SDRL, Ship Finance sign $210 million sale/leaseback

Offshore staff

HAMILTON, Bermuda -- Seadrill and Ship Finance International Ltd. have agreed to a sale and leaseback arrangement in which Seadrill sells the West Prospero (Seadrill 4) for a consideration of $210 million and simultaneously leases the unit for 15 years.

Seadrill retains several options to repurchase the unit during the charter period. The first repurchase option will be after three years at $142 million. The last repurchase option will be after 15 years at $60 million.

The aggregate lease payment for the first three years is about $120 million. For the subsequent four-year period, the aggregated lease payment totals $77 million. For the remaining eight-years of the lease period, the agreed aggregated lease payment is about $109 million.

After Jan. 1, 2009, Ship Finance will receive a 4% split of the adjusted operating profit if the operating profit has reached pre-determined levels.

1/12/2007