Smedvig to Acquire Remaining Stake in West Alpha

Smedvig is in the process of acquiring KS Difko XLIV's 50 percent ownership interest in the fourth generation semi submersible drilling rig West Alpha, increasing Smedvig's ownership share to 100 percent. The purchase price is US$ 75 million combined with an additional payment dependent of the price development of Smedvig's Class A share in the period until December 31, 2005. The share price range that forms the basis for the additional payment is between NOK 90 and NOK 140. The additional payment is calculated prorate from a principal amount of US$ 5 million. The agreement is effective from July 1, 2005 and is subject to board approval and the KS Difko XLIV Annual General Meeting approval. The purchase will be fully financed through bank debt.

West Alpha is owned 50/50 by Smedvig and KS Difko XLIV, respectively. Smedvig owns eight percent of KS Difko XLVI. West Alpha is operating for Statoil on the Kristin field on the Norwegian continental shelf and has a firm contract until February 2005.

Kjell E Jacobsen, CEO in Smedvig asa, says: "West Alpha is a technically advanced drilling rig which has undertaken extensive upgrading during the last years. The rig is especially well suited for complex completion of production wells. This acquisition is in line with the company's strategy focusing on quality drilling units."

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