Seadrill Reports 2Q06 Results

Highlights

Seadrill reports a net income of US $33.3 million and earnings per share of US $0.07 for the second quarter 2006

Seadrill completed a US $210 million sale and leaseback transaction for the newbuild jack-up West Ceres (Seadrill 3)

Seadrill orders a new tender barge rig, T11, from Malaysia Marine & Heavy Engineering

Seadrill maintains ownership position in Eastern Drilling ASA by acquiring 5.3 million shares in share emission at NOK 90 per share

Seadrill secured new contracts for the jack-up rigs West Epsilon and West Larissa as well as the tender rig under construction West Berani

Second quarter results

Seadrill reported consolidated revenues for the second quarter 2006 of US $275.6 million compared to US $233.8 million for the pro forma first quarter 2006. Revenues for the first half year were US $467.2 million.

Operating profit for the second quarter was US $59.1 million as compared to pro forma figures of US $27.5 million in the first quarter. Operating profit for the first half year was US $82.9 million.

Operating profit from the Mobile units (including jack-ups and FPSOs) amounted to US $35.8 million as compared to an operating profit of US $10.2 million in the pro forma first quarter accounts. The increase was mainly due to higher utilization for West Ceres (Seadrill 3), West Titania (Seadrill 7), West Navigator as well as higher dayrates for West Alpha.

Operating profit from the Tender rigs amounted to US $13.9 million as compared to US $11.8 million in the pro forma first quarter accounts. The improvement was mainly due increased dayrates for some of the units.

Operating profit from Well services amounted to US $9.4 million as compared to US $5.4 million in the pro forma first quarter accounts. The improvement reflects increased activity within the Well services division.

Net financial items for the second quarter incurred a loss of US $17.7 million as compared to an income of US $63.2 million in the pro forma first quarter. The result reflects decreased interest expenses due to capitalization of interest expenses related to the newbuilding program. In addition, the first quarter results was impacted by the gain from the sale of the holdings in Ocean Rig ASA.

Income before income taxes amounted to US $41.4 million.

Income taxes were US $8.1 million. Net income for the quarter amounted to US $33.3 million. Earnings per share were US $0.07 for the second quarter.

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