McDermott Announces New Power Organization Led by John Fees; Provides Improved Customer Focus; Enhanced Product Offerings; Potential Synergies.

HOUSTON -- McDermott International, Inc. (NYSE:MDR) ("McDermott" or the "Company") announced today a strategic realignment of its businesses operating within the power industry. Effective January 1, 2007, the Company will consolidate its BWX Technologies, Inc. subsidiary ("BWXT") and The Babcock & Wilcox Company subsidiary ("B&W"), into a single entity operating as The Babcock & Wilcox Companies ("BWC").

Through BWC, all of McDermott's nuclear and fossil power products and service offerings will be positioned to best fulfill the changing requirements of the Company's power customers, both commercial and governmental. "Leveraging our power offerings, talented employee base and industry expertise from both organizations will benefit our customers, work force, and shareholders," said Bruce W. Wilkinson, Chairman and Chief Executive Officer of McDermott.

The Babcock & Wilcox Companies will be under the direct leadership of John A. Fees, who has been named Chief Executive Officer of BWC. Fees, age 49, will continue to report to Bruce Wilkinson in this new role. John Fees is a 27-year McDermott veteran who most recently served as President and Chief Operating Officer of BWXT, a position held since January 2003. During a career of increasing responsibility, John Fees also previously served as President of both BWXT Services, Inc. and the Diamond Power Division, a wholly-owned subsidiary of B&W. David L. Keller will continue to lead McDermott's power generation activities and beginning on January 1, 2007 will report to Fees. BWC will appoint leadership positions within the new organization as it approaches the effective date.

"This new organization is an important milestone to achieve the maximum potential from our power industry offerings," added Wilkinson. "Having worked in leadership roles in both organizations, John Fees is the right leader for this assignment. As President and Chief Operating Officer of BWXT, John has demonstrated his ability to grow revenues, improve operating income and achieve operating efficiencies."

"I am honored to be selected to lead The Babcock & Wilcox Companies," said Fees. "Reuniting BWXT and B&W into a single organization will prove beneficial to our existing customers by offering a strengthened product portfolio and will provide enhanced opportunities to our many talented employees. In addition, I expect that synergies and cost savings can be realized as the organization combines, similar to our experience with the recently completed combination that created the Nuclear Operations Division at BWXT."

McDermott International, Inc. is a leading worldwide energy services company. The Company's subsidiaries provide engineering, construction, installation, procurement, research, manufacturing, environmental systems, project management and facility management services to a variety of customers in the power and energy industries, including the U.S. Department of Energy.

In accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, McDermott cautions that statements in this presentation that are forward-looking and provide other than historical information involve risks and uncertainties that may impact McDermott's actual results of operations. The forward-looking statements in this presentation include statements regarding the timing and benefits of consolidating B&W and BWXT, including expected synergies and cost savings resulting from the consolidation, the position of BWC to fulfill customer requirements, the benefit of the consolidation to our customers, work force and shareholders and the strength of BWC's product portfolio. Those statements are made based on various underlying assumptions and are subject to numerous uncertainties and risks, including, without limitations, the risk that the businesses of B&W and BWXT will not be integrated successfully or as quickly as expected; the risk that the cost savings and other synergies from the consolidation may not be fully realized or may take longer to realize than expected; disruption from the consolidation making it difficult to maintain relationships with customers, employees or suppliers; and such other factors detailed under the "Cautionary Statement Concerning Forward-Looking Statements" and "Risk Factors" headings in Items 1 and 1A of Part I to McDermott's Form 10-K for the year ended December 31, 2005 filed with the Securities and Exchange Commission.