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United States Coast Guard Report of Investigation into the Circumstances Surrounding the Incident Involving L/B SUPERIOR CHALLENGE; Sinking On 06/30/2003 MISLE Activity Number: 1840641 Originating Unit: MSO MORGAN CITY MISLE Activity Owner: COMMANDANT (G-MRI) MISLE Activity Controller: COMMANDANT (G-MRI) MISLE Case Number: 0

I. INCIDENT BRIEF 32/113/03 46 CFR 4.40-5 (d)(2) - major marine casualty, loss of vessel >100GT On June 30, 2003, the liftboat SUPERIOR CHALLENGE was on location at Eugene Island 193- A, and was later secured for heavy weather and evacuated due to the approaching Tropical Storm Bill. The tropical storm caused the liftboat to capsize and sink. The owner of the liftboat, Superior Energy Services, have contracted Bisso Marine to salvage the SUPERIOR CHALLENGE. Duty investigator does not deem it necessary to enforce drug and alcohol testing on crewmembers; liftboat was evacuated prior to storm. Unknown damage amount. No pollution reported in area. LTJG Boris Towns MSO Morgan City Investigations (985) 380-5341 2

II. EXECUTIVE SUMMARY Incident Summary 32/113/03 46 CFR 4.40-5 (d)(2) - major marine casualty, loss of vessel >100GT On June 30, 2003, the liftboat SUPERIOR CHALLENGE was on location at Eugene Island 193- A, and was later secured for heavy weather and evacuated due to the approaching Tropical Storm Bill. The tropical storm caused the liftboat to capsize and sink. The owner of the liftboat, Superior Energy Services, have contracted Bisso Marine to salvage the SUPERIOR CHALLENGE. Duty investigator does not deem it necessary to enforce drug and alcohol testing on crewmembers; liftboat was evacuated prior to storm. Unknown damage amount. No pollution reported in area. LTJG Boris Towns MSO Morgan City Investigations (985) 380-5341 Incident Involved: Marine Casualty, Reportable Level of Investigation: Data Collection IMO Classification: Routine USCG Classification: Major Marine Casualty Was this a Serious Marine Incident? Yes Was a Marine Board Convened by Commandant? No Personnel Casualty Summary Total Missing (Active Search) = 0 Total Missing (Presumed Lost) = 0 Total Dead = 0 Total Injured = 0 Total Uninjured = 0 Total People at Risk = 0 Other Personnel (Not at Risk) = 0 Vessel(s) Status Summary Actual Total Loss(es) = 0 Total Constructive Loss, Salvaged = 0 Total Constructive Loss, Unsalvaged = 1 Damaged = 0 Undamaged = 0 Property Damage Summary/Total Damage 3

Vessel(s) = $ Cargo = $ Facility(s) = $ Other = $ * Includes estimates Waterway Mobility Summary Vessel Delays (including speed restrictions): None 4

III. ACTIONS IN RESPONSE TO THIS REPORT Actions on Recommendations Safety Alerts 5

IV. FINDINGS OF FACT Subjects of the Investigation Vessels. The following vessels were subjects of this investigation. Particulars for each vessel follow. Vessel Name: SUPERIOR CHALLENGE Flag: UNITED STATES Vessel Identification Number: 1052908 Call Sign: WDA5218 Status: Total Constructive Loss: Unsalvaged Role: Involved in a Marine Casualty Vessel Class, Type, Sub-Type: Gross Tonnage(GRT): Net Tonnage(NRT): Deadweight Tons: Length: 117 Home/Hailing Port: Keel Laid Date: 12/15/1996 Delivery Date: 06/12/1997 Place of Construction: LOCKPORT, LA.,, UNITED STATES Builder Name: BOLLINGER SHIPYARDS, INC. Propulsion: Diesel Reduction Horsepower: 1710 Master: Classification Society: Owner: CARDINAL SERVICES INC 3703 SOUTH LEWIS STREET PO DRAWER 9350 NEW IBERIA, LA, 70562 SUPERIOR ENERGY SERVICES LLC 5509 curtis lane Operator: Inspection Subchapter: Most Recent Vessel Inspection Activity: Current Certificate of Inspection: New Iberia, LA, 70560 US CARDINAL SERVICES INC 3703 SOUTH LEWIS STREET PO DRAWER 9350 NEW IBERIA, LA, 70562 I 1634045, 06/19/2002 2:37:00 PM Issued on 06/30/2000, by MSO MORGAN CITY 6

Facilities. The following facilities were subjects of this investigation. Particulars for each facility follow. Parties and Organizations. The following people and organizations were subjects of this investigation. SUPERIOR ENERGY SERVICES INC Status: Role: Email Address: Phone Number(NVDC Phone Number): Address(Primary Place of Business): Not at Risk Reporting Party 337-364-9704 5509 Curtis Lane Comments: New Iberia, LA 70560 US Drug and Alcohol Testing. The following people have been determined by the Coast Guard, Law Enforcement Personnel, and/or the Marine Employer to have been directly involved in a Serious Marine Incident as defined in 46 CFR 4.03-2: Response Resources. The following incident response resources were subjects of this investigation. Other Subjects. The following were subjects of this investigation. Waterway Segment(s). The following waterway segment(s) were subjects of this investigation. EUGENE ISLAND Role: Location Local Name: GULF OF MEXICO - EUGENE ISLAND Description: Location(s). Incident Information Description Latitude Longitude EUGENE ISLAND; Block 193-A 28 42.0 N 091 30.0 W Sequence of Events. 7

06/30/2003 17:00 to 06/30/2003 17:00 (Estimated): Event Type: Event Class: Event Subclass: Location: Known; US Waters Capsize Overwhelmed by Sea and/or Wind Description: EUGENE ISLAND; Block 193-A Latitude: 28 42.0 N Longitude: 091 30.0 W Subject(s) and Details: Name Type Status Role SUPERIOR CHALLENGE Vessel Total Constructive Loss: Unsalvaged Involved in a Marine Casualty Details Filed: Detail Description Refer to summary. 06/30/2003 17:45 to 06/30/2003 17:45 (Estimated): Event Type: Event Class: Event Subclass: Location: Known; US Waters Sinking Damage Control Efforts Not Possible Description: EUGENE ISLAND; Block 193-A Latitude: 28 42.0 N Longitude: 091 30.0 W Subject(s) and Details: Name Type Status Role SUPERIOR CHALLENGE Vessel Total Constructive Loss: Unsalvaged Involved in a Marine Casualty Details Filed: Detail Description Refer to summary. 8

V. CAUSAL ANALYSIS Initiating Event: The Initiating Event of the Incident Failures of Defense Against Subsequent Events in the Incident 9

VI. REFERRAL FOR ENFORCEMENT ACTION The following referrals for enforcement action have been made as a result of this investigation and represent those instances where the Coast Guard has gathered evidence that indicates one or more alleged violations or offenses may have occurred. Any determinations as to whether or not one or more actual violations or offenses have occurred are documented in the appropriate Coast Guard enforcement activities. 10

APPENDIX 1 - EVIDENCE 1840641 #001/BKT: Document/CG-2692 Report of Marine Accident, Injury or Death CG-2692 Report of Marine Accident, Injury or Death Collection Information: Date/Time: 07/09/2003 10:51:00 AM Location: Collected By: USCG Gathered;, Witnessed By: USCG Witness;, Tracking: Attachments: - 1.pdf; MSO MORGAN CITY; Towns, Boris K.; 07/09/2003; 11

APPENDIX 2 - CORRESPONDENCE 12