Third Quarter Highlights

Mark R. Draper appointed chief executive officer

George W. Taylor appointed executive chairman

Seymour S. Preston III appointed vice chairman and lead independent director

Philip Hart appointed chief technology officer

Contract order backlog of $6.9 million on January 31, 2009 (April 30, 2008: $5.5 million)

Cash, cash equivalents and investments of $85.6 million at January 31, 2009 (October 31, 2008: $89.6 million)

Signed agreement with Leighton Contractors to develop wave power projects off the east and south coasts of Australia

Announced collaboration with Lockheed Martin for the development of utility scale wave power generation projects in North America

In February 2009, shipped PB150 electrical power and control system from Ocean Power’s New Jersey factory to the UK, for integration with the PB150 PowerBuoy to be deployed in the Orkney Islands under contract with the Scottish Government

Revenues for the nine months ended January 31, 2009 were $3.4 million, compared to $3.7 million for the nine months ended January 31, 2008

Net loss for the nine months ended January 31, 2009 was $13.6 million, compared to a $8.3 million net loss for the nine months ended January 31, 2008

Mark R. Draper, Ocean Power’s chief executive officer, said “I am very excited about serving as Chief Executive Officer of Ocean Power and the responsibility for moving the Company forward, as we build on our successes to date. I would like to thank Dr. George Taylor for his leadership and look forward to his continued strategic guidance and business development expertise in the role of Executive Chairman. I am also pleased to have Dr. Phil Hart join Ocean Power as our new Chief Technology Officer. These personnel changes reflect the Company’s momentum in establishing itself as a premier global technology company in the wave power industry.”

“Financial results for the third quarter of fiscal 2009 were in line with our expectations, and cash used in operations decreased from the second quarter of this fiscal year. We remain committed to executing against our plan, as we continue to make important strides with many of our projects while furthering our network of global partners. In December 2008, Ocean Power announced an agreement with Leighton Contractors for the development of wave power projects off the east and south coasts of Australia – underscoring our global expansion plans. In January, we signed a letter of intent with Lockheed Martin to collaborate on the development of utility scale wave power generation projects in North America” Draper continued.

“We are pleased to report that the electrical power and control system for the PB150 to be delivered under a contract with the Scottish Government was recently shipped from our New Jersey factory to the UK. Under the leadership of Dr. Hart, we are looking forward to the achievement of further key milestones in the development of our core PowerBuoy technology” Draper concluded.

Overview

Ocean Power achieved important milestones in the development of the 150 kW-rated PowerBuoy (PB150), which comprises a significant portion of its current backlog. The initial structural design for the PB150 was completed by December 31, 2008 and Ocean Power continues to work actively with an independent engineering group to certify the 150 kW PowerBuoy structure design. The first round of such certification reviews has been completed. The electrical control system, which is the core of the PB150 structure, was recently shipped to the UK from Ocean Power’s Pennington, New Jersey headquarters.

Under a letter of intent signed in January 2009 with Lockheed Martin for the development of a wave power plant, Ocean Power will contribute its project and site development expertise, build the power take-off and control systems of the wave power generation plant, and provide its proprietary PowerBuoy technology. Lockheed Martin will provide construction, systems integration and deployment of the plant, as well as operations and maintenance services. This is the first agreement between the two companies for a utility-scale wave power project, and it builds on previous work that the companies did together on systems for US Homeland Security and maritime surveillance.

Ocean Power’s patent portfolio continues to grow as one new US patent was issued during the third quarter of fiscal year 2009. The company’s technology base now includes a total of 40 issued US patents.

Operational Review

The third quarter of fiscal year 2009 reflected continued progress on numerous Ocean Power projects, with key strides made on a number of projects including:

Reedsport, Oregon, US – Ocean Power is working on a 150 kW-rated PB150 PowerBuoy, major portions of which will be fabricated and integrated in Oregon. Ocean Power continues to make progress on the overall permitting and licensing process while working extensively with interested stakeholder groups at local, county, state and federal agency levels.

Spain – Ocean Power is continuing to work on what is expected to be a utility-grade Ocean Power wave power station in Spain with Iberdrola S.A., one of the world’s largest renewable energy companies, and its partners. Following deployment and ocean testing of the first PowerBuoy in September 2008, Ocean Power has been working on improvements to the power take-off and control systems.

Orkney Islands, UK – Ocean Power is working under a contract with the Scottish Government at the European Marine Energy Centre in the Orkney Islands, Scotland to deploy a gridconnected 150 kW PowerBuoy. Ocean Power has made good progress on the construction of the power conversion and power take-off sub-assemblies. In the third quarter, the company continued its review of prospective suppliers for manufacturing of the PowerBuoy, which is on track to be ready for deployment by the end of calendar year 2009.

Cornwall, UK – Ocean Power is working closely with the recently appointed engineering contractor, appointed by the South West of England Regional Development Agency (“SWRDA”) to manage the construction of the “Wave Hub” marine energy test site. SWRDA has forecast that the cabling and subsea equipment construction is expected to be installed by the end of calendar year 2010.

Hawaii, US – In October 2008, the company deployed one of its PowerBuoy systems near Kaneohe Bay on the island of Oahu. The PowerBuoy was launched under Ocean Power’s on-going program with the US Navy at a site off Marine Corps Base Hawaii and will be connected to the Oahu power grid. Initial commissioning tests were very encouraging and the power produced was in line with predicted levels.

US Navy Deep Ocean Application – Ocean Power commenced work on a $3.0 million contract award for the ocean testing of an advanced version of the autonomous PowerBuoy. This is part of the second phase of the Navy’s DWADS initiative program, a unique program for deep ocean data gathering.

Financial Review

Third Quarter

Revenues decreased by $0.4 million in the three months ended January 31, 2009 to $1.0 million as compared to $1.4 million in the three months ended January 31, 2008. The decrease in revenues was primarily attributable to lower levels of revenues on the company’s wave power station off the coast of Spain and autonomous PowerBuoy work, net of an increase in revenues related to the Hawaii project for the US Navy.

Cost of revenues decreased to $0.6 million in the three months ended January 31, 2009 from $2.0 million in the three months ended January 31, 2008. This decrease in cost of revenues primarily reflected the decreased level of activity on the wave power station off the coast of Spain and the autonomous PowerBuoy projects for the US Navy.