Seadrill, Ship Finance Int'l Ltd. execute rig transaction

Offshore Staff

(Bermuda) - Seadrill and Ship Finance International Ltd have executed a transaction under which Seadrill will sell the jackupSeadrill 3 to Ship Finance for $210 million and then lease it back for a 15-year period.

Under the agreement, Seadrill has a right to repurchase the rig after three years or at the end of the charter. The exercise price after three years is $135.5 million and $60 million at the end of the 15-year charter.

The annual lease payment for the first three years will total $41.1 million. For the subsequent four-year period, the annual lease payment will be $18.8 million, and for the remaining eight-year charter period, the agreed annual lease payment is approximately $14.9 million.

07/03/06