------------

Title of Report: Feasibility Verification of Offshore Shuttle

- -----------------------------------------------------------------

Report No.: DNV-97-3443

- -----------------------------------------------------------------

<PAGE>

[LOGO] DET NORSKE VERITAS

REPORT

- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Date Dept./Sec. Project No. Type of Report
9 October, 1997 DN770 77047057 Technical

- ----------------------------------------------------------------------------------------------------

Approved by Client, Sponsor Client's ref.
for Det Norske Veritas AS
Offshore Shuttle a.s.

Knut Skaar

- ----------------------------------------------------------------------------------------------------

Summary

The Offshore Shuttle is a vessel prototype primarily intended used for removal, installation and
transportation of jackets, decks and other offshore structures. Offshore Shuttle A/S requested
DNV, by DN-770 (VMO), in February 97 to do a feasibility verification of the shuttle concept.

From March through beginning of June VMO have reviewed engineering documentation, performed own
calculations, attended model testing and meetings. Based on the obtained information we have found
the technical feasibility of the shuttle documented, and hence we have issued a "Statement of
Approval". The current report describes/discuss the basis and limitations for that statement.

- ----------------------------------------------------------------------------------------------------

DNV Report No. Subject Group 4 Indexing terms
97-3443

- ---------------------------------------------------------- -------------------------------------
Title of Report Removal
----------------------------------
FEASIBILITY VERIFICATION OF Offshore Shuttle
OFFSHORE SHUTTLE ----------------------------------
Feasibility
----------------------------------
Vessels
- ---------------------------------------------------------- ----------------------------------
Distribution statement:

/X/ No distribution without permission from / / Limited distribution within / / Unrestricted
the responsible department/client Det Norske Veritas AS

- ----------------------------------------------------------------------------------------------------
Work carried out by Work verified by

Per Oystein Alvaer Henrik Sverdrup

- ----------------------------------------------------------------------------------------------------
Date of last revision Rev. No. Number of pages

September 3, 1997 A 11

- ----------------------------------------------------------------------------------------------------
It is agreed that save as provided below Det Norske Veritas, its subsidiaries, bodies, officers,
directors, employees and agents shall have no liability for any loss, damage or expense allegedly
caused directly or indirectly by their mistake or negligence, breach of warranty, or any other
act, omission or error by them, including gross negligence or wilful misconduct by any such person
with the exception of gross negligence or wilful misconduct by the governing bodies or senior
executive officers of Det Norske Veritas. This applies regardless of whether the loss, damage or
expense has affected anyone with whom Det Norske Veritas has a contract or a third party who has
acted or relied on decisions made or information given by or on behalf of Det Norske Veritas.
This applies regardless of whether the loss, damage or expense has affected anyone with whom
Det Norske Veritas has a contract or a third party who has acted or relied on decisions made or
information given by or on behalf of Det Norske Veritas. "However, if any person uses the services
of Det Norske Veritas or its subsidiaries or relies on any decision made or information given by
or on behalf of them and in consequence suffers a loss, damage or expense proved to be due to their
negligence, omission or default, then Det Norske Veritas will pay by way of compensation to such
person a sum representing his proved loss". In the event Det Norske Veritas or its subsidiaries may
be held liable in accordance with the sections above, the amount of compensation shall under no
circumstances exceed the amount of the fee, if any, charged for that particular service, decision,
advice or information. "Under no circumstances whatsoever shall the individual or individuals who
have personally caused the loss, damage or expense be held liable." In the event that any provision
in this section shall be invalid under the law of any jurisdiction, the the validity of the
remaining provisions shall not in any way be affected.

- ----------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

- -------------------------------------------------------------------------------

TABLE OF CONTENTS

1 INTRODUCTION ..................................................... 4

2 DESIGN BASIS ..................................................... 5

2.1 Rules and Regulations .......................................... 5

2.2 Environmental Conditions ....................................... 5

2.3 Accept Criteria ................................................ 5

3 RECEIVED DOCUMENTATION ........................................... 6

3.1 General ........................................................ 6

3.2 Design Basis ................................................... 6

3.3 Drawings ....................................................... 6

3.4 Environmental Loads ............................................ 6

3.5 Operational Procedures ......................................... 7

3.6 Ballast Calculations/Procedures and Stability .................. 7

3.7 Global Strength ................................................ 7

3.8 Local Strength ................................................. 8

4 DISCUSSION & CONCLUSIONS ......................................... 9

4.1 General ........................................................ 9

4.2 Assumptions .................................................... 9

4.3 Document Review ................................................ 9

4.4 Shuttle Strength ............................................... 9

4.5 Buoyancy and Stability ......................................... 10

4.6 Operational Feasibility ........................................ 10

4.7 Future Engineering Work ........................................ 10

5 REFERENCES ............................................................. 11
</TABLE>

- ------------------------------------------------------------------------------
Page 3 of 11

DET NORSKE VERITAS AS

<PAGE>

- -------------------------------------------------------------------------------

1 INTRODUCTION

The offshore Shuttle is a vessel primarily intended used for removal and
installation including transportation to/from shore of jackets, decks,
"Spares", and other offshore structures. The prototype vessel main
construction is tubulars with 10m diameter. Length, breadth, and height
are respectively 200m, 70m and 60m.

