Prospector Offshore Enters Into Sales Agreement with Seadrill

Prospector Offshore Drilling S.A. announced today that its relevant group subsidiaries have entered into an 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. the builder of the jack-up drilling rig with Hull No. JU2000E- 11.

The total sales consideration is approximately USD 55.2 million in cash. As part of the Rig 3 Company Sales Agreement, the Purchaser will deposit USD 6.0 million in an escrow account no later than 19 November 2013, and closing is scheduled for 28 November 2013. At closing the USD 6.0 million will be released from escrow and the final payment of USD 49.2 million will be made, of which USD 10.0 million will be held in an escrow account and released upon delivery of Rig 3 by DSIC-Offshore. The closing of the sale and purchase of the shares will be subject to obtaining the approval of DSIC-Offshore.

Assuming the closing of the transaction occurs, the Company anticipates that its net proceeds from the sales transaction will be approximately USD 52 million.

The Company also anticipates that it will recognize a gain of approximately USD 28 million at closing, 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 related to the Rig 3 Company Sales Agreement.

 Robert W. Rose, the Company President and CEO, commented today: “The agreement for the sale of shares in Prospector Rig 3 Owning Company S.à r.l. is an important step for the Company. Proceeds from the sale, will substantially strengthen the Company’s balance sheet as we prepare to take delivery of the remaining rigs.”

Prospector Offshore Drilling, November 15, 2013