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Odyssey Marine Exploration Announces Third Quarter 2006 Results

Tampa, FL - November 3, 2006 - Odyssey Marine Exploration (AMEX: OMR) Inc., a leader in the field of deep-ocean shipwreck exploration, today filed a quarterly report with the Securities and Exchange Commission detailing results of the Company's third quarter 2006.

For the third quarter, Odyssey reported revenue of $.6 million compared to $1.0 million in the third quarter 2005. Actual sales were $1.0 million compared to $1.0 million in the third quarter 2005 before allowing for a one-time return from a coin dealer. The Company also reported a net loss of $6.2 million, compared to a net loss of $3.1 million in the third quarter 2005. The net loss per share for the third quarter 2006 was $.13, compared to a net loss of $.07 in the third quarter 2005.

"Despite disappointing quarterly financials, we are making substantial progress in key areas of our business, particularly in our core business of shipwreck search and discovery. We are very pleased by the productivity and progress achieved during our second 'Atlas' search season, with 161 total shipwrecks located, including at least one that may be one of our targeted wrecks. We also look forward to resuming operations on the Sussex project. Finally, we significantly reduced marketing and general administrative expenses, increased the efficiency of our direct sales capabilities, and added new sales channels that will serve as an excellent distribution framework for our next high-value shipwreck find," said John C. Morris, Odyssey's Chairman and CEO.

Third Quarter 2006 Results REVENUE

Revenues for the third quarter 2006 were $.6 million, compared to $1.0 million in the third quarter 2005, representing sales volume of gold and silver coins of approximately 868 coins in 2006 and 198 coins in 2005. Exclusive of returns, actual sales for the third quarter of 2006 were $1.0 million compared to $1.0 million in 2005.

Revenues are generated primarily through the sale of gold and silver coins, but also include other artifacts and merchandise sales. While Odyssey continues to sell numismatic coins directly to independent coin dealers, there was a significant shift beginning in the second quarter 2006 to outsource direct sales efforts to an experienced marketing partner. This move has already resulted in the majority of silver coin sales in 2006. This outsourcing initiative also resulted in a substantial reduction of the Company's overhead costs associated with maintaining an inbound and outbound direct call center.

Odyssey has also begun to test a variety of advertising methods and mediums that are showing promise and positive returns on investment.


Operations and research expenses in the third quarter 2006 were $5.1 million, compared to $3.8 million in the third quarter 2005. Of the $1.3 million increase, $.9 million was due to vessel operating expenses primarily associated with the Company's new search and inspection vessel purchased in June 2006, and $.4 million due to operations costs of Odyssey's themed attractions segment, mostly associated with the now-closed New Orleans attraction.

As a result of our lease termination in New Orleans, we accelerated the estimated useful lives of certain fixed assets, leasehold improvements and future rent payments, to September 30, 2006. This acceleration resulted in additional expenses of $.7 million in September 2006 when it was closed.

Marketing, general and administrative expenses were $1.3 million in the third quarter 2006, compared to $2.3 million in the third quarter 2005. The decrease of $1.0 million was primarily related to lower marketing and employee costs attributed to the closing of the Company's direct sales call center in May 2006 ($.5 million) and other general corporate expense reductions.


In the past, Odyssey has occasionally disclosed information concerning each of its existing and planned search operations. As the Company may have entered into agreements with parties who have provided information regarding targets, and in order to protect the identities of targets in Odyssey's operations, the Company will defer disclosing specific information relating to search targets or agreements until it has located targeted shipwrecks and determined the most appropriate course of action to protect Odyssey's property rights.

Ongoing Shipwreck Projects

The "Atlas" Project

Odyssey's primary operational focus during the summer and fall 2006 has been to survey and inspect targets in seven search blocks of Odyssey's "Atlas" project, which encompass the area believed to contain the target of highest value, code-named "Tripoli." These search blocks overlapped with other "Atlas" targets, but were designed to completely cover the area believed to hold the "Tripoli."

