LOI for West E-drill Cancelled

Smedvig Offshore AS has on behalf of Eastern Drilling ASA negotiated with an oil company for employment of West E-drill. A Letter of Intent was agreed in February for 3 years employment of the rig. The oil company has today informed that they have not succeeded in arranging a drilling program for the 3 years, and that the Letter of Intent will not be a firm contract. Eastern Drilling ASA has under the Letter of Intent received a non refundable amount of US $10 million.

Marketing of West E-drill is ongoing in an exciting market for semi submersible drilling rigs. The rig is expected to be delivered from the yard end fourth quarter of 2007.

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