NEW ORLEANS, LOUISIANA -- Avondale Industries, Inc. (NASDAQ/NMS-AVDL) announced today that it signed a $332 million contract with ARCO Marine, Inc. of Long Beach, California for the construction of two 125,000 DWT Jones Act crude carriers. The contract also provides options for three additional ships. Detail design of the ships is to begin immediately with construction scheduled to start in December of 1997. At peak manning the program will employ approximately 2,200 Avondale employees. Mr. Albert L. Bossier, Jr. Chairman and Chief Executive Officer said, "This is a significant event in our strategic plan for increasing our commercial competitiveness and obtaining a more desirable balance of our work between commercial and military contracts. We are pleased to be working in this partnership with ARCO Marine who has demonstrated leadership in the petroleum transportation industry." Delivery of the first ship is scheduled for the first quarter of 2000. Arco expects to release design details and specifications on July 29, 1997. Avondale Industries, Inc., headquartered in metro New Orleans, designs, builds and overhauls both military and commercial ships.