The Company began search operations on the project during the 2005 season, and resumed operations in April 2006. During 2005, much of the area was searched with one pass with a high-resolution, side-scan sonar. During 2006, a second pass of the area was completed which included acoustic (side-scan) data and also a magnetometer data-stream which helped the Company create a large database of acoustic and magnetic information. Overlaying all three layers provided Odyssey with a high-resolution map of these seven search blocks. Once targets of interest were logged, additional high-resolution imagery and magnetometer surveys were utilized to further classify and map targets before Remotely Operated Vehicles (ROVs) were deployed to visually inspect and recover any artifacts deemed necessary for identification. During the 2006 survey period, at least two ships were mobilized to engage in the search operation, and during part of the summer, three ships were utilized. After the side-scan mapping was completed, Odyssey released the leased vessel employed during the past two "Atlas" seasons and it returned to its home port. Following is a summary of the operations conducted in the "Tripoli" search area:

  • Anomalies detected: 1,873
  • Anomalies selected for further inspections: 1,017
  • Shipwrecks located: 161
  • Modern/20th Century Shipwrecks: 124
  • 19th Century Shipwrecks: 25
  • 17th and 18th Century Shipwrecks: 12

More targets may yet be discovered during the balance of this year's search operations, as Odyssey continues final anomaly inspections. These activities are anticipated to be completed in this area during November 2006. These operations will also include photomosaics and preliminary excavations of sites of interest.

Odyssey filed a shipwreck arrest in the U.S. District Court for the Middle District of Florida in September 2006. On October 30, 2006, the U.S. District Court granted the Company's Motion for Preliminary Injunction appointing Odyssey as the exclusive finder-in-possession of the shipwrecked vessel, and prohibiting any interference with Odyssey's intended excavation of the site, believed to be a 17th century merchant vessel located outside the territorial waters of any country. However, until further ROV inspections and a preliminary archaeological excavation are completed on the arrested shipwreck site, the Company is not prepared to confirm the identity or potential value of the wreck.

The Odyssey Explorer is due in dry dock the first week of November 2006 for what is expected to be a relatively short class inspection and re-fitting of ZEUS. During that time, artifacts and data from the arrested site will be further analyzed. The Company may return to the site after the dry dock period, depending on the Sussex project schedule and weather conditions.

The Sussex Project

The Sussex was an 80-gun English warship lost in a severe storm in the western Mediterranean in 1694. Research suggests the Sussex was carrying a large cargo of coins when she sank. Odyssey believes it has located the shipwreck of the Sussex and signed an exclusive partnering agreement with the legal owner of the shipwreck, the Government of the United Kingdom, for the archaeological excavation of the shipwreck.

In late 2005 and early 2006, Odyssey completed to the satisfaction of the Government of the United Kingdom all work detailed in Phase 1A of the Sussex archaeological project plan. The Company also completed a portion of Phase 1B. (A public version of the project plan is available for viewing at

The Company temporarily halted operations on the project at the request of the Spanish Ministry of Foreign Affairs while issues relative to the archaeological plan for excavation of the site, territorial and cultural resource management issues were negotiated.

In March 2006, Odyssey submitted an archaeological plan to the Spanish Ministry of Foreign Affairs which addressed questions raised by the Government of the Autonomous Region of Andalucia in reference to the ongoing Sussex project. As part of this proposed plan, Odyssey agreed with the British Government to undertake additional survey operations in the area and to provide Spain with a detailed assessment of the region's underwater cultural heritage in deep water, as well as assistance in developing a plan for managing and protecting those resources.

In August, additional clarifications and a response to additional questions were provided at a meeting in Seville arranged by the Spanish Ministry of Foreign Affairs with representatives of the Government of Andalucia through the offices of the Embassy of the United Kingdom. As a result of that meeting, the outstanding matters were narrowed to three issues relating to site mapping, positional information, and formalization of the submission of the plan through the project archaeologists.

Odyssey is working closely with the offices of the Embassy of the United Kingdom and the United Kingdom's Ministry of Defence to address these final issues and anticipates they will be resolved in time to resume operations later this year.

Throughout the duration of this complicated multinational situation, the Spanish Ministry of Foreign Affairs, the United Kingdom Foreign and Commonwealth Office and Ministry of Defence, the United States Department of State, and representatives of the Autonomous Region of Andalucia have all contributed resources and attention to solving a complex series of issues relating to the Sussex project. While it has taken longer than anticipated to resolve these issues, Odyssey believes the results will translate to goodwill between all the parties and serve to provide a platform for future cooperation in underwater exploration and management of deep-ocean cultural heritage.

About Odyssey Marine Exploration

Odyssey Marine Exploration is an American Stock Exchange Company with several shipwreck projects in various stages of development throughout the world. Additional information about Odyssey, its projects, methodologies and technologies, is available at For additional information, please contact John McNeilly, Odyssey's Associate Director of Corporate Communications, at 813-876-1776.

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Odyssey Marine Exploration believes the information set forth in this press release may include "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. Certain factors that could cause results to differ materially from those projected in the forward-looking statements are set forth in "Risk Factors," and "Business" in the Company's annual report on Form 10-K for the year ended December 31, 2005, which has been filed with the Securities and Exchange Commission.
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