Yantai Raffles Extends Frigstad's Option Deadline

Yantai Raffles Shipyard has agreed with Frigstad Discoverer Invest Ltd to extend the April 5, 2007 deadline for executing the contract to build a second rig similar to the 'SS Frigstad Oslo', which is currently under construction at Yantai Raffles. Within this agreement, Frigstad may now declare the option anytime before June 5, 2007.

There is no added cost for Frigstad to extend this option. The added cost, if the option is declared, is 1% per month of the Yard cost.

Within the same agreement, Frigstad also has an option to build yet another rig at Yantai Raffles, whether or not the above option is declared. The due date for this option is October 5, 2007, or 6 months after the effective date for the 2nd rig option.

Frigstad Discoverer Invest is building the most powerful semisubmersible with a Dual Ram Rig, and a water depth capability of 12,000 feet. The company holds options for two sister rigs at the same yard. The estimated all inclusive cost for rig number one, which will be delivered in September 2009, is US $600 million.

Frigstad Discoverer Invest completed a private placement of US $240 million in March 2006, with US $215 million in equity and US $25 million in a convertible bond. Most of the debt financing required to finance the construction of the first rig was secured in February 2007 through issuance of a second lien bond loan amounting to US $200 million. The company has approximately 165 shareholders, and its shares are traded on the Oslo Stock Exchange as of April 10, 2007 under the ticker code FRID.

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