Prospector Offshore Completes Sale of Jack-Up Rig to Seadrill

Prospector Offshore Drilling S.A. has completed the previously announced sale of an under-construction jack-up rig.

Reference is made to the Company’s announcement on 15 November 2013, regarding the agreement with Seadrill Jack-up Holding Ltd., a subsidiary of Seadrill Limited, for the sale and purchase of 100% of the shares and certain intercompany obligations of Prospector Rig 3 Owning Company S.à r.l., the subsidiary that is party to a rig construction contract with Dalian Shipbuilding Industry Offshore Co., Ltd. (“DSIC-Offshore”) the builder of the jack-up drilling rig with Hull No. JU2000E-11 (the “Rig 3 Transaction”).

The Rig 3 Transaction has now been completed in accordance with the provisions of the respective sale and purchase agreement. The Company’s aggregate net proceeds from the Rig 3 Transaction
are approximately USD 52 million and the Company will recognize an aggregate net gain of approximately USD 28 million based on the first instalment of USD 19.9 million for the shipyard contract with DSIC-Offshore, project management costs, broker commissions, taxes and professional fees.

Seadrill will pay a total purchase price of US$235 million for the rig.

The Prospector 3 is scheduled to be delivered from Dalian Shipbuilding Industry Offshore Co., Ltd. (DSIC Offshore) in China during the first quarter of 2014. The new unit is based on the F&G JU2000E design, with water depth capacity of 400ft and drilling depth of 35,000ft.
The lack of premium jack-up newbuild activity over the last decade is beginning to be felt and demand is currently exceeding available supply. The tightness in the market is leading many customers to contract these units for significantly longer terms than previously experienced for this asset class.

[mappress]
November 28, 2013