Seadrill Withdrawing Offer for Eastern Shares

Seadrill has, as a consequence of the Oslo Stock Exchange's decision to withdraw its approval of Seadrill's mandatory offer for Eastern Drilling ASA, decided to use its right to reduce its shareholding in Eastern to less than 40 percent. The mandatory offer for the Eastern shares of NOK 92.00 per share is thereby withdrawn.

The reduction in ownership will take place over the period from today's date until such date as may be the last date on which such a reduction can be made pursuant to the Norwegian Securities Trading Act. The disposal of shares will be executed in the open market on market terms.

Seadrill has furthermore decided to appeal the decision of the Board of Directors of the Oslo Stock Exchange to the Stock Exchange's Appeals Committee. Seadrill strongly disagrees with the Stock Exchange`s conclusion that Seadrill and Carnegie acted in concert when Carnegie acquired shares in Eastern in early April this year.

Seadrill has noted that this conclusion is primarily based on assumptions rather than facts. Seadrill and Carnegie will again emphasize that there did not exist any understanding or agreement between them and there are no facts whatsoever supporting the Stock Exchange's assumptions. Seadrill had at no point prior to September 7, 2006 a position of shares or any financial instruments which gave directly or indirectly a right, an option or a future right to control more than 40 percent of the outstanding shares in Eastern. This remains the fact and shall never be confused.

Should the Appeals Committee agree with Seadrill's view regarding the legality of its mandatory offer for Eastern of September 18, 2006, a re-launch of the withdrawn offer will be presented to provide all shareholders with the opportunity to accept the offer. Nevertheless, should the Appeals Committee conclude in line with the Stock Exchange's decision, Seadrill will ensure that its ownership in Eastern is less than 40 percent at the expiry of such period as the Norwegian Security Trading Act allows following the Appeals Committee's decision. Seadrill will then maintain its position as Eastern's main shareholder as well as commercial manager of Eastern's two semisubmersible drilling units. Seadrill is mindful of its obligations as commercial manager and will continue to work diligently in order to position the Eastern units best possible for future employment.


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