Offshore Shuttle A/S requested DNV, by DN-770 (VMO), in February 97 to
do a feasibility verification of the shuttle concept for the removal
option. The DNV verification has been based on documentation received from
March through the beginning of June 97, see section 5.

On June 20 our review work was completed and we issued a "Statement of
Approval". Our statement referred to a report that at the time was a draft
for internal use only. This document is the updated version of our draft
report. The report describes/discuss the basis and limitations for our
"Statement of Approval".

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2 DESIGN BASIS

2.1 Rules and Regulations

The shuttle is a rather special vessel and how/where to obtain
statutory approval was not clearly defined at the time of our feasibility
review. Hence, no specific governmental rule/regulation has been defined
as basis for the shuttle feasibility verification.

Our feasiblity verification is based on the general requirements to
marine operations defined in Ref. /1/.

2.2 Environmental Conditions

The weather criteria have been chosen based on unrestricted operations
for towing phase(s), and weather restricted operations for offshore
removal. See Ref. /1/Pt.1 Ch.2 Sec.3.1.3 for definitions of restricted/
unrestricted operations. Winter operations in the North Sea have been
regarded as unlikely and the transportation criteria are hence based on
North Sea summer season data.

The design waves used are,

1) transportation: Hs = 8.0m, Tz range = 7.4s through 15.5s, and
2) offshore operation: Hs = 2.5m, Tz range = 4.0s through 13.0s.

2.3 Accept Criteria

The purpose of our review was to verify the technical feasibility of
the offshore shuttle concept. In order to meet this objective we
required:

1) adequate structural strength of the shuttle,
2) sufficient buoyancy and stability of the shuttle and
3) that the operations can be carried out safely with the
described equipment and procedures

to be documented for all phases.

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3. RECEIVED DOCUMENTATION

3.1 General

In this section we have listed the reviewed documentation, on which we
have based our feasibility verification. The main results of our review,
including some comments to the documentation, have been given. We assume
our comments will be dealt with in the ongoing development of the
shuttle design. However, we do not forsee that this will imply the need
for any major design modifications. Hence, the comments should be
regarded as to have insignificant impact on the technical feasibility
of the offshore shuttle concept.

3.2 Design Basis

Ref. /2/ describes the design basis for the shuttle. The document is
found adequate to form the basis for a feasibility study.

3.3 Drawings

No design drawings of the shuttle have been available. Our feasibility
verification is based on sketches (layout drawings) indicating main
dimensions. As the breadth are not finalised, i.e. 64m applied in Ref.
/5/ and 73m in /6/, we have assumed 70m in our own estimates for
weight, buoyancy and stability. Mean wall thickness (20mm) and typical
ring stiffener dimensions have been assumed as indicated in the
engineering reports.

3.4 Environmental Loads

Ref. /4/ includes wave motion/loading calculations for offshore
operations and transport conditions. Model test results have been
presented in Ref. /5/. The reports do indicate that the shuttle motions
characteristics are rather favourable. Hence, we do not expect any
problems for the detail design of positioning guides, supports and
seafastening for deck/jacket removal and transport.

The following should be considered in future analysis:

1) Clarify the reason for selecting H=14.8m and T=13s for the
regular wave for structural analysis.

2) Atkins report states that the linear analysis under-predicts
tha RAO's for the shuttle motions. The action taken/recommended
due to this should be clarified.

3) Relationship between model test results and analysis should be
discussed.

4) Wave load calculations for the situations when the shuttle is
in contact with the jacket or the deck.

Ref. /6/ includes towage resistance calculations. The calculated
bollard pull requirements for transportation are considerably lower
than our own estimates. E. g. the wind load calculations in Ref. /6/ do
not properly account for all the twelve shuttle columns, and the wave
drift force seems small.

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3.5 Operational Procedures

Outline procedures describing the main activities required to fulfil
the intention of the Shuttle are given in Ref./3/. We find that the
procedures show that it should be possible to achieve the operational
requirements. However, detailed procedures are needed for each
specific project.

3.6 Ballast Calculations/Procedures and Stability

Ref./7/includes stability calculations for various steps for two
different jacket sizes. The calculations indicate that it should be no
problem to fulfil applicable stability requirements. However, updated
ballast/stability calculations are needed for each specific project.

