Disclosure Regarding Ownership in Eastern Drilling ASA

Representatives from SeaDrill Limited had a meeting with the Oslo Stock Exchange on Wednesday October 3, 2006 in connection with the Company's offer for the outstanding shares in Eastern Drilling ASA. In the meeting, they were made aware of the fact that Oslo Stock Exchange is considering if Seadrill, potentially, has breeched the disclosure requirements in connection with the acquisition of financial cash instruments related to the Eastern Drilling stock.

Seadrill acquired in the period April 6 to July 31, 2006, through eight transactions, equity total return swap related products linked to the development of Eastern Drilling share price. These transactions were organized as future contracts and were extended through rollovers. A complete list of the transactions is attached.

The transactions have all been unwinded and resulted in a financial loss of NOK 60.7 million. The purpose of these transactions was to increase Seadrill's financial exposure towards Eastern Drilling without changing or in any way influencing the control over or shareholder structure of the company.

The arrangements were based on standardized swap contracts and did not provide Seadrill with any rights to acquire Eastern Drilling shares or in any way influence any voting of Eastern Drilling shares. The contract was based on cash settlement of any positive or negative developments in the swap. The contract was organized through normal broker dealings and Seadrill had no contact with any counterparts or any knowledge if the exposure was fully, partly or not covered at all.

The contracts were executed by Seadrill director, Tor Olav Trĝim. Trĝim is not a board member in Eastern Drilling. Neither Trĝim nor SeaDrill Limited is defined as primary insiders in Eastern Drilling and has thereby no reporting obligation. Based on this position and what Trĝim had observed as common market practice for disclosure of cash settled equity swaps the transactions were not reported to the stock exchange.

Oslo Stock Exchange informed that they are evaluating this assessment. To avoid any doubt Seadrill has therefore decided to disclose a complete list of all these transactions.

On October 5, 2006, Seadrill received acceptances for a total of 963,409 shares equaling approximately 2.9 percent of the total number of outstanding shares and votes in Eastern Drilling. Including both the accepted shares and the already owned shares, Seadrill now controls 21,263,220 shares, which constitute approximately 63.3 percent of the outstanding shares and votes in Eastern Drilling. The acceptance period is open until 16:30 CET on October 16, 2006.


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