Awilco Offshore Purchases 38% in Offshore Rig Services ASA

Awilco Offshore ASA has entered into agreements to acquire 18,976,806 shares in Offshore Rig Services ASA in transactions where the sellers will receive 11,747,547 new shares in AWO as settlement. The transactions are based on a pricing of the OFRS shares at NOK 26 and a pricing of the AWO shares at NOK 42. The transactions will make AWO the largest shareholder in OFRS with an ownership of 37.8 %.

OFRS is a Norwegian company which has under construction a semisubmersible drilling rig at the Yantai Raffles Shipyard in China. The rig is purpose designed as a cost efficient unit for the requirements of the North Sea, incorporates the latest in drilling technology as well as DP3 systems, and is due for delivery in the first quarter of 2008. The company holds options to construct an additional three similar drilling rigs. The shares of OFRS have been traded in the Norwegian OTC market since September 2005, when the company raised approximately US $140 million in equity towards the construction of its first drilling rig. The company is run by a highly experienced and competent management team.

AWO has a long-term view on its investment in OFRS and will seek to contribute to the company's growth and development. AWO believes that the market for semisubmersible drilling rigs offers significant opportunities and views the investment in OFRS as an opportunity to further develop AWO.

The new shares to be issued by AWO have been authorized by the shareholders' meeting and a board resolution to issue the shares was made on December 27, 2005. It is expected that the new shares will be issued shortly, and that the number of shares then in issue will be 130,277,880.

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