The following should be considered in future analysis:

1) To update the shuttle lightweight, i.e. 9000t have
been assumed while Ref./6/ indicates 16700t. (Note:
The "fixed ballast" applied in the model
test/upending analysis is not included in the 16700t
estimate).

2) To update the shuttle geometry and tank layout, i.e.
the stability calculations consider more tanks than
Ref./6/ indicates.

3) Include stability/ballast calculations for deck
lift-off.

Ref./8/ summarises the mechanical outfitting required. We have no
principal objections to the described outfitting, but some of the
"Redundancy Requirements" (i.e. minimum 50%) are unclear. In the
further development we recommend to refer to the applicable parts of
Ref./1/Pt.2 Ch.1 Sec.4.5.2 (Class 2 or 4).

3.7 Global Strength

The global strength has been verified for the transport condition in
Ref./10/. As mention in 3.4 we do not see that the selected wave(s)
necessarily gives maximum stresses. However, we agree with the main
conclusion that the areas in the shuttle structure with high stresses
are rather limited. These may therefore be reinforced without
significantly increasing the shuttle lightweight and hence without
effecting the feasibility.

The received documentation does not include global strength
calculations of the shuttle during offshore operations. However, with
adequate ballasting sequences we do not expect that offshore
operations should impose any critical global structural design cases.

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3.8 Local Strength

Ref. /9/ does include a calculation of maximum differential pressures
and a verification of tabular strength for these pressures. The
calculations indicate that it could be possible to obtain a mean wall
thickness of 20mm.

The following should be considered in future local strength analysis:

1) Include all stresses in the local buckling calculations.
2) Verify the design for local loads from support structures,
etc.
3) Calculations of tabular end shells and internal bulkheads.

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4 DISCUSSION & CONCLUSION

4.1 General

In addition to the document review described in 4.3 below our conclusion
is based on information received in meetings with Offshore Shuttle A/S
and model test attendance/video review. Our main assumptions have been
listed in sub-section 4.2.

Sub-sections 4.4 through 4.6 present our evaluations regarding the
"acceptance criteria" listed in 2.3. Some ideas regarding future
development are presented in 4.7.

4.2 Assumptions

Our conclusion regarding feasibility of the shuttle do include the
following main assumptions:

1) Jacket and deck weights will be within applicable limits, see 4.5
below.

2) A check to verify that jacket (and deck) dimensions are suitable
will be carried out for each project. See 4.7 below.

3) Water depth will be sufficient to operate the shuttle, see 4.7 below.

4) Evaluation of jacket cutting procedures has not been a part of our
scope of work. The maximum scheduled time indicated for this part of
the operation in Ref. /2/ is hence considered as a part of the basis
for our conclusion.

5) An adequate deck support structure for lift-off may be preinstalled
or installed within an applicable weather window.

6) Structural and equipment modifications on the shuttle will be
allowed/required as a part of the "detailed engineering".

4.3 Document Review

Our document review does not include a detailed verification of the
presented results. However, it has been verified, partly through our own
calculations, that the results are of "correct" magnitude.

4.4 Shuttle Strength

We find that the main dimensions and local design of the shuttle
tubulars have been proven adequate through the reviewed calculations.

As indicated in 3.7 and 3.8 there are still extensive structural
strength calculations to be done on the shuttle design. However, we do
not expect this engineering to effect the feasibility.

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4.5 Buoyancy and Stability

Requirements to buoyancy and stability will be the governing parameters
for the maximum weight of the objects to be transported. As there is some
discrepancies in the calculations, see 3.6, and CoG of the objects will
vary for each project, we have partly based our conclusion on our own
calculations/estimates.

The present transport calculations are made for a mean draft of 6.35m,
and with this draft the shuttle net buoyancy (without fixed ballast) is
20.000t. Depending on the jacket CoG some water ballast will be required
and the jacket weight should hence be less than 20.000t. However, we do not
see any principal problem to compensate this by increasing the shuttle
transport draft and hence the net buoyancy. For a reasonable jacket CoG the
stability should be adequate even with a draft of 8-9m.

The model testing and wave analysis for vertical positioning is done with
a draft of approximately 90m, representing a minimum waterdepth of
approximately 100m. Based on Ref./7/ and our own estimates we do expect
the shuttle buoyancy/stability to be sufficient to upend a 20,000t jacket
from this depth.

Capacity for deck lift-off will depend on VCG of the deck and
required minimum draft of the shuttle. Hence, detailed procedures are
needed for each specific project.

4.6 Operational Feasibility

As mentioned in 3.5 the operational outline marine procedures are found
adequate. It should be noted that the shuttle operational feasibility is
depending on that our assumptions 4) and 5) in 4.2 can be met.

4.7 Future Engineering Work

We recommend that the following are considered in the future engineering
work:

1) Development design drawings including a revision control system.

2) Improve the co-ordination of the engineering work. E.g. by establishing
a main engineering report referring to other applicable reports.

