Statoil Terminates Contract For West Epsilon

Statoil has notified Smedvig that they exercise their right of early termination of the contract for the jackup, West Epsilon. The termination will take effect in November 2001.

The West Epsilon is currently sublet to TotalFinaElf for plug and abandonment operations on the Frøy field in the Norwegian sector of the North Sea. The early termination fee payable under the contract amounts to a total of approximately US $5 million for the terminated contract period. The fee will be taken to income in the fourth quarter. The West Epsilon was originally contracted to Statoil through the end of 2002.