Dolphin and Norsk Hydro Resolve Dispute

Dolphin a.s., a wholly owned subsidiary of Fred. Olsen Energy ASA, has entered into an agreement with Norsk Hydro Produksjon a.s. on behalf of its partners in the Snorre field and licence 089 which resolves the dispute between the parties regarding responsibility for the cost overruns incurred in connection with the conversion of the Bideford Dolphin.

The agreement contains several elements, which includes a cash payment to Dolphin of about NOK225 million in relation to lapsed contract period, of which NOK 41 million relates to witheld dayrate payments. The dayrate increases by about 20% for the remaining period, which now expires May, 2005 .

Furthermore the agreement states that the contractual 4 times 2 year options at a limited dayrate and the 7th year of the original contract period are cancelled. Norsk Hydro has abandoned all counterclaims.

Negotiations with the previous owner of the rig, Bideford Marine, will continue now that an agreement with Norsk Hydro has been established. As this agreement includes elements of a varying nature it will now be assessed what impact these will have, also in relation to Bideford Marine.