Smedvig and BP Reach Dayrate Agreement for West Epsilon

Smedvig and BP Norge AS has reached an agreement with regard to the dayrate for the ultra large jack-up drilling rig West Epsilon on the Valhall Flank in the North Sea. The dayrate is applicable for a drilling program of a total of eight wells, two firm wells and options for six additional wells. Estimated duration for the eight wells drilling program is approximately one year. Duration for the two fixed wells is estimated to approximately 70 days. The two companies have agreed on an incentive based dayrate which suggests that the contract value for the two fixed wells will be between US$ 9.5 million and US$ 11.2 million. Based on West Epsilon's previous drilling performance, the expected contract value is estimated to US$ 10.3 million. The agreement is subject to partner approval.