McDermott Comments on the Status of TXU Boiler Projects.

HOUSTON -- McDermott International, Inc. (NYSE:MDR) ("McDermott" or the "Company") announced that it has not received any notices from TXU Corporation ("TXU") pursuant to today's announcement that TXU has agreed to be acquired.

However, prior to the acquisition news, TXU had given notice

to McDermott's subsidiary, The Babcock & Wilcox Company ("B&W"), to suspend performance on five of the eight projects in Texas for the design and supply of supercritical coal-fired boilers and selective catalytic reduction systems. A notice of suspension is a client-initiated directive to wind down and suspend all work on the affected units until a notice of resumption or termination is issued. These suspended projects will remain in McDermott's backlog until TXU provides further notice.

For the suspended units, the contract(s) require that TXU compensate B&W for all work performed to date and for all costs associated with the suspension, storage and resumption. Also, under the terms of the contract, B&W is permitted to file claims for contract changes in all terms, including price and schedule should work resume. In the event of termination, the contract(s) provide for recovery of costs and a reasonable profit. B&W is continuing to perform on the remaining unsuspended units.

"We read TXU's press release this morning and their comments regarding reducing the number of plants. However, B&W has not received any official word today from TXU related to either the suspended units or the other three," said Bruce W. Wilkinson, Chairman and Chief Executive Officer of McDermott.

"B&W is a clear industry leader in improving emissions associated with the power generation market, including carbon capture technology," continued Wilkinson. "Regardless of the potential change in TXU's ownership or the status of these projects, we expect TXU will remain a valued customer."

McDermott International, Inc. is a leading worldwide energy services company. McDermott's subsidiaries provide engineering, construction, installation, procurement, research, manufacturing, environmental systems, project management and facility management services to a variety of customers in the energy and power industries, including the U.S. Department of Energy. Additional information on McDermott can be obtained at www.mcdermott.com.