3) Based on possible projects, clearly define the shuttle design capacity
limitations, i.e. jacket/deck weight/CoG/dimensions and water depth
range.

4) Considering applicable class and statutory requirements define extent
of engineering required as basis for construction of the shuttle.

5) Elaborate/detail all procedures that may influence the shuttle design.

6) Define additional engineering required for each specific project
based on applicable marine operation rules, e.g. Ref./1/.

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5 REFERENCES

/1/ DET NORSKE VERITAS: Rules for Planning and Execution of Marine
Operations, January 1996.

/2/ OFFSHORE SHUTTLE A/S: OSAS-97-001, "Offshore Shuttle--Design Basis and
Design Brief", dated 6 March 1997.

/3/ OFFSHORE SHUTTLE A/S: "Marine Operations" dated 4 June 1997.

/4/ WS ATKINS: L4632/RPT/01, "Hydrodynamic Analysis"

/5/ SSPA - MARINE CONSULTING: 974120-1, "Offshore Shuttle - Model Test in
Regular Waves and irregular Seas"

/6/ HARLAND AND WOLFF: Project No. HW 98591. Offshore Shuttle A/S - Owner's
Offshore Vessel Design, Outline Report on Constructability, Regulatory,
Resistance Aspects. (Fax dated June 4, 1997)

/7/ OFFSHORE DESIGN A.S: OD-97-026, "Offshore Shuttle - Stability
Analysis", dated April 2 - 1997.

/8/ OFFSHORE SHUTTLE A.S: Design Summary Mechanical Outfitting.

/9/ OFFSHORE SHUTTLE A.S: Fax dated May 16, 1997: Dimensioning of Tubulars
to Resist Differential Pressure.

/10/ TEKNISK DATA AS: R165-01, "Offshore Shuttle - Global Stress Analysis
Based on Time Domain Wave Loading", dated May 21, 1997.

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BERLINER EFFEKTENBANK AG Kurfurstendamm 119 10711 Berlin

Exhibit 99.1
[logo]

Christiana Markets
Christiana Bank og Kreditkasse ASA
Mr. Christian L. Holst
P.O. Box 1166 Sentrum
0107 Oslo

NORWAY

FAX: 0047-22 69 05 09

_______________, 1998

RE: MARINE SHUTTLE OPERATIONS INC.

SELECTED DEALERS AGREEMENT BETWEEN BERLINER EFFEKTENBANK AG (THE
"UNDERWRITER") AND CHRISTIANA MARKETS ("YOU")

Dear Mr. Holst,

THE PUBLIC OFFERING

OFFERING BY SELECTED DEALERS

The Underwriter is offering part of the Securities for sale through certain
dealers (the "Selected Dealers") at the public offering price less a
concession (the "Selected Dealers Concession") not in excess of 5 per cent
for each Share, subject to the terms and conditions herein and in the
Prospectus and subject to modification and cancellation of the offering
without notice. Sales of Shares by You pursuant to such offering shall be
evidenced by the Underwriter's written confirmation and shall be on the terms
and

<PAGE>

conditions set forth herein. In selling Shares, you shall not rely upon any
statement whatsoever, written or oral, other than statements contained herein
and in the Registration Statement.

If you desire to apply act as a Selected Dealer primarily in the Norwegian
market and sell any of the Shares, please sign and return to the Underwriter
the enclosed copy of this letter, even though You may have advised the
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efforts to fill any subscriptions You may submit. The Underwriter reserves
the right to reject all subscriptions in whole or in part, to make
allotments, and to close the subscription book at any time and without
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CONDUCT OF OFFERING

On becoming Selected Dealer and in offering and selling the Shares, You agree
to comply with the applicable requirements of the Act and the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). As a Selected Dealer
You shall be supplied with such quantities of the Prospectus as, from time to
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OFFERING BY SELECTED DEALERS

Shares sold by You must be offered in conformity with the terms of the
offering set forth in the Prospectus.

PAYMENT AND DELIVERY

All subscription amounts for Shares purchased through You shall be deposited
with the Underwriter no later than noon on the business day next following
their receipt to be held in escrow by the Underwriter as Agent for the
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The Selected Dealers Concession payable to You hereunder shall be paid
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RELATIONSHIP OF SELECTED DEALERS AND THE UNDERWRITER

You are not authorized to, and you agree not to give any information or to
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as as agent or sub-agent for the Underwriter. Nothing herein shall constitute
the Selected Dealers as an association, unincorporated business or other
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shall be liable for the Underwriter's proportionate share of any tax,
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NOTICES

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B E R L I N E R E F F E K T E N B A N K A G

Dr. Guido Sandler Dr. Wolfgang Janka

Confirmed and accepted as of
the date first above written.

Christiana Markets
Christiana Bank og Kreditkasse ASA

_________________________