Seadrill Limited: Statement Regarding Eastern Drilling ASA


HAMILTON, Bermuda, Jan. 10, 2007 (PRIME NEWSWIRE) -- On December 12, 2006 the Oslo Stock Exchange Appeals Committee ("SEAC") decided to consolidate the combined shareholdings of Seadrill and Carnegie in Eastern Drilling ASA ("Eastern") as at April 6, 2006 and impose a duty on Seadrill to make a new mandatory bid for all of the outstanding shares in Eastern following a prior offer in September 2006, ref. SEAC's press release of December 13, 2006, and subsequent stock exchange notifications made by Seadrill Limited ("Seadrill") on December 13 and 20, 2006, respectively.

SEAC's decision indicated, but did not specify, the price at which a mandatory offer would have to be made. Seadrill is of the opinion that the decision taken by SEAC is legally wrong and that the mandatory bidding requirement was met through the NOK 92 offer launched in September 2006. However, in order to reduce the burden for Eastern's shareholders, Seadrill indicated a willingness to launch a renewed offer. Seadrill is of the opinion that such offer price would have to take into account and reflect the dilutive effect of the share capital increase of Eastern in June 2006. Subject as aforesaid, Seadrill confirmed its intention to present such an offer accordingly at a price of NOK 117.14.

Recent discussion between Seadrill and the Oslo Stock Exchange ("OSE") has made it clear that a mandatory bid at the price Seadrill is prepared to offer will not be approved by OSE. Accordingly, Seadrill's condition as stated in order for a mandatory bid to be made has not been met, and no new offer will be presented.

Seadrill has decided to bring the consolidation matter before the ordinary courts, with a request to nullify the mandatory offer obligation as imposed by SEAC. Seadrill has instructed its legal advisors to file a lawsuit accordingly. Seadrill has filed a request with the OSE to stay further actions and sanctions until the court has rendered a final decision in the matter.

Tor Olav Troeim of Seadrill says: "We disagree with the legal and factual basis for SEAC's decision, which represents a new assessment of the use and effects of Total Return Swap (TRS) compared to previous OSE practice and jurisprudence. The decision is particularly onerous on Seadrill, as it passes on the risk to Seadrill of trades made in the past in Eastern shares by Carnegie which were unknown to Seadrill both in terms of numbers and price, and which were made at prices significantly above any price ever paid or contemplated by Seadrill.

"The decision taken by SEAC is also forcing Seadrill to pay a minimum NOK 45 per share or NOK 600 million premium in the aggregate for the cash the company raised in the June offering. This happened after the time where SEAC is of the opinion that the bidding obligation became effective. That Seadrill was also deprived of the possibility to reduce its stake below the mandatory offer obligation threshold makes the result particularly unreasonable. The fact in this case remains that Seadrill never owned or controlled directly or indirectly more than 40percent of the shares in Eastern prior to September 7, 2006, and that the highest price Seadrill has ever paid for shares in Eastern are NOK 92.00. Based upon those facts, the basis for and the consequences of SEAC's decision are such that it needs to be tried before the courts".


 Seadrill Limited
 Hamilton, Bermuda
 January 10, 2007